Examination of the Annual Report for 1995-1996 of the National Crime Authority
© Commonwealth of Australia 2006
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Background
The annual report of the National Crime Authority (NCA) for 1995-96 was
tabled in the House of Representatives on 11 December 1996 and in the
Senate on 13 December 1996. Also tabled in conjunction with the report
were letters written by three members of the Inter-Governmental Committee
on the NCA (IGC).
Paragraph 55(1)(c) of the National Crime Authority Act 1984 (the
Act) requires the Committee:
In accordance with its statutory duty, the Committee has examined the
NCA's 1995-96 annual report (referred to in this report as the NCA report).
To assist its consideration of the NCA report, the Committee held a public
hearing with representatives of the Authority in Canberra on 3 March 1997.
The hearing also included a wide-ranging discussion of topical issues
in relation to the NCA's operations, which discussion is not addressed
in this report but will be considered by the Committee in its continuing
inquiries.
Late tabling
In order to be of value as an accountability document, an annual report
needs to be published as soon as practicable after the conclusion of the
period under report. As indicated above, the NCA report was first tabled
on 11 December 1996, some 5 months after the conclusion of the 1995-96
financial year. Some of the events being reported upon would, of course,
have occurred some 17 months earlier. The Committee sought to examine
the reasons for the lateness of tabling of the NCA report. It wrote to
the Hon. Daryl Williams MP, Attorney-General, on 24 February 1997 to invite
his advice about the apparent late tabling of the NCA report. Mr Williams'
response is attached to this report.
The NCA report contains within its cover a letter signed by NCA Chairperson,
Mr John Broome, formally transmitting the report to the Attorney-General
on 24 September 1997. Mr Williams has advised the Committee that the NCA
report was, in fact, forwarded on that day to the Secretariat of the IGC.
The comments of the members of the IGC were invited by the secretariat
on 30 September 1996, for response by close of business on 16 October
1996. The letters referred to in paragraph 1 represent the only responses
received from the eight State and Territory members of the IGC. The latest
response was sent on 22 October although, according to Mr Williams' advice,
it was not received until 29 October.
Sub-section 61(6) of the Act requires the Attorney-General to cause the
NCA's annual report and any comments made by the IGC to be laid before
each House of the Parliament within 15 sitting days of that House after
the report is received by him. Mr Williams informed the Committee that
he received the report and IGC comments on 29 October but, because of
several questions he had in relation to the annual report, he did not
approve its tabling until, by his own admission, he was in breach of the
statutory reporting deadline.
Mr Williams has indicated that he was asked to table the NCA report by
31 October 1996. The Committee notes that if the NCA were subject to the
standard reporting requirements for Commonwealth agencies, its report
would be required to be tabled by 31 October each year. The Committee
also notes that if the report had been "received" by the Attorney-General
when it was transmitted to him by the NCA's Chairperson on 24 September,
the 15 sitting days would have expired on 7 November 1996.
The Committee will examine this matter further in the context of the
comprehensive evaluation of the NCA which it is currently undertaking.
The Committee is of the strong view that the tabling of the NCA annual
report as late as December in any year is unacceptable. Unless sound argument
is raised against the proposition during its evaluation inquiry, the Committee
foreshadows that it will be calling for the NCA Act to be appropriately
amended to ensure the tabling of the NCA annual report by 31 October each
year.
Comments by the Inter-Governmental Committee
The current Committee was in existence for only about one month, from
31 May 1996 to 30 June 1996, of the period under review in the NCA report.
While the Committee received a number of briefings in order to bring it
up-to-date on developments over the immediately preceding period, the
comments of the three IGC members provided another perspective of the
NCA's operations during the period.
The IGC consists of representatives of the Commonwealth, State and Territory
Governments and performs a role in relation to the NCA which could be
compared with that of a board of directors. It generally meets twice a
year. In practice, IGC members are the Commonwealth Attorney-General and
all State and Territory ministers with responsibility for policing. The
three letters referred to in paragraph 1 were written by the following
IGC members: the Hon. Stephen Baker MP, South Australian Deputy Premier
and Minister for Police; the Hon. John Beswick MHA, Tasmanian Minister
for Police and Public Safety; and the Hon. Bob Wiese MLA, Western Australian
Minister for Police and Emergency Services.
