Annual reports of departments
1.1
The annual reports of the following departments for the financial year
2015–16, were referred to the committee for examination and report:
-
Attorney-General's Department; and
-
Department of Immigration and Border Protection.
Attorney-General's Department
Tabling of report
1.2
The 2015–16 annual report was tabled in the Senate on 11 October 2016.
The report was available to senators for the Supplementary Budget Estimates 2016–17
hearings on 17 and 18 October 2016, and 12 December 2016.
Secretary's review
1.3
In his review for 2015–16, the secretary of the department, Mr Chris
Moraitis PSM, focused on program and policy delivery in the areas of law and
justice, national security, and emergency management.[1]
1.4
Other key areas of work for the reporting period included: the
consolidation of the Australian Government Solicitor (AGS) into the department;
improving the efficiency of the judicial system; supporting the Defence Abuse
Response Taskforce and Royal Commissions; the implementation of data retention
obligations; a data-breach notification scheme; the National Facial Biometric
Matching Capability; a national domestic violence order scheme; supporting the
National Ice Taskforce; and reforming national disaster relief and recovery
arrangements.[2]
1.5
The review also reported that in its first stakeholder survey, the
department 'performed well on all measures, including overall performance,
staff expertise and effectiveness, relationships and leadership and delivering
quality results'.[3]
1.6
The secretary's outlook for 2016–17 outlined a continued role in
'achieving a just and secure society for all Australians'[4]
through policy delivery, an effective justice system, national responses to
crime and emergency management, and the rights, freedoms and responsibilities
of a free society.[5]
Changes to the portfolio structure
1.7
A number of changes were made to the structure of agencies within the
portfolio during, and immediately following, the reporting period.
1.8
On 1 July 2015, the Migration Review Tribunal and Refugee Review
Tribunal, and the Social Security Appeals Tribunal were amalgamated into the
Administrative Appeals Tribunal, and the AGS was consolidated into the Attorney-General's Department.[6]
1.9
On 1 July 2016, the Australian Crime Commission and CrimTrac merged to
form the Australian Criminal Intelligence Commission, and the Federal Court of
Australia, Family Court of Australia, and the Federal Circuit Court of
Australia merged to form a single administrative entity.[7]
1.10
Additionally, in September 2015 the Ministry for the Arts moved from the
Attorney-General's Department to the Department of Communications and the Arts
under a machinery-of-government change.[8]
Performance reporting
1.11
The Attorney-General's Department made significant changes to its
performance measures and key performance indicators (KPIs) in the 2015–16
reporting period.
1.12
The series of KPIs outlined in the Portfolio Budget Statement (PBS) for
2015–16[9]
under each strategic priority are not reflected in the Corporate Plan[10]
published in August of the same year, and no explanation for the discrepancy is
provided in that document. Furthermore, there was no mention of a change to
KPIs in the Portfolio Additional Estimates Statements (PAES) 2015–16 in
February 2016, although changes to deliverables are outlined following the
transfer of the Arts outcome to the Department of Communications.[11]
1.13
The committee identified that the only clear information about the
change to KPIs for the department was given in the PBS for 2016–17 in May 2016,
where the following explanation was provided, along with tables comparing old
and new KPIs in 2015–16 and KPIs for 2016–17:
In 2015–16, the department implemented a new performance
framework in line with the requirements of the Public Governance, Performance
and Accountability Act 2013, detailed in the department’s Corporate Plan
2015–16. The performance criteria from that framework will be adopted as the
performance criteria for programs from 2016–17.
In its 2015–16 annual report, the department will report
against both the key performance indicators in the 2015–16 Portfolio Budget
Statements and the performance framework in the corporate plan. The results
against the performance framework will be reported in the department’s annual
performance statement and will be used as baseline results against which future
targets will be set.[12]
1.14
The KPIs presented and analysed in the department's annual report for
2015–16 therefore reflect the new KPIs detailed in the Corporate Plan and the PBS
for 2016–17.
1.15
The department has introduced a new structure for performance reporting,
applying four high-level KPIs (Community impact; Effectiveness in achieving
objectives; Efficiency in meeting goals; Professionalism, skills and
commitment) to each of the seven strategic priorities across the department.[13]
Further detail on these strategic priorities and KPIs is provided in the
Corporate Plan.[14]
1.16
While the committee is pleased to see that the department has improved
the specificity of its KPIs, it continues to hold concerns about the lack of
quantitative measures to assess the effectiveness of the department. The
committee wishes to reiterate the best practice for the development of KPIs as
outlined in the Australian National Audit Office's (ANAO) Development and
Implementation of Key Performance Indicators to Support the Outcomes and
Programs Framework:
The tendency for entities to rely on qualitative KPIs reduces
their ability to measure the results of program activities over time. A mix of
effectiveness KPIs, that place greater emphasis on quantitative KPIs and
targets, would provide a more measureable basis for performance assessment.
