Chapter 3Annual reports of agencies
3.1The annual reports from the 2021–22 financial year (the reporting period) from the agencies within the Attorney-General’s and Home Affairs portfolios were referred to the committee for examination and report between 1 May 2022 and 31 October 2022. These annual reports are set out in paragraph 1.12.
3.2On this occasion, the committee has examined in more detail the reports of the Australian Human Rights Commission (AHRC) and the Office of the Commonwealth Ombudsman (Ombudsman).
Australian Human Rights Commission
Tabling of the report
3.3The Human Rights Commission Annual Report 2021–22 was tabled in the House of Representatives and the Senate on 25 October 2022. The annual report was presented to the Attorney-General on 11 October 2022, meeting the requirements under section 46 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).
President’s review
3.4In her review, the President of the AHRC, Emeritus Professor Rosalind Croucher AM, reflected on the financial challenges experienced by the AHRC during the 2021–22 financial year. She indicated that it became clear through an independent review that the AHRC had been structurally underfunded for some time. Expenditure was reduced during the reporting period by freezing recruitment and non-critical expenditure, as well as reducing the AHRC’s staff profile. Over the course of the reporting period, the AHRC reduced its number of staff by approximately 30 per cent. Professor Croucher commended the AHRC’s staff for their efforts over the reporting period, particularly as the AHRC experienced an ‘unprecedented increase in complaints and inquiries’.
3.5As part of the efforts to address the financial challenges faced by the AHRC, Professor Croucher mentioned the reforms made to the internal governance and financial management systems, procedures, and operations of the AHRC. These reforms were made with the involvement, advice, and support of the AHRC’s external Audit and Risk Committee, the Attorney-General’s Department, and the Department of Finance.
3.6Professor Croucher also discussed the five-year review of the AHRC’s compliance with the Paris Principles relating to the status of national institutions. The review is conducted by the Sub-Committee on Accreditation (SCA) of the Global Alliance of National Human Rights Institutions and has ramifications for the AHRC’s ‘A status’ as a national human rights institution (NHRI). She reported that the SCA deferred its decision on the AHRC’s accreditation until October 2023. She further noted that this represents the first time that the AHRC’s ‘A status’ as an NHRI has been in doubt.
3.7The President indicated that the workload of the AHRC continued to be elevated during the reporting period, mainly due to the continuation of the COVID-19 pandemic. Professor Croucher reported an ‘unprecedented increase’ in the number of complaints and inquiries over the course of the 2021–22 financial year.
3.8Professor Croucher also reflected on the work the AHRC undertook throughout the reporting period. During that period the following initiatives were progressed:
the delivery of the Set the Standard inquiry and report;
the development of cross-portfolio processes for consultations with children, young people and their families to inform five national strategies over the next two years;
the launch of the next iteration of the Racism. It Stops with Me campaign;
the advancement of the IncludeAbility project, which aims to increase the employment opportunities of persons with disability;
the launch of the What’s age got to do with it? report, which provided insights into ageism between and within generations; and
the continuation of the implementation of recommendations contained in the Wiyi Yani U Thangani (Women’s Voices) report.
Performance reporting
3.9The AHRC has one outcome:
An Australian society in which human rights are respected, protected and promoted through independent investigation and resolution of complaints, education and research to promote and eliminate discrimination, and monitoring and reporting on human rights.
3.10The AHRC’s Corporate Plan2021–22(AHRC corporate plan) identified four organisational goals:
greater prioritisation of human rights issues at the national level;
more people, communities, and organisations respect and understand human rights;
more people, communities, and organisations take action to respect protect and promote human rights in their own contexts; and
improved access to justice and remedy for people and communities whose rights are breached.
3.11The AHRC corporate plan also sets out eight outcomes that are used to evaluate success in achieving the organisational goals. Of those outcomes, six are linked to the performance criteria outlined in the Attorney-General’s Portfolio Budget Statements 2021–22 (PBS).
3.12The legislative requirements for measuring and assessing the performance of Commonwealth entities are set out in section 38 of the PGPA Act. According to subsection 38(2) of that Act, ‘[t]he measurement and assessment must comply with any requirements prescribed by the rules’.