Mr Baker noted that South Australia Police (SAPOL) is represented on
several NCA Joint Task Forces and that SAPOL officers are involved in
related committees. Mr Baker wrote:
He proceeded to list seven reasons for his concern, such as increased
demands on SAPOL's limited investigative resources and significantly reduced
NCA contributions to Joint Task Force investigations.
Mr Wiese similarly noted the cooperation between jurisdictions which
underpin the achievements of the NCA outlined in its report. He also referred
to the effect of the Government's funding reductions leading to a near
50 per cent cut in staffing in the NCA's Perth office.
While relatively positive about the NCA's achievements in the 1995-96
year, in relation to the funding situation he wrote:
Mr Beswick made only brief comment. He noted that Tasmania Police had
participated in two NCA operations in relation to Outlaw Motorcycle Gangs,
both of which operations were discontinued after the commitment of extensive
physical and financial resources. No charges were laid as a result of
the operations, although information gained will be subjected to further
intelligence analysis.
It is difficult to draw any concrete conclusions on the NCA's performance
in 1995-96 based on these comments. It is unsurprising that States should
express concern about a reduction in spending in their States by the Commonwealth
Government. While they, and this Committee, would wish to see increased
levels of spending on law enforcement by the Commonwealth, the Tasmanian
situation demonstrates that, as is discussed at greater length below,
expenditure on law enforcement should not be evaluated solely in terms
of arrests made.
Performance measurement
The NCA report was the first by Mr John Broome as NCA Chairperson, he
having been appointed to the position in February 1996. In his Chairperson's
report, Mr Broome discussed with commendable frankness the problems and
challenges confronting the organisation some 12 years after its establishment
and in the face of progressively declining budgets. Mr Broome wrote:
There is a need for the NCA to re-emphasise its unique role in the
Australian law enforcement community. I believe our best contribution
to the national effort in law enforcement will be achieved by using
our multi-disciplinary team approach to target organised criminal
activity of national importance, using our special powers... The close
relationships we now enjoy with other law enforcement agencies are
critical to our continued success and to maximising the national response
to organised crime (NCA report, p. 8).
One particular theme addressed by Mr Broome was the difficulty of measuring
the performance of an agency such as the NCA, a matter which has been
the subject of some critical debate in the Parliament over the recent
period. He stressed that the most measurable outcomes do not necessarily
present a complete picture of the agency's performance. He wrote:
While I understand the inevitable public focus on the level of arrests
and charges, there are other measures of success which are equally
relevant, such as the quality of the NCA's relationships with other
agencies, the complexity of the matters successfully investigated
and the disruptive effect NCA operations have on specific areas of
organised crime (NCA report, p. 9).
Despite these reservations, Mr Broome noted that during the 1995-96 year
the NCA charged 120 people with 330 offences, the second highest level
of arrests since the NCA's establishment.
The Committee commented in its December 1996 report Examination of
the Annual report for 1994-95 of the National Crime Authority that
the performance information contained in the NCA's annual reports is not
easily translated into an informed judgement about how efficiently and
effectively the NCA had performed its role.
It took up this theme in its public hearing with the NCA in relation
to the current annual report, particularly in relation to claims of its
relative lack of cost effectiveness. A Committee member noted that, using
the most generous measure of the NCA's arrest rate, the average cost per
arrest was $180,000. Another member noted that, on the basis of the details
of the court results indicated in a schedule to the NCA report, several
of the successful prosecutions led to token fines, some as low as $50.
Mr Broome launched into a spirited defence of the Authority's performance:
First and foremost, through the briefs that we prepare and in cooperation
with the prosecutors, we have a very high success rate of achieving
successful outcomes in terms of prosecutions. It is a success rate
which I think it is fair to say vastly exceeds anything which occurs
in other law enforcement agencies...Secondly, we are dealing by definition
with people who are more difficult to identify, investigate, subsequently
arrest and charge and then prosecute. So I would expect that the average
costs would be high (Evidence, p. 13).
Should we be getting more arrests for the dollar? This is one of
the problems with these kinds of statistics...I think that what is
important is trying to get some qualitative measure of the kind of
work that is being done. Over the last 12 months...we have been involved
in investigating serious criminal behaviour and getting results in
that context. I really do find this sort of arithmetical analysis
to be a fairly unsatisfactory measure of performance (ibid.).
