Review of Annual Reports


Review of Annual Reports

Introduction

1.1        Annual reports of departments and agencies are referred to Senate Standing Committees under Senate Standing Order 25(20) in accordance with an allocation of departments and agencies in a resolution of the Senate.

1.2        The committee notes that significant changes have been made to the Administrative Arrangements Order (AAO) since the last budget estimates round. These changes have resulted in changes to the allocation of portfolios to committees so that the Economics Committee now covers the following portfolios:

  • Innovation, Industry, Science and Research;
  • Resources, Energy and Tourism; and
  • Treasury.[1]

1.3        The structures and outcomes, and relevant Parts of the AAO, for each of these portfolios are summarised in Appendices 5, 6 and 7, respectively.

1.4        Standing order 25(20) requires the committee to:

  • examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory;
  • 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;
  • investigate and report to the Senate on any lateness in the presentation of annual reports;
  • in considering an annual report, take into account any relevant remarks about the report made in debate in the Senate;
  • if the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates;
  • 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;
  • draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports; and
  • 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.[2]

Purpose and requirements of annual reports

1.5        Annual reports provide information on the success (or otherwise) of departments and agencies in meeting targets outlined in the portfolio budget statements, their primary function being to assist in ensuring the public accountability of government departments and agencies. This is undertaken through the tabling of annual reports in the Parliament; and their scrutiny by Senate committees in accordance with Senate Standing Order 25(20). This process thus allows Parliament to make informed judgments on the executive's performance in administering government programs.

1.6        Departments of State and Executive Agencies present their annual reports pursuant to sections 63(2) and 70(2) of the Public Service Act 1999, respectively. For 2006-07, these are required to comply with the Department of the Prime Minister and Cabinet's Requirements for Annual Reports, approved by the Joint Committee of Public Accounts and Audit on 13 June 2007.[3]

1.7        Section 3(1) of the Requirements for Annual Reports states that 'As a matter of policy, they [the annual reporting requirements] also apply to prescribed agencies under section 5 of the Financial Management and Accountability Act 1997' (FMA Act).

1.8        Commonwealth authorities and companies present their annual reports pursuant to their own enabling legislation and/or sections 9 and 36 of the Commonwealth Authorities and Companies Act 1997 (CAC Act), respectively. The reports of Commonwealth authorities subject to the CAC Act must be produced in accordance with the Commonwealth Authorities and Companies (Report of Operations) Orders 2005. Annual reports of Commonwealth companies are required to be based on the reporting requirements under the Corporations Act 2001.

1.9        The Department of Finance and Deregulation (Finance) publishes a useful chart which shows which agencies are subject to the FMA Act and the CAC Act. This information is also available on the Finance website at http://www.finance.gov.au/finframework/fma_agencies.html; and http://www.finance.gov.au/finframework/cac_bodies.html.

1.10      The enabling legislation of some agencies may require that agency to report on matters other than those included in the guidelines, or impose different reporting requirements, for example in relation to the date by which the report should be presented. The committee's view is that such agencies, while bound by their enabling legislation, should also comply with the requirements imposed under the government's policy, to the extent that the requirements do not conflict.

Reports referred to the committee

1.11      Under Standing Order 25(20)(f), the committee is required to report on annual reports of departments and agencies tabled between 1 May and 31 October each year by the tenth sitting day of the following year. This year that date is 20 March 2008. The committee is also required to report on annual reports tabled between 1 November and 30 April of the following year by the tenth sitting day after 30 June of that year. 

1.12      This report examines the following annual reports which were tabled in the Senate or presented to the President between 1 May 2007 and 31 October 2007:

  • Australian Bureau of Statistics (ABS) – Annual Report 2006-07
  • Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS) – Annual Report 2006-07
  • Australian Office of Financial Management (AOFM) – Annual Report 2006-07
  • Australian Research Council (ARC) – Annual Report 2006-07
  • Australian Statistics Advisory Council (ASAC) – Annual Report 2006-07
  • Commonwealth Grants Commission (CGC) – Annual  Report 2006-07
  • Commonwealth Scientific and Industrial Research Organisation (CSIRO) – Annual Report 2006-07
  • Department of Education, Science and Training (DEST) – Annual Report 2006-07
  • Department of Industry, Tourism and Resources (DITR) – Annual Report 2006-07
  • Department of the Treasury – Annual Report 2006-07
  • IIF Investments Pty Limited, IIF (CM) Investments Pty Limited, IIF BioVentures Pty Limited, IIF Foundation Pty Limited and IIF Neo Pty Limited (IIF companies)– Annual Reports 2005-06
  • National Offshore Petroleum Safety Authority (NOPSA) and NOPSA Board – Annual Reports 2006-07
  • Reserve Bank of Australia (RBA) – Annual Report 2006-07
  • Royal Australian Mint – Annual Report 2006-07

