Chapter 2Overview of annual reports examined
2.1Senate Standing Order 25(20)(b) provides for the committee to consider selected reports in more detail. Annual reports of the following entities were selected for this report:
Australian Public Service Commission—Annual Report 2022–23
ASC Pty Ltd—Annual Report 2022–23
Department of Finance—Annual Report 2022–23
Australian Public Service Commission
2.2The Australian Public Service Commission (APSC) is a Non-corporate Commonwealth Entity established by the Public Service Act 1999 (Public Service Act) and subject to the Public Governance, Performance and Accountability Act2013 (PGPA Act). It is part of the Prime Minister and Cabinet portfolio.
2.3The APSC's purpose, as set out in its Corporate Plan 2022–26, is to 'position the APS workforce for the future to ensure it meets the demands and expectation of the Australian Government and people'. The APSC achieves its stated purpose through working towards:
Outcome 1: Increased awareness and adoption of best practice public administration by the public service through leadership, promotion, advice and professional development, drawing on research and evaluation.
2.4The Australian Public Service Commissioner, Dr Gordon de Brouwer, outlined several key changes to the APSC's operating environment during the reporting period. Dr de Brouwer highlighted the Robodebt Scheme's impact on public trust in the Australian Public Service and the recommendations arising from the subsequent Royal Commission report on the whole-of-service code of conduct. Additionally, Dr de Brouwer noted that the Government's APS Reform Agenda, launched in October 2022, defined the APSC's work in the reporting period.
Compliance
2.5The APSC's annual report for 2022–23 was submitted to the Minister for the Public Service, Senator the Hon Katy Gallagher, on 5 October 2023. It was tabled on 12 October 2023 in the House of Representatives and presented to the Senate the same day.
2.6The APSC prepared its annual report under the requirements of section 46 of the PGPA Act. The report presented information which was relevant, reliable, concise, clear and balanced, and included the required aids to access. The committee acknowledges that the online version of the APSC's annual report on the Transparency Portal contained hyperlinks in the List of Requirements which facilitated ease of access to specific parts of the report. However, the committee notes that the List of Requirements in the print version of the annual report did not include specific page numbers. The committee encourages the APSC to list page numbers in the print version of its annual report. The committee found the report to be compliant with each of its reporting requirements.
2.7Listed below is information that was provided on the most significant developments in external scrutiny on the APSC, and the APSC's response to said scrutiny.
External scrutiny
2.8The APSC noted that it had not been subject to any reports by the Commonwealth Ombudsman or the Australian Information Commissioner. No judicial decisions or decisions of administrative tribunals in the reporting period had a significant impact on operations.
2.9In the reporting period the APSC appeared before the Senate Finance and Public Administration Legislation Committee during Senate estimates on Monday 7November 2022, Tuesday 14 February 2023, and Thursday 25 May 2023. The APSC also contributed a submission to the Senate Finance and Public Administration References Committee's inquiry into management and assurance of integrity by consulting services.
Performance
2.10The APSC prepared annual performance statements in accordance with paragraphs 39(1)(b) and 34(4) of the PGPA Act. The performance statement accurately presents the APSC's performance as required by section 39(2) of the PGPA Act.
2.11The APSC outlined four strategic priorities in its Corporate Plan 2022–23. The outcomes of each of the priorities are subsequently measured and reported on in the annual report against eleven performance measures and targets that are also outlined in the corporate plan.
2.12The APSC reported that it had achieved or substantially achieved eight out of its eleven performance measures and 'made a significant contribution to the APS, our staff and the government'. The three performance measures that were partially achieved or not achieved are considered below in further detail.
Performance measure 3. The consolidation of entry-level programs (through the Career Pathways campaign) delivers more efficient recruitment of entry-level capability into the APS
2.13The measure of success for this performance measure was to reduce average spend per entry-level employee participating in Career Pathways programs. The result for the reporting period was that average spend per entry-level employee increased by approximately $30 per candidate compared to 2021–22.
2.14Although this performance measure was not achieved, the committee notes the 2023 graduate cohort spend per candidate was $230 compared to the $650 per candidate spend for the 2021 graduate cohort.
Performance measure 4. Commission initiatives improve the operating environment for temporary mobility in the APS, to assist the delivery of government priorities
2.15The measure of success for this performance measure was a reduction in the proportion of APS employees reporting barriers to mobility and the use of the APS Surge Reserve to assist host agencies to deliver outcomes. In the reporting period, fewer APS employees reported barriers to mobility. However, the APS Surge Reserve experienced low use, resulting in a partially achieved result.
2.16The APSC noted that employee mobility is not the immediate priority it was during the height of the COVID pandemic. As such the mobility frameworks have been transitioned from a priority function to a business-as-usual status.