NCA Member, Mr Greg Melick, also referred to what he termed 'the old
Al Capone factor' that, on occasions, a "big player" may only be caught
for a small matter,. He stated:
We know from our intelligence and hearing programs that we have significantly
disrupted some of the organisations that we are investigating, despite
the fact that the arrest resulted in a minor gaol sentence and some
small fines. To my mind, that justifies the cost of the operation
because these people are taking hundreds of millions of dollars out
of the economy each year (Evidence, p. 25).
The Committee drew to the NCA's attention that it can expect criticism
of its cost effectiveness if its performance is not adequately described
in the annual report. Mr Broome pointed to some very real constraints
on what can be included in a published report, which he acknowledged was
a source of frustration to him. For example, the NCA may have arrested
a suspect for, say, a drugs charge, and that suspect is implicated in
a cash flow overseas worth several million dollars. A reasonable person
would, on the balance of probabilities, accept the cash flow to be the
proceeds of crime with associated tax evasion and money laundering. This
"evidence" may not satisfy the criminal standard of proof, however. The
NCA could therefore not publicly claim to have smashed a multi-million
dollar money laundering operation if the people involved had never been
charged or convicted.
At the hearing the Committee suggested how the performance indicator
material in the annual report could be expanded to be more helpful to
the reader, for example in relation to the details given of the nature
of the charges listed in the appendixes. Mr Broome indicated that 'we
can certainly try' (Evidence, p. 27).
Mr Broome wrote in his Chairperson's report that the NCA will be undertaking
a review of its existing performance measures over the coming year. These
revised performance measures will, hopefully, form the basis for more
expansive and meaningful annual reporting in future.
Specific comments on the annual report
The main purpose of this report is to discuss the Committee views on
the adequacy of the NCA report as an accountability document to the Parliament.
It is hoped that the NCA will take the Committee's comments into account
in its preparation of future annual reports. The purpose of this report
is not to consider the adequacy of the NCA's operations in the period
under review, especially as this issue will be examined in detail by the
Committee in the coming months in the context of its comprehensive evaluation
of the NCA.
General format
Annual reports are the key accountability document for Parliament and
the community to review actual outcomes for the past financial year. Because
of their significance, considerable attention has been paid, particularly
by the Joint Committee of Public Accounts and the Senate's Legislative
and General Purpose Committees, to their content.
The NCA report is 130 pages. The 1995-96 annual report of the New South
Wales Crime Commission, an agency comparable to the NCA in function but
of a smaller scale, is 58. Mr Broome told the Committee:
...there are statutory obligations to report on certain material
in the act itself...there is now a raft - and I think that is the
appropriate word to use - of obligations imposed by the parliament
and then by the executive on what information it wants to see in the
annual reports of agencies...None of those, I think it can be fairly
described, is particularly consistent with a racy journalistic style,
because in fact a large part of the document is tables and factual
material of that kind (Evidence, p. 3).
Mr Broome noted that all Commonwealth agencies are faced with producing
a report which meets the rules, rather than reporting in the way that
they would wish to.
The Committee notes that in March 1994 the Joint Committee of Public
Accounts approved revised reporting requirements for departments and those
agencies, such as the NCA, whose operations are on a scale such as those
of departments. These revisions were intended to produce more sharply
focussed reports by significantly reducing the number of detailed requirements
on which departments must report in annual reports.
The Committee noted that the format of the NCA report closely followed
the format used each year since 1992-93, despite its adoption of the March
1994 reforms. In fact the 1992-93 annual report, which had to meet the
former 90 reporting guidelines, was 119 pages in length, compared to the
"streamlined" 1993-94 annual report under the new reporting guidelines
which was three pages shorter.
The Committee recognises that the use of the same format in successive
years may not be a problem in itself, although there is a risk, rebutted
on this occasion by Mr Broome, that slabs of text are repeated from year
to year but with updated statistics included. Conversely, this approach
assists the making of year-on-year comparisons, especially in cases where
longitudinal studies are undertaken.
Mr Broome also admitted that some of the reporting in the annual report
was a 'fairly cryptic description' (Evidence, p. 4) because of the obligation
not to make public certain information. In the Committee's view, such
cryptic references detract from the usefulness of the report.