3.13The requirements for performance measures are outlined in section 16EA of the Public Governance, Performance and Accountability Rule 2014:
The performance measures for an entity meet the requirements of this section if, in the context of the entity’s purposes or key activities, they:
(a)relate directly to one or more of these purposes or key activities; and
(b)use sources of information and methodologies that are reliable and verifiable; and
(c)provide an unbiased basis for the measurement and assessment of the entity’s performance; and
(d)where reasonably practicable, comprise a mix of qualitative and quantitative measures; and
(e)include measures of the entity’s outputs, efficiency and effectiveness if those things are appropriate measures of the entity’s performance; and
(f)provide a basis for an assessment of the entity’s performance over time.
3.14The AHRC clearly articulated how its performance measures relate to its purpose and used robust sources of information to provide an unbiased assessment of its performance. The AHRC could, however, improve its performance reporting by including information that measures the efficiency and effectiveness of its performance.
3.15For instance, the AHRC aimed to have ‘high rates’ of participants report that its events and campaigns are engaging and relevant. The AHRC indicated that most participants in its adult training programs reported satisfaction with the quality and relevance of the training. However, it did not provide a precise indication of the proportion of participants who were satisfied.
3.16Similarly, the AHRC aimed to achieve an average engagement rate above two per cent for social media posts about its education and information activities. The AHRC indicated that it reviewed ‘media coverage (including social media), web analysis and key metrics’, with most of those key metrics achieved.
3.17The inclusion of an analysis and discussion of the quantitative data collected by the AHRC would provide a deeper understanding of its efficiency and effectiveness in achieving its purpose. The setting of quantitative performance targets would also assist in tracking the AHRC’s performance over time.
Financial performance
3.18The AHRC reported that in 2021–22 it received an equity injection of $16.05million to return it ‘to a financially sustainable footing’. According to the cashflow forecasts prepared by the AHRC, there are sufficient cash reserves to fund its operations for at least 19 months at current resourcing levels. The AHRC reported that, if no additional funding is secured after that time, it ‘will further reduce staffing to a level that is commensurate with available funding’.
3.19During the reporting period, a tripartite steering committee was established by the Attorney-General’s Department in conjunction with the AHRC and the Department of Finance. The AHRC reported:
… the financial management of the organisation has been significantly strengthened. A Director, Corporate Services role with oversight of Finance, Human resources and ICT [Information and Communications Technology] has been created and a new CFO [Chief Finance Officer] appointed. The budget management process has been improved by the establishment of budget reporting standards and thresholds for budget variances and commentary. New financial reporting processes have been implemented and budget monitoring mechanisms have been enhanced with the establishment of a Budget Steering Committee to regularly review financial statements and budget variance reports and take appropriate corrective action, where required.
3.20The AHRC restated its 2021 Statement of Comprehensive Income, due to an error identified in the financial results from the 2020–21 reporting period. The AHRC explained that it refunded $2.338 million of unspent project funds received for the supply of domestic and international human rights technical assistance programs. After this adjustment, the AHRC recorded a comprehensive loss of $5.249 million in the 2020–21 financial year instead of the $2.911 million comprehensive loss that was originally reported for that reporting period.
Other matters
3.21The annual report largely meets the requirements of the PGPA Act and the PGPA Rule for annual reports. It appears to be lacking with respect to the mandatory requirement outlined in section 17BE(u) of the PGPA Rule, which requires the table set out in schedule 2A of the PGPA Rule to be included in the annual report.
3.22The committee notes that the AHRC included a copy of the table set out in schedule 2A of the PGPA Rule and that it includes most of the required information. However, the table is incomplete as the reference to PGPA Rule17BE(g) is incorrect. It appears that the AHRC has incorrectly repeated the text of the preceding PGPA Rule (17BE(f)) and omitted the text of PGPA Rule17BE(g). The committee encourages the AHRC to ensure that the table set out in schedule 2A of the PGPA Rule is correct to assist the reader in navigating and understanding the annual report.
Conclusion
3.23The committee considers the report to be ‘apparently satisfactory’.
Office of the Commonwealth Ombudsman
Tabling of the report
3.24The Commonwealth Ombudsman Annual Report 2021–22 was tabled out of session in the Senate on 19 October 2022 before being tabled in the House of Representatives on 25 October 2022. The annual report was presented to the Attorney-General on 28 September 2022, meeting the requirements under section 46 of the PGPA Act.
Review by the Ombudsman
3.25The Commonwealth Ombudsman, Mr Iain Anderson, and Ms Penny McKay, who was the Acting Commonwealth Ombudsman from 1 August 2021 to 31 July 2022, presented a joint review. In their review they farewelled Mr Michael Manthorpe, who retired as the Commonwealth Ombudsman on 1August2022.