Performance measure 11. Support the APS to build a continuous learning culture and develop the critical capabilities identified in the APS Workforce Strategy
2.17The first measure of success for this performance measure focussed on the actions from the APS Learning and Development Strategy and Action Plan. This measure was substantially achieved.
2.18The APSC did not achieve the second measure of success, namely that APS agencies report satisfaction with the effectiveness of learning and development for developing critical capabilities. The APS learning and development survey questions and survey tool are partially complete. The necessary data is not currently available to confirm the measure of success.
Financial Statements
2.19The APSC prepared financial statements in accordance with subsection 42(2) and 41(2) of the PGPA Act, the PGPA Rule and the Australian Accounting Standards and Interpretations.
2.20The APSC recorded a comprehensive income of $82.4 million in 2022–23, an increase of $15.4 million from 2021–22. It attributed this outcome to the first full-year funding for the APS Digital Profession and an increase in fee-for-service revenue from the APS Academy.
Committee view
2.21The committee found the APSC's annual report was well-presented and informative. Its performance reporting succinctly married the information between its corporate plan and Portfolio Budget Statement, and aligns with the Commonwealth Resource Management Framework's clear read principle. For the purposes of its report to the Senate, the committee considers the entity's annual report to be 'apparently satisfactory'.
ASC Pty Ltd
2.22ASC Pty Ltd (ASC) is a Government Business Enterprise (GBE) and Commonwealth Company, operating under the Finance portfolio represented by the Minister for Finance, Senator the Hon Katy Gallagher. ASC is subject to the PGPA Act and registered under the Corporations Act 2001 (Corporations Act).
2.23ASC's stated core focus is 'meeting Collins class Submarine (CCSM) performance deliverables and achieving continuous improvement within the program, while supporting its experienced workforce, in order for ASC to remain Australia's leading provider of submarine platform expertise and services'.
2.24The Chair of the ASC Board, Mr Bruce Carter, identified the Life of Type Extension (LOTE) project for the CCSM and development of the Sovereign Shipbuilding Talent Pool (SSTP) to assist the in the development of Australia's future Submersible Ship Nuclear (SSN) program.
Compliance
2.25ASC's annual report for 2022–23 was submitted to the Minister for Finance, Senator the Hon Katy Gallagher on 30 September 2023. It was tabled on 16November 2023 in the House of Representatives and presented on 20October 2023 to the Senate.
2.26ASC prepared its annual report under the requirements of the PGPA Act and Rule and the Corporations Act. As a GBE, ASC has additional disclosure requirements under section 28F of the PGPA Rule, relating to changes in financial conditions, dividend payments, community service obligations and commercially prejudicial information. There were no significant changes to the company's business during the reporting period.
2.27The committee found the ASC annual report to be compliant in each of its reporting requirements.
Performance
2.28ASC's Statement of Corporate Intent for 2022–23 outlined seven key priorities:
Implement scheduled maintenance activities on CCSMs at its Osborne and Henderson facilities.
Continue to progress its planning and design work for the CCSM LOTE program.
Continue to implement the SSTP to further develop the nation's sovereign submarine workforce.
Deliver state-of-the-art submariner courses, including the use of advanced technology that provides a realistic 3D experience to train submariners.
Continue implementation of ASC's Digital Transition Program.
Monitor and adapt to the COVID-19 pandemic to minimise the risks to employees and ASC's CCSM deliverables.
Continue to deliver its construction responsibilities on the two Offshore Patrol Vehicles, NUSHIPs Arafura and Eyre.
2.29In the ASC's annual report, the Chief Executive Office and Managing Director, Mr Stuart Whiley addressed progress of these targets in his report on the ASC's activities.
Financial statements
2.30ASC's annual report included financial statements which were prepared in accordance with the Corporations Act, as well as complying with Australian Accounting Standards, the International Financial Reporting Standards, and other mandatory professional reporting requirements. The statements received an unqualified assurance report from the ANAO.
2.31ASC reported a consolidated profit for the period of $21.5 million and a comprehensive income of $21.2 million.
Committee view
2.32The committee found ASC's annual report to be well-presented, and providing a comprehensive overview of the entity's 2022–23 operations. For the purposes of its report to the Senate, the committee considers the company's annual report to be 'apparently satisfactory'.
Department of Finance
2.33The Department of Finance (Finance) is a Non-corporate Commonwealth Entity and executive agency subject to the PGPA Act as part of the Finance portfolio.
2.34Finance's purpose, as set out in its Corporate Plan 2022–23, is to 'assist the Australian Government to achieve its fiscal and policy objectives by advising on expenditure, managing sustainable public sector resourcing, driving public sector transformation and delivering efficient, cost-effective services to, and for, government'.
2.35The Secretary of the Department of Finance, Ms Jenny Wilkinson PSM, outlined key changes to Finance's operating environment during the reporting period. The change of government led to the delivery of two Commonwealth Budgets in 2022–23 and an increased workload in implementing new policy and programs.
