Chapter 1
Overview
Introduction
1.1
This is the Senate Economics Legislation Committee's (the committee)
second and final report on annual reports in 2012. It provides an overview of
the committee's examination of annual reports for the 2010–11 financial year,
and which were tabled after 31 October 2011.
Terms of reference
1.2
Annual reports of departments and agencies are referred to Senate
Committees under Senate Standing Order 25(20). The Senate Economics Legislation
Committee is responsible for the scrutiny of departments and agencies in the
following portfolios:
-
Industry, Innovation, Science, Research and Tertiary Education;
-
Resources, Energy and Tourism; and
-
Treasury.[1]
1.3
The structures and outcomes for each of these portfolios are summarised
in Appendices 5, 6 and 7, respectively.
1.4
Standing order 25(20)[2]
requires the committee to:
(a)
examine each annual report
referred to it and report to the Senate whether the report is apparently
satisfactory;
(b)
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;
(c)
investigate and report to the
Senate on any lateness in the presentation of annual reports;
(d)
in considering an annual report,
take into account any relevant remarks about the report made in debate in the
Senate;
(e)
if the committee so determines,
consider annual reports of departments and budget-related agencies in
conjunction with examination of estimates;
(f)
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;
(g)
draw to the attention of the
Senate any significant matters relating to the operations and performance of
the bodies furnishing the annual reports; and
(h)
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.
Purpose and requirements of annual reports
1.5
Annual reports provide information on the success (or otherwise) of
departments and agencies in meeting their targets and therefore assist in
ensuring the public accountability of government departments and agencies.
Their tabling in the Parliament, and scrutiny by Senate committees, allows
Parliament to make informed judgments on the executive's performance in
administering government programs.
1.6
The requirements are set down in the following instruments:[3]
-
Departments of State and Executive Agencies present their annual
reports pursuant to sections 63(2) and 70(2) of the Public Service Act 1999,[4]
and the Department of the Prime Minister and Cabinet's Requirements for
Annual Reports for Departments, Executive Agencies and FMA Act Bodies,
revised
8 July 2011.
-
Commonwealth authorities and companies present their annual
reports pursuant to their own enabling legislation and/or sections 9, 36 and 48
of the Commonwealth Authorities and Companies Act 1997 (CAC Act).[5]
-
For non-statutory bodies, the requirements are contained in the
Government response to the report of the Senate Standing Committee on Finance
and Public Administration on Non-statutory bodies, Senate Hansard, 8
December 1987, pp 2643–45.
1.7
The legislation governing the annual reports of various agencies is
shown in Appendices 2, 3 and 4.
1.8
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. 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.
Changes to reporting requirements
1.9
This report also examines the recent requirements approved by the Joint
Committee of Public Accounts and Audit which include an analysis of Key
Performance Indicators (KPIs) and statistics relating to occupational health
and safety issues;[6]
freedom of information requests (up to 30 April 2011);[7]
ecologically sustainable development and environmental performance reporting;[8]
and advertising and market research.[9]
1.10
As part of the recent major reforms to Freedom of Information
legislation, the Information Publication Scheme (IPS) was established. It
commenced on 1 May 2011, replacing the former annual report publication
requirements in section 8 of the FOI Act. For the 2010–11 financial year, the
reports should include both a section 8 statement covering the period from 1
July 2010 to 30 April 2011 inclusive, as well as a statement referring to the
IPS.[10]
1.11
Requirements for Annual Reports for 2010–11 include significant
amendments relating to the Commonwealth Disability Strategy. The specific
requirement for disability reporting in individual annual reports has been
discontinued. To preserve the level of parliamentary scrutiny of disability
issues, each report must now include an explicit and transparent reference to
other disability reporting mechanisms, noting where agency level information
can be found.
A suggested form of words to satisfy the requirement is set out in the PM&C
Requirements for Annual Reports released on July 2011, p. 29.
Reports referred to the committee
1.12
Under Standing Order 25(20)(f), the committee is required to report on
the annual reports of departments and agencies tabled in the Senate between 1
November and 30 April each year by the tenth sitting day after 30 June of that
year. This year that date is 12 September 2012.[11]
1.13
This report examines the annual and financial reports 2010–11 of the
following departments and agencies, which were tabled in the Senate within the
aforementioned timeframe and later:
Government departments
-
Department of the Treasury;
Prescribed agencies under the FMA
Act
-
Australian Competition and Consumer Commission [includes the
Australian Energy Regulator] (independent statutory authority);
-
Australian Office of Financial Management (non-statutory agency);
-
Australian Prudential Regulation Authority;
-
Commissioner of Taxation (ATO) [includes the Development
Allowance Authority] (statutory agency);
-
Corporations and Markets Advisory Committee (statutory agency);
-
Royal Australian Mint (non-statutory agency);
Statutory bodies/authorities
not under the FMA Act
-
Australian Centre for Renewable Energy (ACRE) Board (independent
statutory advisory board);
-
Australian Statistics Advisory Council;
-
Innovation Australia (independent statutory body);
-
Tax Practitioners Board (independent statutory authority);
Non-statutory bodies
-
Foreign Investment Review Board;
Commonwealth authorities (under the
CAC Act)
-
Australian National University (statutory authority);
-
Tourism Australia (statutory authority);
Commonwealth companies (under the
CAC Act)
-
IIF Investments Pty Ltd; and
Other companies, limited by shares
-
Snowy Hydro Limited (statutory corporation).
1.14
Comments on these individual reports are contained in Chapter 2, where
reports are listed in alphabetical order under each portfolio.