3.26Mr Anderson and Ms McKay indicated that the continuation of the COVID-19 pandemic directly affected the work of the Ombudsman. Lockdowns, staff illness, home schooling responsibilities, and general concerns about health and wellbeing contributed to delays in the handling of complaints. A ‘limited-service complaint handling model’ was introduced to ensure the continued delivery of the Ombudsman’s services. However, they noted that this reduced the Ombudsman’s ‘ability to investigate and manage complaints as efficiently as we otherwise would’.
3.27The review indicated that the disruption caused by the pandemic affected the Ombudsman’s performance, particularly in relation to complaint handling and complaint satisfaction.
3.28Several changes have been implemented to improve the Ombudsman’s service delivery. Those changes include ‘reviewing channels used to contact the [Ombudsman], installing and training a surge team, and prioritising the development of a knowledge information system’.
3.29Mr Anderson and Ms McKay also indicated that the Ombudsman’s work in relation to the Optional Protocol to the Convention against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (OPCAT) continued during the reporting period. They noted that the Ombudsman has commenced coordinating meetings of the National Preventative Mechanism network ahead of the January 2023 deadline for OPCAT implementation in Australia.
3.30Mr Anderson and Ms McKay reported that the Ombudsman published its fourth Monitoring Immigration Detention Report to 30 June 2021 during the reporting period. The report contained 17 recommendations and 20 suggestions for improvement to the Department of Home Affairs. They also mentioned the two public reports and 13 recommendations that arose from the Ombudsman’s own motion investigation work during the reporting period. The Ombudsman will continue to monitor the implementation of these recommendations to ensure its ‘work is achieving improvement in public administration’.
3.31In looking ahead to the 2022–23 reporting period, Mr Anderson and Ms McKay indicated that work with the Department of Foreign Affairs and Trade had commenced. The Ombudsman plans to continue to engage with ombudsmen and allied integrity institutions in the Indo-Pacific region during the year ahead.
Performance reporting
3.32The Ombudsman’s outcome is outlined in the PBS:
Fair and accountable administrative action by Australian Government entities and prescribed private sector organisations, by investigating complaints, reviewing administrative action and statutory compliance inspections and reporting.
3.33That outcome is delivered through the purpose of the Ombudsman, which is to:
provide assurance that the Australian Government entities and prescribed private sector organisations that the Ombudsman oversees act with integrity and treat people fairly; and
influence enduring systemic improvement in public administration in Australia and the region.
3.34The PBS further outlines five objectives that guide the Ombudsman towards its purpose. Those objectives are:
Objective 1 — influence Australian and Australian Capital Territory (ACT) Government entities to improve public administration and complaint handling systems through public reports, recommendations and direct engagement.
Objective 2 — provide an efficient, effective and accessible government complaint handling service.
Objective 3 — undertake oversight and assurance activities relating to the integrity of Australian Government entities, ACT Government entities and prescribed private sector organisations.
Objective 4 — provide effective and impartial industry complaint handling services and provision of consumer information.
Objective 5 — deliver capacity building programs under the Australian Aid arrangements to support ombudsmen and allied integrity bodies to improve governance and accountability.
3.35The five objectives are linked to seven performance criteria that are outlined in the Ombudsman’s 2021–22Corporate Plan: Financial Years 2021–22 to 2024–25 (Ombudsman’s corporate plan). Those seven criteria are further divided into 13 quantitative measures and targets against which the Ombudsman measures its performance.
3.36The performance statement in the annual report evaluated the Ombudsman’s performance against the measures included in the Ombudsman’s corporate plan. Read together, the PBS, Ombudsman’s corporate plan, and annual report provide a ‘clear read’ of the Ombudsman’s performance.
3.37During the reporting period, the Ombudsman achieved nine of its 13 targets, with one biennially reported target not reported on.
3.38Of the four targets not achieved were:
target 1a: 65 per cent of people who contacted the Office providing a rating of ‘satisfied’ (or better) with our services in response to complaint satisfaction surveys;
target 1b: 65 per cent of complaint satisfaction survey responses with a rating of ‘satisfied’ (or better) evaluating our independence;
target 2: 90 per cent of service standards met;
target 7b: 100 per cent of reports delivered on time within statutory timeframes.
3.39The Ombudsman reported that 65 per cent of survey respondents were satisfied with its services and 62 per cent of survey respondents were satisfied with its independence.