Timeliness

1.13      Standing Order 25(20)(c) requires the committee to report to the Senate on the late presentation of annual reports.

1.14      Section 4 of the Requirements for Annual Reports (for departments and FMA Act agencies) states that annual reports are to be presented to each House of Parliament on or before 31 October in the year the report is given. This ensures that annual reports are available for scrutiny by Senate committees at the supplementary budget estimates hearings.

1.15      Section 9 of the CAC Act stipulates that the deadline for furnishing the Minister with relevant annual reports is the 15th day of the 4th month after the end of the financial year, that is, 15 October where the end of the financial year is 30 June.

1.16      The committee notes that government agencies reporting in accordance with their own legislation are often required to prepare for the relevant Minister their annual report 'as soon as is practicable' after a particular date. The committee draws attention to sections 34C(2) and (3) of the Acts Interpretation Act 1901, which stipulate that where no date for providing a report to a Minister is specified, the report should be presented no more than six months after the reporting period, and the Minister must provide the report to the Parliament within 15 sitting days after he or she receives it.

1.17      The committee notes that the 2005-06 annual reports for the IIF companies were tabled in the Senate on 18 September 2007.  This is over 12 months from the end of the 2005-06 financial year.

1.18      The remaining annual reports considered in this report were tabled within their required timeframe.

Other comments on reports

1.19      In accordance with Standing Order 25(20)(a) the committee is required to examine reports and inform the Senate as to whether they are 'apparently satisfactory'. The committee considers compliance with the reporting guidelines specified by the legislation under which departments and agencies present their annual reports.

1.20      The committee considers that the reports it has examined are generally 'apparently satisfactory'.

1.21      While no longer mandatory under the reporting requirements, the committee recommends the inclusion of a compliance index in annual reports, which preferably should include a nil return entry where the agency has nothing to report under an item. A compliance index is a useful feature of reports and considerably assists the committee's task of assessing reports. It also assists agencies by clearly showing that their compliance obligations have been met.

1.22      Where agencies have reporting requirements under various Acts the inclusion of a comprehensive compliance index covering all relevant requirements is a useful addition to agency annual reports. The committee commends the Australian Research Council and Commonwealth Scientific and Industrial Research Organisation for their inclusion of comprehensive indexes in their 2006-07 annual reports.

Australian Bureau of Statistics (ABS) – Annual Report 2006-07

1.23      The Australian Bureau of Statistics (ABS) is a statutory agency under the Public Service Act 1999 and presents its annual report in accordance with the provisions of subsection 24(1) of the Australian Bureau of Statistics Act 1975. The ABS is also a prescribed agency under the FMA Act.

1.24      The committee considers that the ABS has met its reporting requirements under these Acts and commends the ABS for including a detailed compliance index at the beginning of its 2006-07 annual report.

Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS) – Annual Report 2006-07

1.25      The Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS) is part of the new Innovation, Industry, Science and Research portfolio. As a result, AIATSIS now falls within the responsibility of the Economics Committee under the revised allocation of portfolios outlined in paragraph 1.2.  In the report the Chairperson of AIATSIS, Professor Mick Dodson, describes the Institute as 'not only a peak research organisation, but also the point of access to a vast repository of recorded knowledge and cultural artefacts of Australia's Aboriginal and Torres Strait Islander peoples.'[4]

1.26      AIATSIS is a statutory authority established under the Australian Institute of Aboriginal and Torres Strait Islander Studies Act 1989. AIATSIS presents its annual report in accordance with the provisions of section 9 of the CAC Act.

1.27      The committee considers that AIATSIS has met its reporting requirements under the CAC Act, and commends the Institute for including a compliance index in its report.