The Committee urges Mr Broome to consider carefully the options provided
by the current reporting guidelines to produce an annual report for 1996-97
which enhances the Parliament's ability to make informed judgements about
the NCA's performance, while avoiding excessive and extraneous detail.
As stated in the advice to departments from the Department of the Prime
Minister and Cabinet following the March 1994 revisions:
The Committee observes, however, that despite its length, the content
of the NCA report is relatively accessible, with such aids as the provision
of a comprehensive general index, an index to compliance with the reporting
requirements of the Act, and an index to compliance with the 'raft' of
departmental reporting requirements approved by the Joint Committee of
Public Accounts.
Naming
Mr Broome discussed the question of the publication in the NCA's annual
reports of the names of those charged. The Committee also raised with
Mr Broome the related issue of the NCA's practice of issuing a media release
when charges are laid.
He acknowledged the difficulties raised by the issue, saying:
It is all a matter of public record if someone wants to find out.
However, when it is produced in the annual report it is readily accessible
to the press and to others, and it is accessible in a way in which
I would argue is not publication in the sense of something being put
on the public record which was not otherwise there. But it does raise
some questions about whether people should be referred to by name
in that way.
That is something which the authority has done for a number of years
because it believed it was able to provide the committee and indeed
the public generally with more recent information than it would be
able to if it waited for three-year-old court cases to be completed.
We would be in more trouble trying to defend ourselves on the basis
of three-year-old statistics, but there is a real dilemma in that
(Evidence, p. 27).
The Committee concurs with Mr Broome's view in relation to the inclusion
of names in both categories in which they are currently shown in the NCA's
annual report: in the summary of persons charged and in the summary of
court results. Where a named person is, some years later, found not guilty
of those charges, it should be of some comfort to them that this information
will be published in the annual report. The Committee notes with approval
that the Act properly prohibits the identification in the annual report
of persons only suspected of having committed offences or of identifying
persons as having committed offences unless those persons have been convicted
of those offences.
Comprehensiveness
At the risk of lengthening the NCA report, the Committee records its
concern that several matters of interest to it were not adequately addressed
in the report. The Committee noted that the strategic assessment into
organised paedophile activity, a matter of particular interest to the
Committee arising from its inquiry into the topic in 1995, was referred
to only by inference in the Strategic Intelligence section. Also
not mentioned was the conduct by the Auditor-General of a performance
audit on the management by the NCA and others of the investigation and
recovery of the proceeds of crime. While the audit report was not tabled
until 13 December 1996, the audit investigation was conducted between
November 1995 and July 1996. The Auditor-General, of course, performs
a valuable role on the Parliament's behalf to examine and report on the
efficiency, economy and administrative effectiveness of the agencies of
the Commonwealth.
The NCA may have omitted the detail of these topics in its annual report
because of a perception that its primary audience, the IGC, would either
be aware or uninterested in such detail. The Committee simply notes that
the Parliament's interests are different to the IGC's and urges the NCA
to be more conscious of Parliament's areas of interest.
Staffing reporting
The Committee examined the NCA report to seek to determine the manner
in which it had approached the task of rationalisation demanded by its
budgetary situation. For example, the Committee was interested to see
whether operational personnel were dismissed while the senior executive
remained unaffected. While the Committee received some valuable advice
from the NCA about how the budgetary situation was adversely affecting
its operational capacities, advice which the Committee will not deal with
here, some confusion resulted from its attempts to interpet the relevant
statistics contained in the annual report.
Table 5 showed the NCA's Senior Executive Service (SES) as at 30 June
1996 as 15 officers, a decline of two on the figure for the previous year,
although the comparison was not included in the current report. However,
the notes to the financial statements also showed that the number of executive
officers whose fixed annual remuneration exceeded $100,000 had grown from
eight in 1994-95 to the current 15, that fixed remuneration had grown
from $1.25m to $1.95m and that performance pay had increased from $39,695
to $80,926.
Mr Broome stressed that both sets of figures were correct, since they
were measuring different things. The latter figures included the Members
of the Authority, but not all SES officers. The Committee acknowledges
that, if such confusing material is required to be included in annual
reports, the NCA cannot be held responsible.
However, as noted by the Committee in relation to the NCA's reporting
on Equal Employment Opportunity, the absence of prior year figures complicates
the observation of trends and, wherever relevant, the Committee urges
the NCA to include such comparative data.
John Bradford MP
Chairman
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