Chapter 2Annual report of Commonwealth entities and companies

2.1The committee has selected the 2022–23 annual reports of the following entities for closer examination:

the Australian Sports Foundation (ASF); and

the National Mental Health Commission (NMHC).

Australian Sports Foundation

2.2The ASF’s role is codified in the Australian Sports Commission Act 1989 to raise funds for the development of Australian sport.[1] Since the 1980s, the ASF has distributed close to $700 million to Australian sport clubs, sporting organisations and athletes to ‘develop an inclusive and active sporting nation, and to strengthen local communities’.[2]

2.3The functions of the ASF are also specified in its strategic plan, which encompasses the following key objectives:

creating a thriving community sport sector through online fundraising and capability building, using new technologies, tools and resources to facilitate increased donations in support of community sports clubs and athletes;

connecting sport with philanthropy to access new funding for community sports projects or grant programs;

partnering with Governments to grow philanthropy’s role in sports funding; and

growing sport as a philanthropic cause by making Amateur Sport a charitable purpose, and through effective advocacy and impact reporting.[3]

Directors’ report

2.4There are five directors within the ASF, and they have presented a consolidated financial report of the ASF and controlled entities for the year ended 30 June 2023 and the auditors’ report thereon.[4]

2.5The directors reported that the effects of the COVID-19 pandemic, particularly its impact on economic activities, in conjunction with an increasingly volatile geopolitical environment and climate change, continues to affect communities and sports facilities in Australia.[5]

2.6The Board and Management of the ASF believe that the uncertain economic and geopolitical conditions will present opportunities for growth, including:

a greater need for fundraising, and the support offered by the ASF, among community sports clubs;

a greater need to support elite athletes and those on pathways and to encourage funding into sports in the lead up to Australia’s cluster of world sporting events including the Olympics and Paralympics in Brisbane 2032 and ensuring that a participation halo occurs in communities;

a greater awareness among the philanthropic and broader community of the important role of community sport in promoting physical and mental health, and helping our communities recover from the challenges of the pandemic;

a greater need for revenue diversification among national and elite-level sports, given pressures on traditional income streams such as sponsorship etc; and

a greater need for communities to replace lost or damaged equipment and infrastructure caused by natural disasters.[6]

2.7The directors, however, stated that philanthropic giving is discretionary spending and previous recessions and economic downturns have led to a marked decline in philanthropic giving.[7]

2.8Despite the challenging economic backdrop, the directors have designed the strategic plan to focus on the following key areas:

enhancing the financial sustainability of key sports by partnering with them to increase fundraising effectiveness;

creating a thriving community sport sector through online fundraising and capability building, using tools and resources to increase fundraising activation rates among community clubs;

connecting sport with philanthropy to access new funding for community sports projects or grant programs;

partnering with Governments to grow philanthropy’s role in sports funding;

implementing new technologies to enhance operational efficiencies to support the targeted increase in scale; and

growing sport as a philanthropic cause by making Amateur Sport a charitable purpose, and through effective advocacy and impact reporting.[8]

Performance reporting

2.9As noted above, the ASF’s purpose is as follows: ‘to raise money for the development of Australian sport’.[9] Its mission and associated performance measures include:

driving a substantial growth in the value and volume of philanthropic contributions to sport;

expanding the number of community sports clubs and aspiring athletes receiving our support; and

improving the financial sustainability of Australian sporting organisations and reducing their reliance on Government funding.[10]

2.10Following the establishment of the Charitable Fund, the ASF noted that investments have been made in resources and infrastructure to facilitate growth in philanthropic contributions to Australian sport.[11] As such, during the four years to 2027, the ASF referenced five distinct key performance indicators (KPIs) to measure its performance objectives, and sets out various growth targets:[12]

Source: Australian Sports Foundation, Corporate Plan 2023–2027, p. 9.

2.11The ASF stated that these figures assume that additional investment will be received from the government to enable the proposed capacity and capability enhancements to be made.[13]

2.12The committee notes that in its 2022–23 annual report, the ASF did not reference its KPIs and growth targets, thus referring the reader to its corporate plan to gain further clarity on performance objectives. The annual report also outlines the ASFs projected targets from 2024–27; however, it did not mention whether or not current performance objectives have been met in the current financial year and the years preceding.