Organisational changes
1.15
Due to changes in the machinery of government in December 2011, this report
also contains analysis of one annual report tabled under the Tertiary Education
and Skills portfolio, now the third outcome for the Department of Industry,
Innovation, Science, Research and Tertiary Education (formerly the Department
of Industry, Innovation, Science and Research). This is the Australian National
University's Annual Report 2011, tabled on 20 June 2012. Annual reports
tabled by
31 October 2011 under the Tertiary Education and Skills portfolio were considered
in the Education, Employment and Workplace Relations Committee's report on Annual
reports (No. 1 of 2012).[12]
1.16
The committee notes that the Tertiary Education Quality and Standards
Agency (TEQSA), a prescribed agency under the FMA Act, commenced operation on
31 July 2011. At the time of its establishment the agency was operating under
the Education, Employment and Workplace Relations portfolio, but has since been
transferred to the Industry, Innovation, Science, Research and Tertiary
Education portfolio.
1.17
By the same principle, there is another prescribed agency and statutory
authority formerly within the Education, Employment and Workplace Relations
portfolio which will for the first time be required to report for the financial
year 2011–12 under the Industry, Innovation, Science, Research and Tertiary
Education portfolio. It is the Australian Skills Quality Authority (ASQA),
established on 24 March 2011.
1.18
With the Australian Renewable Energy Agency (Consequential Amendments
and Transitional Provisions) Bill 2011, there was a transfer of responsibility
for existing renewable energy technology projects from RET (including those
projects under the oversight of the ACRE Board) to ARENA, a new agency under
the Resources, Energy and Tourism portfolio established as an independent
statutory authority under the Australian Renewable Energy Agency Act 2011.
ARENA commenced operation on 1 July 2012.
1.19
On 23 August 2012, the Corporations Legislation Amendment (Financial
Reporting Panel) Bill 2012 was passed in the Senate. The legislation disbanded
the Financial Reporting Panel by repealing its functions and powers. The
Panel's annual report for 2010–11 was considered in the committee's report on Annual
reports (No. 1 of 2012) under the Treasury portfolio.
Timeliness
1.20
Standing Order 25(20)(c) requires the committee to report to the Senate
on the late presentation of annual reports.
Departments and FMA Act entities
1.21
Section 4 of the Requirements for Annual Reports states that
annual reports of departments and agencies under the FMA Act framework are to
be presented to each House of Parliament on or before 31 October in the year
the report is given. Furthermore, if Senate Estimates is scheduled to occur
prior to 31 October, it is best practice for annual reports to be tabled prior
to those hearings, as noted in the PM&C Requirements for Annual Reports.
CAC Act entities
1.22
Section 9 of the CAC Act stipulates that the deadline for furnishing the
minister with the annual reports of Commonwealth authorities is the 15th
day of the 4th month after the end of the financial year; that is,
15 October.
1.23
Section 36 of the CAC Act stipulates that Commonwealth companies must
give their annual reports to the responsible minister by the earlier of the
following:
-
four months after the end of the financial year, or
-
21 days before the next annual general meeting of the company
after the end of the financial year.
Other entities
1.24
Entities 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
subsections 34C(2) and 34C(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.
Government policy for all annual
reports
1.25
While the legislative requirements for the tabling of annual reports
vary between different types of agencies,[13]
the Government's policy is 'that all annual reports should be tabled by 31
October'.[14]
1.26
The committee notes that none of the annual reports considered in this
report were tabled in the Senate by 31 October 2011. However, 7 out of the 16
reports considered were tabled in the House of Representatives by 31 October,
and hence have technically met the requirement set down by the government's
policy.
Remarks made in the Senate
1.27
Senate Standing Order 25(20)(d) directs the committee to take into
account remarks made in the Senate when considering annual reports.
1.28
None of the annual reports considered in this report have been the
subject of debate in the Senate.
Bodies not presenting annual reports to the Senate
1.29
The committee is required to report to the Senate each year under
Standing Order 25 (20)(h) on whether there are any bodies not presenting annual
reports to the Senate which should. The committee is satisfied that there are
no such bodies within the Industry, Innovation, Science, Research and Tertiary
Education; Resources, Energy and Tourism; or Treasury portfolios at this time.
Other comments on reports
1.30
Taking into account the reporting guidelines specified by the legislation
under which departments and agencies present their annual reports, the
committee considers that the reports it has examined are generally 'apparently
satisfactory'.
1.31
Despite this, the committee considers that some aspects of agency annual
reports could be improved. One of the things that the committee examines is
whether annual reports contain discussion of external scrutiny and
parliamentary accountability.
External scrutiny and
accountability
1.32
It is required that annual reports:
... must provide information on the most significant
developments in external scrutiny of the department and the department's
response, including particulars of:
(a) judicial decisions and decisions of administrative
tribunals that have had, or may have, a significant impact on the operations of
the department; and
(b) reports on the operations of the department by the
Auditor-General (other than the report on financial statements), a
Parliamentary committee or the Commonwealth Ombudsman.[15]
Compliance indices or lists of
requirements
1.33
The inclusion of a list of requirements in annual reports is mandatory
for all departments and agencies under the FMA Act. For CAC Act and other
agencies,
the committee recommends the inclusion of a compliance index. The index
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. It
can be particularly useful for agencies with reporting requirements under
various Acts.
1.34
The committee commends the majority of agencies for their inclusion of compliance
indices in their 2010–11 annual reports.
1.35
Annual reports should be a primary reference document for
parliamentarians and others looking for information about external scrutiny of
government agencies. As noted above, the primary purpose of annual reports is
accountability to the Parliament – it is therefore important that details about
external scrutiny are included in a clear manner in annual reports. It is
particularly important that details about parliamentary scrutiny are included
in annual reports, including appearances at Senate estimates hearings (which
are the subject of bi-annual reports to the Senate).
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