Australian Office of Financial Management (AOFM) – Annual Report
2006-07

1.28      The Australian Office of Financial Management (AOFM) is a prescribed agency under the FMA Act.

1.29      The committee considers the AOFM's report to be satisfactory and commends the AOFM for including a compliance index in its report.

Australian Research Council (ARC) – Annual Report 2006-07

1.30      The Australian Research Council (ARC) is part of the new Innovation, Industry, Science and Research portfolio. As a result, the ARC now falls within the responsibility of the Economics Committee under the revised allocation of portfolios outlined in paragraph 1.2. The ARC is the primary agency responsible for administering Australian Government competitive funding for research in universities. In 2006-07 the ARC administered a budget of $570.3 million for the National Competitive Grants Programme, accounting for 9 per cent of total Australian Government financial assistance for research and innovation.[5]

1.31      The ARC is a statutory agency under the Public Service Act 1999 and presents its report in accordance with the provisions of section 46 of the Australian Research Council Act 2001 (ARC Act). The ARC is also a prescribed agency under the FMA Act.

1.32      The committee considers that the ARC has met its reporting requirements under these Acts and commends the ARC for including a comprehensive compliance index which included annual reporting requirements stipulated in the ARC Act.

Australian Statistics Advisory Council (ASAC) – Annual Report 2006-07

1.33      The Australian Statistics Advisory Council (ASAC) is required to present an annual report in accordance with subsection 24(2) of the Australian Bureau of Statistics Act 1975. The committee notes that there are only a few requirements in the Act relating to ASAC's annual reports, and considers the report to be satisfactory.

Commonwealth Grants Commission (CGC) – Annual Report 2006-07

1.34      Under the new Administrative Arrangements Order outlined in paragraph 1.2, the Commonwealth Grants Commission (CGC) has been moved from the former Finance and Administration portfolio to the Treasury portfolio. Therefore, the CGC now falls within the responsibility of the Economics Committee. The CGC's primary role is to provide advice to the Australian Government on the allocation among the States of GST revenue and health care grants.[6]

1.35      The CGC is established under the Commonwealth Grants Commission Act 1973 and is a prescribed agency under the FMA Act.

1.36      The committee considers that the CGC has largely met its reporting requirements, although the committee suggests that the CGC's report could be improved by including a specific compliance index.

Commonwealth Scientific and Industrial Research Organisation (CSIRO) – Annual Report 2006-07

1.37      The Commonwealth Scientific and Industrial Research Organisation (CSIRO) is part of the new Innovation, Industry, Science and Research portfolio. As a result, the CSIRO now falls within the responsibility of the Economics Committee under the revised allocation of portfolios outlined in paragraph 1.2.  The CSIRO's core roles, as outlined in its 2006-07 annual report, are:

  • addressing major national challenges and opportunities, through harnessing the breadth and depth of the CSIRO's expertise;
  • creating new, or significantly transforming, industries to increase the competitiveness and sustainability of Australian industry;
  • delivering incremental innovation to improve the efficiency and competitiveness of existing industries;
  • providing fact-based solutions which meet community needs and knowledge that informs Government policy; and
  • advancing the frontiers of science, an essential component of maintaining long-term capability.[7]

1.38      The CSIRO is a statutory authority that presents its annual report in accordance with the provisions of section 9 of the CAC Act and section 51 of the Science and Industry Research Act 1949 (the SIR Act).

1.39      The committee considers that the CSIRO has met its reporting requirements under these Acts and commends the CSIRO for including a comprehensive compliance index which included annual reporting requirements stipulated in the SIR Act.

Department of Education, Science and Training (DEST) – Annual Report 2006-07

1.40      Under the new allocation of portfolios outlined in paragraph 1.2 the Economics Committee is responsible for the Innovation, Industry, Science and Research portfolio.  The science and research aspects of this portfolio were largely the responsibility of the Department of Education, Science and Training (DEST) in the 2006-07 financial year. The Senate Standing Committee on Education, Employment and Workplace Relations will consider DEST's 2006-07 Annual Report in detail in its Report on Annual Reports (No. 1 of 2008).

Department of Industry, Tourism and Resources (DITR) – Annual Report 2006-07

1.41      Under the new allocation of portfolios outlined in paragraph 1.2 the Economics Committee is responsible for the Innovation, Industry, Science and Research, and Resources, Energy and Tourism portfolios. The responsibilities of the former Department of Industry, Tourism and Resources (DITR) fall within the purview of these new portfolios.