Targets, in particular, should be used more often to express quantifiable
performance levels to be attained at a future date. By enabling a more direct
assessment of performance, the greater use of targets would assist to clarify
and simplify the process of performance monitoring.[15]
1.17
However, the committee recognises the difficulty in using quantitative
KPI targets to assess the effectiveness of departmental programs that involve
policy development and commends the department for its introduction of
stakeholder surveys to assess performance against targets of this nature.
1.18
The committee also notes that the PBS for 2016–17 set the target for all
KPIs as 'to equal or better 2015–16 results' and hopes that this target will
encourage quantitative comparison of performance information in future reports,
where applicable.
1.19
The department met its KPIs for 2015–16, however two KPIs were not
reported on in detail due to lack of a comprehensive measure (Strategic
Priority 2, KPI 1: Community impact – community satisfaction with and awareness
of national security strategies)[16]
and a lack of data for the reporting year (Strategic Priority 6, KPI 1:
Community impact – death and total asset loss from emergency events excluding
road crashes).[17]
1.20
A large amount of performance information for reporting period was
informed by the stakeholder survey.[18]
Stakeholders surveyed included other federal agencies, state and territory
agencies, professional and representative bodies, and community organisations.[19]
A high level of satisfaction was reported across all strategic priorities, with
results of 86 to 97 per cent satisfaction with Effectiveness in achieving
objectives and 86 to 98 per cent satisfaction with Professionalism, skills and
commitment.
Financial performance
1.21
In a departure from previous annual reports, the secretary's review did
not include a summary of financial results. There was also no substantive discussion
of financial results in the body of the report, and only minimal explanatory
notes in the financial statements at Part 4.[20]
1.22
The PGPA Rule requires that 'a discussion and analysis of the entity's
financial performance' be included in annual reports.[21]
The committee provides further commentary on this at paragraph 1.30 below.
1.23
The department reported a departmental operating deficit of $14.275
million for 2015–16. This deficit compares to an operating deficit of $14.593
million in 2014–15, and is an $8.496 million improvement from the deficit of
$21.118 million anticipated in the PAES. The 2015–16 result partly reflects the
department’s depreciation and amortisation expense of $27.248 million, which is
not funded by the Government.
1.24
The committee notes that administered expenses for 2015–16 were $854.651
million, compared to $1,275.811 million in 2014–15. Payments to Commonwealth
corporate entities were $265.673 million, compared with $471.068 million in 2014–15.
The reduction in both amounts mostly reflects the transfer of the
Classification, Copyright and Arts and Cultural Development programs and
functions to the Department of Communications and the Arts from 1 November
2015.
1.25
The two Royal Commissions that operated during 2015–16 incurred expenses
that required funding of $89.292 million, which was less than the budgeted
funding requirement of $90.771 million.
Management of human resources
1.26
Changes to reporting requirements under the PGPA Act and PGPA Rule now
require more detailed statistics on an entity's employees, including
classification level, full-time/part-time status, gender, location, and number
who identify as Indigenous. The committee notes that the department failed to
include information about the location of staff, which is mandated in section 17AG(4)(a)
of the PGPA Rule.
New reporting guidelines and list
of requirements
1.27
The committee notes that while the Attorney-General's Department has
largely followed the new reporting requirements under the PGPA Act, the
department's 'list of requirements' is of concern.
1.28 Section 17AJ(d) of the PGPA Rule requires that a list of
requirements, as set out in Appendix F of the Rule, is included in entities’
annual reports as an 'aid of access' to enable readers to locate specific
information in a straightforward manner. Section 17AJ(d) also requires other
aids of access, including table of contents, index, glossary of abbreviations
and acronyms, and website and contact details for the agency, in all reports.
1.29
There appear to be major discrepancies between the PGPA Rule references
provided in the department's list[22]
and the list of requirements included in all compilations of the Rule since 13
May 2016.[23]
The committee is unable to identify which, if any, compilation of the PGPA Rule
the department is referencing in its list. Additionally, the description text
has been substantially changed for a number of requirements.
1.30
For example, the committee notes that the department's list changed the
requirement 'a discussion and analysis of the entity's financial performance'
to the simplified 'entity's financial performance'. The committee is
particularly concerned about this change to the description, which obscures the
requirement for discussion and analysis, and disguises the department's
omission of any such discussion or analysis from its report.