3.40The Ombudsman explained that the disruption caused by the COVID-19 pandemic has posed significant challenges to its complaint handling functions. As a result of that disruption, it met its internal service standards 46 per cent of the time compared to a target of 90 per cent.
3.41The Ombudsman mentioned that it is working to refine and enhance its complaint handling service delivery using the findings from these surveys and the performance audit conducted by the Australian National Audit Office (ANAO).
3.42According to the Ombudsman, it delivered nine out of 10 reports to the relevant Minister and Parliament within the statutory timeframe of six months. One report was not delivered within the legislated timeframe due to the complexity of the data gathering process and the disruption caused by the COVID-19 pandemic.
Australian National Audit Office performance audit
3.43The ANAO conducted a performance audit into the Ombudsman’s complaint handling service delivery to provide ‘independent assurance to the Parliament that the [Ombudsman] has an effective process in place to manage complaints’.
3.44Overall, the ANAO audit found that ‘[t]he [Ombudsman’s] complaints process is accessible, clear and mostly responsive’. The results of the audit indicated that ‘[t]he communication of outcomes to complainants and the prioritisation of cases was not always in-line with the Standard and Better Practice Guide’. The ANAO noted, however, that the Ombudsman ‘has identified actions to improve the clarity of its communications and responsiveness’.
3.45The ANAO recommended that the Ombudsman ‘establish an enterprise level monitoring and assurance framework to monitor and drive continuous improvement’ of its complaints management process.
3.46The Ombudsman indicated that it has commenced work in response to that recommendation. It has commenced a review of its quality assurance mechanisms, which will contribute to the development of an enterprise framework that will be implemented in the 2022-23 financial year.
3.47The ANAO concluded that the Ombudsman ‘is largely effective in managing complaints directed to it’.
Financial performance
3.48A net cash operating surplus of $1.1 million was recorded by the Ombudsman in 2021–22, compared to a net cash operating surplus of $0.8 million in 2020–21. The net cash operating surplus excluded depreciation, amortisation and includes principal payments on leases.
3.49Total expenses during the reporting period amounted to $45.1 million, which was broadly consistent with the $44.7 million recorded in the previous financial year. The increase in expenditure was due to the addition of the National Disability Insurance Scheme Safeguarding measure ($1.1 million) and increases to the Cyber-Crime Law Enforcement Powers measures ($0.8 million). The increase in expenditure was partially offset by reductions from prior year government decisions related to measures that sought to improve the integrity of the Vocational and Education Training System ($1.4 million).
3.50The value of total assets decreased from $28.1 million in 2020–21 to $24.5 million in 2021–22. The reduction is mainly due to a decrease in trade and other receivables ($0.3 million) and a decrease in non-financial assets ($3.2 million).
Other matters
3.51While the annual report largely meets the requirements of the PGPA Act and the PGPA Rule, this report appears to be lacking with respect to the following three mandatory requirements:
a direct electronic address for the report (PGPA Rule 17AJ(g));
a direct electronic address of the charter determining the functions of the entity’s audit committee (PGPA Rule 17AG(2A)(a)); and
a reference to the website where information on the entity’s information publication scheme under Part II of the Freedom of Information Act 1982 (FOI Act) can be found (PGPA Rule 17AH(1)(d)).
3.52While the Ombudsman has included its website address (in accordance with PGPA Rule 17AJ(f)), to fully comply with the mandatory obligations of PGPA rule 17AJ(g) an explicit reference to the address for the annual report is also required.
3.53The annual report indicated that a copy of the Audit and Risk Committee Charter is available on the Ombudsman’s Audit and Risk Committee Charter webpage and the address of the Ombudsman’s webpage. However, to comply with the PGPA Rule a direct electronic address of the charter is required.
3.54The annual report referred to the Information Publication Scheme (IPS) that is required under Part II of the FOI Act and mentioned that the Ombudsman’s IPS plan is available on its website. The electronic address of the Ombudsman’s website was also provided. To fully comply with the requirements of the PGPA Rule, the direct electronic address to that that plan must be included in the annual report.
3.55The committee encourages the Ombudsman to ensure that direct electronic addresses are included in subsequent annual reports.
Conclusion
3.56The committee commends the work that the Ombudsman is undertaking to improve its complaint handling delivery service. As a minor point, the committee notes that the annual report does not contain direct electronic links to a number of documents as required by the PGPA framework. Instead, the annual report simply refers to its website address. This should be corrected in future annual reports. Therefore, the committee considers the Ombudsman’s annual report to be ‘apparently satisfactory’.
Senator Nita Green
Chair