Compliance
2.36Finance's annual report for 2022–23 was submitted to the Minister for Finance, Senator the Hon Katy Gallagher, on 3 October 2023. It was tabled on 16November 2023 in the House of Representatives and presented on 20October 2023 to the Senate.
2.37Finance prepared its annual report under the requirements of section 46 of the PGPA Act. The report presented information which was comprehensive and reliable and included the required aids to access. The committee found the report to be compliant with each of its reporting requirements.
External scrutiny
2.38Finance noted that it had not been subject to any reports by the Commonwealth Ombudsman or the Australian Information Commissioner. There were no judicial decisions or decisions of administrative tribunals in the reporting period that had or may have a significant impact on operations. Finance was involved in ten reports by the Australian National Audit Office.
2.39In the reporting period, Finance appeared before and made submissions to the Senate Standing Committees on Finance and Public Administration. Finance appeared at Senate estimates on 7 and 8 November 2022, 13 and 14 February 2023, and 23, 25 and 26 May 2023. Finance made submissions to several inquiries for both the Legislation and References committees. Finance also appeared and made submissions to several other Parliamentary committees.
Performance
2.40Finance prepared annual performance statements in accordance with paragraph 39(1)(b) and 34(4) of the PGPA Act. The performance statement accurately presents Finance's performance as required by section 39(2) of the PGPA Act.
2.41Finance has three budget outcomes outlined in its Corporate Plan and Portfolio Budget Statement. The budget outcomes are subsequently measured and reported on in the annual report against twenty performance measures that are also outlined in the corporate plan.
2.42Finance reported that it had fully achieved fourteen and substantially achieved six of its twenty performance measures and that '[Finance's] ability to respond effectively is evidenced in [its] achievements against each of the performance measures'.
Financial Statements
2.43Finance prepared financial statements in accordance with subsection 42(2) and 41(2) of the PGPA Act, the PGPA Rule and the Australian Accounting Standards and Interpretations. The independent auditor approved Finance's financial statements without qualification and stated that the Finance will be able to pay its debts as and when they fall due.
ANAO performance audit report on the Administration of the Parliamentary Expenses Management System
2.44The committee's examination of the annual reports of agencies, alongside the estimates process, forms an important part of the committee's scrutiny and accountability functions. From time to time, the committee also draws on the work of other agencies such as the Auditor-General to complement this scrutiny function.
2.45The Auditor-General is an independent officer of the Parliament with responsibility under the Auditor-General Act 1997 for auditing Commonwealth entities and reporting to the Australian Parliament. The Auditor-General is supported by the Australian National Audit Office (ANAO).
2.46The Department of Finance, under budget Outcome 3, provides support for parliamentarians and others as required by the Australian Government through the delivery of, and advice on, work expenses and allowances, entitlements and targeted programs.
2.47Parliamentarians utilise an IT system named the Parliamentary Expenses Management System (PEMS) to claim office and travel expenses and process payroll services for parliamentary staff. The implementation of PEMS resulted from a 2016 review into the parliamentary entitlement system that recommended a fit-for-purpose online expenses system. The project commenced in January 2018 with original completion due by June 2020.
2.48On 24 January 2024, the ANAO published its performance audit report on the Administration of PEMS. The Auditor-General agreed to undertake an audit into PEMS on 4 April 2023 after a request by the Special Minister of State, Senator the Hon Don Farrell, on 7November 2022.
2.49The performance audit found that Finance's administration of the PEMS project was partly effective. Finance established appropriate project governance arrangements, project documentation, and risks plans. However, the initial planning by Finance did not clearly define the scope and user requirements. This led to a significant increase to costs and multiple delays.
2.50The ANAO made two recommendations to Finance resulting from the audit, Finance agreed to both recommendations. The first recommendation was that Finance ensures that future projects have:
(a)clearly defined and agreed scope and deliverables;
(b)a planned approach to gathering and agreeing user requirements that is followed; and
(c)a process to implement and monitor changes to scope and requirements, including budgetary impacts.
2.51The second recommendation was that Finance completes a benefits realisation review by December 2024 to:
(a)track whether PEMS does or will have the future capability to deliver its intended benefits as originally agreed by government; and
(b)establish a process to track and report on the ongoing benefits of PEMS.
Committee view
2.52Regarding PEMS, the committee encourages Finance to consult with parliamentarians to deliver effective ongoing system enhancements that improve functionality and the experience of users. The committee also looks forward to the delivery of a benefits realisation review by December 2024.
2.53The committee found Finance's annual report to be well-structured and informative. For the purposes of its report to the Senate, the committee considers Finance's annual report to the 'apparently satisfactory'.
Senator Louise PrattChair