1.31
The committee strongly recommends that in future reports the department
use the list of requirements provided in the PGPA Rule without making
amendments to references or descriptions.
Conclusion
1.32
The committee would like to draw attention to its comments on following
reporting guidelines and encourages closer compliance in future annual reports.
1.33
Despite the omissions noted above, the committee considers the report to
be 'apparently satisfactory'.
Department of Immigration and Border Protection
Tabling of report
1.34
The 2015–16 annual report was tabled in the Senate on 10 October 2016.
The report was available to senators for the Supplementary Budget Estimates 2016–17
hearing on 17 October 2016.
Corrigendum
1.35
At the Supplementary Budget Estimates 2016–17 hearing on 17 October
2016, Senator the Hon Kim Carr asked questions about discrepancies between the
report on financial performance in the text of the annual report and the
financial statements.[24]
Mr Steven Groves, Acting Deputy Secretary, Corporate, and Chief Operating
Officer, explained that the tables in the financial resources summary did not
include depreciation and that a corrigendum was in the process of being
prepared.[25]
He also clarified that there were no errors in the financial statements.[26]
1.36
A corrigendum to the report on financial performance was published
online by the department on 17 October 2016.[27]
1.37
As there were no errors in the financial statements, the department has
not tabled the corrigendum in either the House of Representatives or the Senate.
Secretary's review and
Commissioner's review
1.38
This is the first annual report for the new Department of Immigration
and Border Protection, following amalgamation between the department and
Australian Customs and Border Protection Service and the formation of the
Australian Border Force (ABF) within the department on 1 July 2015.
1.39
Both the Secretary of the Department of Immigration and Border
Protection, Mr Michael Pezzullo, and the Commissioner of the Australian Border
Force, Mr Roman Quaedvlieg APM, provided reviews for the annual report.
1.40
Mr Pezzullo's review focused on the continued mission and purpose of the
department to 'protect Australia's border and manage the movement of people and
goods across it' and on the changes to the department since 1 July 2015. Key
areas highlighted included: the administrative relationship between the
Secretary (administration and policy) and the Commissioner (operational
activities); training and development for the new integrated staff; new
corporate, policy and operational strategy documents; enhanced collaboration
with domestic, regional and global partners; the establishment of the Border
Intelligence Fusion Centre to support real-time operational decision-making;
updates on visa programs; and financial performance.[28]
1.41
Mr Quaedvlieg's review covered the formation of the ABF and its role as
Australia's customs service. Points of discussion included: training for ABF
uniformed and non-uniformed officers; the role of ABF in whole-of-government
law enforcement; operational successes in areas of organised crime, illicit
drugs and counter-terrorism, including visa cancellations on character grounds;
immigration compliance and enforcement, including targeting organised visa
fraud, illegal work and the exploitation of foreign workers in Australia;
maintaining the sovereignty of Australia's maritime border through Operation
Sovereign Borders; the implementation of the Australian Trusted Trader program;
the rollout of 'SmartGate' technology at international airports; and the
management of immigration detention facilities.[29]
Performance reporting
1.42
The annual report for 2015–16 provides comprehensive reporting on
performance in accordance with the requirements of the PGPA Act and PGPA Rule.
1.43
Performance reporting is displayed in a clear format and footnotes
throughout provide information about the source of each criterion, including
page references from the PBS and/or Corporate Plan, distinction between
deliverables and KPIs, and relevant outcome and/or program information.
1.44
Qualitative deliverables and KPIs are listed with a Result displayed as
Met/Not met as applicable, and with explanatory text evaluating the result.
1.45
Quantitative deliverables and KPIs are reported in tables with separate
columns for 2014–15 Actual [figure], 2015–16 Target [figure, for KPIs only], 2015–16
Actual [figure], and Result displayed as Met/Not met as applicable. There is
limited-to-no explanatory text evaluating individual quantitative criteria.
1.46
The committee congratulates the department on the overall high standard of
performance reporting in this annual report.