1.42      The DITR was a Department of State under the Public Service Act 1999 and presented its annual report in accordance with the provisions of section 63 of that Act, and the FMA Act.

1.43      In the committee's Report on Annual Reports (No. 1 of 2007) the committee highlighted the requirement for departments to include a list of discretionary grant programmes they administer in their annual report. The committee noted that it was unclear when examining DITR's 2005-06 Annual Report whether the department administered any discretionary grant programmes. The committee commends DITR for remedying this in its 2006-07 Annual Report by including an appendix on discretionary grants and providing a list of discretionary grants for 2006-07 on its website.

1.44      In its previous report the committee also noted that DITR's annual report would benefit from the inclusion of a compliance index. Again, the committee commends DITR for remedying this by including a specific compliance index in its
2006-07 Annual Report.

Department of the Treasury (Treasury) – Annual Report 2006-07

1.45      The Department of the Treasury is a Department of State under the Public Service Act 1999 and presents in annual report in accordance with section 63 of that Act, and the FMA Act.

1.46      In its Report on Annual Reports (No. 1 of 2007) the committee noted that Treasury's summary statement on consultancies was not in accordance with the requirements for annual reports approved by the Joint Committee of Public Accounts and Audit because the statement did not include the number and value of all consultancy contracts. The committee commends Treasury for remedying this in its 2006-07 Annual Report.

1.47      In its previous report the committee also noted that Treasury's 2005-06 Annual Report included a compliance index, but it did not address all of the mandatory reporting requirements. The committee commends Treasury for including a more comprehensive compliance index in its 2006-07 Annual Report.

IIF Investments Pty Limited, IIF (CM) Investments Pty Limited, IIF BioVentures Pty Limited, IIF Foundation Pty Limited and IIF Neo Pty Limited (IIF companies)  – Annual Reports 2005-06[8]

1.48      IIF Investments Pty Limited, IIF (CM) Investments Pty Limited, IIF BioVentures Pty Limited, IIF Foundation Pty Limited and IIF Neo Pty Limited (the IIF companies) are Commonwealth companies and are therefore required to report under section 36 the CAC Act.

1.49      The committee considers that the IIF companies have largely met these requirements and that therefore their reports are satisfactory.

National Offshore Petroleum Safety Authority (NOPSA) and NOPSA Board – Annual Reports 2006-07

1.50      The National Offshore Petroleum Safety Authority (NOPSA) is a statutory agency under the Public Service Act 1999 and presents its annual report in accordance with the provisions of section 150YV of the Petroleum (Submerged Lands) Act 1967. NOPSA is also a prescribed agency under the FMA Act.

1.51      The committee considers that NOPSA has largely met its reporting requirements and commends NOPSA for including a compliance index in its report.

1.52      The NOPSA Board presents its annual report in accordance with the provisions of subsection 150YV(3) of the Petroleum (Submerged Lands) Act 1967. The committee notes that there are only a few requirements in the Act relating to the NOPSA Board's annual reports, and considers the report to be satisfactory.

Reserve Bank of Australia (RBA) – Annual Reports 2006-07

1.53      The Reserve Bank of Australia (RBA) is a statutory authority established under the Reserve Bank Act 1959. The RBA presents its annual report in accordance with section 9 of the CAC Act.

1.54      The committee considers that the RBA has met its reporting requirements under the Act and commends the RBA for consistently tabling its annual report well before the required deadline.

Royal Australian Mint – Annual Report 2006-07

1.55      The Royal Australian Mint is a prescribed agency under the FMA Act.

1.56      The committee considers the Mint's report to be satisfactory and commends the Mint for including a compliance index in its report.

Remarks made in the Senate

1.57      Senate Standing Order 25(20)(d) directs the committee to take into account remarks made in the Senate when considering annual reports.

1.58      None of the annual reports considered in this report have been the subject of debate in the Senate.

Future developments

1.59      As noted in the committee's Report on Annual Reports (No. 2 of 2007), the Governance Review Implementation (Treasury Portfolio Agencies) Act 2007 was assented to on 5 June 2007. As a result, the Australian Prudential Regulation Authority, Australian Securities and Investments Commission and Corporations and Markets Advisory Committee will be brought under the FMA Act from the 2007-08 financial year.

 

Senator Annette Hurley
Chair

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