2.13In its future annual reports, the committee looks forward to the ASF shedding light on its performance results in relation to the above-mentioned KPIs.

Financial reporting

2.14In 2022–23, the ASF’s net cost of services expenses totalled $83 million and generated own-sourced income amounting to $80 million, with both figures increasing from the previous reporting period.[14] Much of the ASF’s own-source revenue stemmed from the following:

net donations – $75.9 million

retained donations – $4 million;

interest (deposits) – $72 948;

other grants – $11 875;

sponsorships – $10 838; and

other revenue – $1 300.[15]

2.15The ASF reported a total comprehensive income deficit of $3 million, compared to $120 676 in the previous year.[16]

2.16The ASF’s total assets were valued at $23.1 million and liabilities at $17.2 million.[17] Significant expenses comprised of the following payables and provisions:

grants payable – $16.3 million;

suppliers – $417 069;

employee benefits payable - $145 267;

lease liabilities – $38 402;

FBT payable – $10 831;

employee provisions – $222 409; and

provision for donation refunds – $94 367.[18]

2.17The committee deems the ASF’s 2022–23 annual report to be apparently satisfactory.

National Mental Health Commission

2.18The National Mental Health Commission (NMHC) is an executive agency under the Public Service Act 1999 and a non-corporate Commonwealth Entity under the Public Governance, Performance and Accountability Act 2013 (PGPA Act).[19] The Chief Executive Officer (CEO) is the accountable authority under the PGPA Act and is responsible for the governance and performance of the Commission.[20] The National Suicide Prevention Office (NSPO) is a specialist office established within the NMHC to lead a national approach to suicide prevention in Australia.[21]

Review by the Chief Executive Officer

2.19The Acting CEO, Mr Paul McCormack, reported on the NMHC’s key areas of work for 2022–23, which included:

the commencement of the public beta phase of the new Mentally Health Workplace Digital Platform, developed under the National Workplace Initiative to help organisations build mentally healthy workplaces;

the publication of its final progress report against the Fifth National Mental Health and Suicide Prevention Plan, ‘Progress Report Four’;

the release of its companion guides to support the implementation of the National Lived Experience Workforce Development Guidelines, assisting agencies and organisations who design, deliver and commission mental health services;

the establishment of the NSPO to support the design of a national, whole of government approach to reducing suicide in Australia; and

the establishment of the NSPO Advisory Board and the Lived Experience Partnership Group to help inform and enhance the NSPO.[22]

Performance reporting

2.20The NMHC’s purpose, defined by its Portfolio Budget Statements Outcome, is as follows:

Provide expert advice to the Australian Government and cross-sectoral leadership on the policy, programs, services and systems that support mental health in Australia, including through administering the Annual National Report Card on Mental Health and Suicide Prevention, undertaking performance monitoring and reporting, and engaging consumers and carers.[23]

2.21The NMHC utilises five key activities, as set out in its corporate plan 2022–26, to measure its performance:

(1)mental health and suicide prevention system performance and reform;

(2)provide advice to the Australian Government on mental health and suicide prevention;

(3)shaping the future - strategic reform and catalyst for change;

(4)collaboration and engagement; and

(5)National Suicide Prevention Office.[24]

2.22Further, each of these five key activities also encompasses a number different criterion, of there are 13 in total. A summary of these results is as follows:

Source: National Mental Health Commission, Annual Report 2022–23, pp. 10–16.

2.23The committee appreciates the NMHC’s detailed explanation of its performance output against its five key activities.

Financial reporting

2.24During 2022–23, the NMHC actual expenses totalled $17.8 million and generated own-sourced revenue amounting to $513 000.[25] The NMHC’s total expenditure increased from the previous reporting period, and was distributed across the following sources:

employee benefits – $8.8 million;

suppliers – $7.8 million;

depreciation and amortisation – $1.2 million;

finance costs – $33 725;

other expenses – $13 194; and

loss on disposal of asset – $3 505.[26]

2.25Additionally, the NMHC received $11 million in revenue from the government and recorded a departmental operating loss (deficit) of $6.2 million on continuing operations, before the adjustment for unfunded depreciation.[27] Moreover, when unfunded depreciation is removed, the NMHC’s net cash operating loss reduced to $5.9 million.[28]

2.26The NMHC’s total assets, administered on behalf of the government, were valued at $85 829 and net liabilities at $385 000.[29]

2.27The committee appreciates the NMHC’s detailed financial statements and analysis of its methodologies.