1.47
However, the committee notes that while the department met a substantial
proportion of its KPIs, a number were not met across the following functions:
- Function 1 (Facilitation and enforcement of trade and customs): air and
sea cargo inspections, examinations and reports;[30]
processing of customs broker licenses; tariff classification, valuation and
rules of origin advices; and international vessel movements and reported vessel
arrivals;[31]
-
Function 2 (Facilitation and enforcement of travel): management of goods
and services moving across borders in according with service standards; rate of
passenger and crew arrivals refused immigration clearance at airports and
seaports;[32]
timely resolution of immigration status breaches for non-citizens in the
community;[33]
timely processing of passengers in inwards queue at airports and seaports;[34]
and percentage of high-risk vessels subject to targeted operational responses;[35]
-
Function 3 (Delivery of visitor, temporary resident, migration and
citizenship programs): visa applications finalised within applicable service
standards; and citizenship conferral applications decided within service
standards; [36]
-
Function 5 (Offshore maritime security): aerial surveillance; station and steaming
days for the Ashmore vessel; patrol days for the Marine Unit; and apprehension
and processing of illegal foreign fisher and fishing vessels;[37]
and
-
Function 6 (Revenue collection): target revenue associated with
passenger movements; drawbacks delivered according to service standards; and
target duty concessions from schemes other than the tariff concessions system.[38]
1.48
The failure of the department to meet the criteria listed above was
raised at the Supplementary Budget Estimates hearing on 17 October 2016 by
Senator the Hon Kim Carr.[39]
The Senator then provided a written question on notice (QoN) detailing 10 of
the areas of failure and seeking further explanation from the department. An
answer was received by the committee on 2 December 2016, QoN SE16-107.[40]
1.49
In its response to Senator Carr, the department provided a comprehensive
attachment detailing the reasons for failure in each instance.[41]
The department acknowledged that 'its ability to meet specified targets may be
impacted by a range of environmental factors within, or outside of, its
control', and outlined where variances were in acceptable ranges, where failed
targets could cause negative impacts, and where exceeded targets in other areas
caused run-on effects.[42]
1.50
The committee considers that the information provided in the answer to
QoN SE16-107 would have provided meaningful detail to the performance reporting
in the annual report. The committee therefore recommends more detailed
explanation where the department fails to meet performance criteria,
particularly quantitative criteria, in future reports.
Financial performance
1.51
In considering the financial performance of the department, the
committee referred to both the annual report, and the corrigendum published
online and comments made at the Supplementary Budget Estimates hearing on 17
October 2016.
1.52
The total departmental expenses for 2015–16 were $2986.1 million, $139.3
million higher than in 2014–15. The department had budgeted $2868.3 million for
departmental expenses for the period.[43]
The total administered expenses in the same period were $2307.0 million, $236.7
million lower than in 2014–15, and the department had budgeted $2551.5 million.[44]
1.53
There was a reported $12.4 million increase in departmental assets since
30 June 2015, with total assets now equal to $1882.2 million at 30 June 2016. Total
administered assets were equal to $1965.6 million on 30 June 2016. The 2015–16
reporting period also saw a decrease in total liabilities: departmental
liabilities decreased by $10.1 million to $737.5 million, mainly due to a
decrease in salaries and wages payable; and administered liabilities decreased
by $34.0 million to $279.2 million. The department's net asset position at 30
June 2016 was therefore $1144.7 million, an increase of $22.5 million from 30
June 2015. [45]
1.54
The overall operating result for 2015–16 was a deficit of $21.7 million,
due to an increase in depreciation and amortisation expenses, attributed to
changes in government bond rates. The depreciation and amortisation expenses
for 2015–16 were $277.5 million, an increase from $109.9 million in 2014–15.
The department stated in both the annual report and in the estimates hearing
that, had it not been for this increased expense, the department would have
'finished the year on budget'.[46]
Correction of previous errors
1.55
Two errors made in the Australian Customs and Border Protective Service
(ACBPS) annual report for 2014–15 were corrected in the department's report for
2015–16.[47]
1.56
A correction adjusted the number of fishers apprehended and processed
from 25 to 34[48]
and did not change the result of the KPI for 2014–15 being unmet.[49]
1.57
However, there was a significant correction regarding the number of
undeclared handguns detected at the border. The ACBPS annual report for 2014–15
reported that the number had 'increased by almost 60 percent',[50]
however the actual result was a decrease of approximately 73 percent in 2014–15,
with 13 handguns detected in 2014–15 compared with 49 detected in 2013–14.[51]
The reason for this error was not stated.
Information required by other
legislation
1.58
The annual report also includes information required by other
legislation, including: compliance with the Work Health and Safety Act (Cth)
2011;[52]
compliance with the Environment Protection and Biodiversity Act 1999;[53]
and a brief report on the Office of the Migration Agents Registration Authority,
as required under the Migration Act 1958.[54]
1.59
The committee found that for the purpose of the annual report, the
department met the reporting requirements of the above Acts.
Conclusion
1.60
The committee found the annual report to be 'apparently satisfactory'.
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