Consultants and exempt contracts

2.28During 2022–23, three new consultancy contracts were awarded, involving total expenditure of $1 million (GST inclusive).[30] Additionally, three reportable ongoing consultancy contracts were active during the period, amounting to $147 000 (GST inclusive).[31]

2.2943 new reportable non-consultancy contracts were entered into, costing a total of $3.2 million (GST inclusive).[32] Further, 57 reportable ongoing non-consultancy contracts were active during the period, involving total expenditure of $5.2 million (GST inclusive).[33]

Compliance index

2.30The committee wishes to draw the NMHC’s attention to Schedule 2, Section 17AH(1)(d), which requires a website reference to where the entity’s Information Publication Scheme statement pursuant to Part II of the Freedom of Information Act (FOI Act) can be found. The committee notes that the NMHC did not provide a direct link to this material, only to its main webpage, and therefore encourages the NMHC to ensure that a direct website link is included in its future annual reports.

Apparently satisfactory

2.31As noted in Chapter 1, the committee has assessed all reports of both the Health and Aged Care and Social Services portfolios received between 1 November 2023 and 30 April 2024 as apparently satisfactory.

Senator Marielle Smith

Chair

Footnotes

[1]Australian Sports Foundation, Corporate Plan 2023–2027, p. 4.

[2]Australian Sports Foundation, Corporate Plan 2023–2027, p. 4.

[3]Australian Sports Foundation, Corporate Plan 2023–2027, p. 13.

[4]Australian Sports Foundation, Annual Report 2022–23, p. 8.

[5]Australian Sports Foundation, Annual Report 2022–23, p. 14.

[6]Australian Sports Foundation, Annual Report 2022–23, p. 14.

[7]Australian Sports Foundation, Annual Report 2022–23, p. 14.

[8]Australian Sports Foundation, Annual Report 2022–23, p. 14.

[9]Australian Sports Foundation, Corporate Plan 2023–2027, p. 4.

[10]Australian Sports Foundation, Annual Report 2022–23, p. 13.

[11]Australian Sports Foundation, Corporate Plan 2023–2027, p. 9.

[12]Australian Sports Foundation, Corporate Plan 2023–2027, p. 9.

[13]Australian Sports Foundation, Corporate Plan 2023–2027, p. 9.

[14]Australian Sports Foundation, Annual Report 2022–23, p. 22.

[15]Australian Sports Foundation, Annual Report 2022–23, p. 22.

[16]Australian Sports Foundation, Annual Report 2022–23, p. 22.

[17]Australian Sports Foundation, Annual Report 2022–23, p. 23.

[18]Australian Sports Foundation, Annual Report 2022–23, p. 23.

[19]National Mental Health Commission, Annual Report 2022–23, p. 5.

[20]National Mental Health Commission, Annual Report 2022–23, p. 5.

[21]National Mental Health Commission, Annual Report 2022–23, p. 5.

[22]National Mental Health Commission, Annual Report 2022–23, p. 2.

[23]National Mental Health Commission, Annual Report 2022–23, p. 5.

[24]National Mental Health Commission, Annual Report 2022–23, pp. 10–16; National Mental Health Commission, Corporate Plan 2022–26, pp. 5–6.

[25]National Mental Health Commission, Annual Report 2022–23, p. 62.

[26]National Mental Health Commission, Annual Report 2022–23, p. 62.

[27]National Mental Health Commission, Annual Report 2022–23, p. 62.

[28]National Mental Health Commission, Annual Report 2022–23, p. 53.

[29]National Mental Health Commission, Annual Report 2022–23, p. 67.

[30]National Mental Health Commission, Annual Report 2022–23, p. 55.

[31]National Mental Health Commission, Annual Report 2022–23, p. 55.

[32]National Mental Health Commission, Annual Report 2022–23, p. 56.

[33]National Mental Health Commission, Annual Report 2022–23, p. 56.