Introduction
1.1
This is the Senate Education and Employment Legislation Committee's (the
committee) second report on annual reports for 2017. It provides an overview of
the committee's examination of annual reports for the 2015-16 financial year.
Terms of Reference
1.2
This report was prepared pursuant to Senate Standing Order 25(20)
relating to the consideration of annual reports by committees, which states:
Annual reports of
departments and agencies shall stand referred to the legislation committees in
accordance with an allocation of departments and agencies in a resolution of
the Senate. Each committee shall:
-
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.
-
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.
Allocated portfolios
1.3
In accordance with the resolution of the Senate on 31 August 2016 the
committee has oversight of the following portfolios:
-
Education and Training; and
-
Employment.[1]
Role of annual reports
1.4
Annual reports place information about government departments and
agencies on the public record in relation to the performance, activities,
management and financial position of the reporting body. They are a primary
accountability mechanism and assist the Parliament in the effective examination
of the performance of departments and agencies, and the administration of
government programs.
Annual reporting requirements
1.5
The annual reporting requirements of departments and agencies have a defined
legislative framework.
1.6
On 1 July 2014, the Public Governance, Performance and Accountability
Act 2013 (PGPA Act) replaced the Financial Management and Accountability
Act 1997 (FMA Act) and the Commonwealth Authorities and Companies Act
1997 (CAC Act). The PGPA Act consolidated the governance, performance and
accountability requirements previously contained in the FMA Act and the CAC
Act.
1.7
The PGPA Act establishes a performance reporting framework for all
Commonwealth entities and companies. Section 39 of the PGPA Act requires all
Commonwealth entities to prepare an annual performance statement and include
those statements in their annual reports. Entities use the annual performance
statements to report on the results achieved against the targets, goals and
measures established at the beginning of a reporting year in its corporate
plan.
1.8
The Public Governance, Performance and Accountability Rule 2014 (PGPA
Rule 2014), established under the PGPA Act, details the requirements for the
corporate plan, annual performance statements as well as the guidelines for
annual reports.[2]
1.9
A range of PGPA Act bodies provide annual reports which are referred to committees
for examination.
PGPA Act bodies
1.10
The PGPA Act categorises bodies as a Commonwealth entity (either a non‑corporate
Commonwealth entity or a corporate Commonwealth entity), or a Commonwealth
company, as detailed below:
-
Non-corporate Commonwealth entity—an entity that is legally and
financially part of the Commonwealth, and includes departments of state,
parliamentary departments, statutory authorities, and listed entities (a body,
person, group of persons or organisation that is prescribed by rules made under
the PGPA Act).
-
Corporate Commonwealth entity—a body corporate that has a
separate legal personality from the Commonwealth, and includes certain statutory
authorities. It can act in its own right exercising certain legal rights such
as entering into contracts and owning property.
-
Commonwealth company—a company established by the Commonwealth
under the Corporations Act 2001 that is controlled by the Commonwealth.
Changes to reporting requirements
1.11
Prior to the passage of the PGPA Act, annual reporting requirements of
the various bodies were governed by the FMA Act and the CAC Act. In
addition, the annual reports of non-corporate Commonwealth entities were
prepared in accordance with the Requirements for Annual Reports, which
were reviewed annually by the Department of the Prime Minister and Cabinet
(PM&C) and approved by the Joint Committee of Public Accounts and Audit
(JCPAA).
1.12
Major changes to the Requirements for Annual Reports were
anticipated for the 2014-15 annual reports following the commencement of the
PGPA Act, but this was delayed until 2015-16.[3]
However, transitional requirements came into effect for the 2014-15 period to
reflect the passage of the PGPA Act. Sections 7AB and 7AC of the Public
Governance Performance and Accountability (Consequential and Transitional
Provisions) Rule 2014 continued the application of the Commonwealth Authorities
(Annual Reporting) Orders 2011 and the Commonwealth Companies (Annual
Reporting) Orders 2011 to annual reports for relevant entities for the 2014-15
reporting period.[4]
1.13
Commencing in the 2015-16 period, annual reporting requirements for non‑corporate
and corporate Commonwealth entities are set out in section 46 of the PGPA Act,
including that annual reports must comply with any requirements prescribed by
the rules. Section 97 prescribes the annual reporting requirements for
Commonwealth companies. The document Requirements for Annual Reports has
been replaced by the PGPA Rule 2014.
1.14
Below is a summary of the instruments under which the 2015-16 annual
reports were prepared:
Non-corporate Commonwealth
entities:
-
PGPA Act, section 46 and the PGPA Rule 2014, Division 3A(A);
-
for portfolio departments and executive agencies, the Public
Service Act 1999, subsections 63(2) and 70(2); for parliamentary
departments, the Parliamentary Service Act 1999, section 65; and
-
for statutory bodies, relevant enabling legislation.
Corporate Commonwealth entities:
-
PGPA Act, section 46 and the PGPA Rule 2014, Division 3A(B); and
-
for statutory bodies, relevant enabling legislation.
Commonwealth companies:
-
PGPA Act, section 97, which also refers to requirements under the
Corporations Act 2001 and the PGPA Rule 2014, Part 3-3; and
-
for statutory bodies, relevant enabling legislation.
Annual reports referred
1.15
In accordance with Senate Standing Order 25(20)(f) this report examines
those annual reports tabled between 1 November 2016 and 30 April 2017. The
committee examined the following report:
Non-corporate entities:
-
Workplace Gender Equality Agency.
1.16
During the aforementioned period, the committee received two quarterly
reports from the Australian Building and Construction Commission (ABCC). The
ABCC commenced operations on 2 December 2016. As this was after the conclusion
of the reporting period, the ABCC was not required to produce an annual report
for 2015-16. The committee has therefore decided to analyse the ABCC quarterly
reports in lieu of an annual report.
Reports not examined
1.17
The committee is not obliged to report on Acts, statements of corporate
intent, surveys, policy papers, budget documents, corporate plans or errata.
Accordingly, the following documents were referred to the committee but are not
examined in this report:
-
Safe Work Australia Act 2008—Review of Safe Work
Australia's role and functions;
-
Workplace Gender Equality Act 2012—Workplace Gender
Equality Agency—Progress report for the period 2014 to 2016;
-
Australian Small Business and Family Enterprise Ombudsman—Inquiry
into the effect of the Road Safety Remuneration Tribunal's Payments Order on
Australian small businesses—Australian Government response—Report;
-
Education and Care Service Ombudsman, National Education and Care
Services FOI & Privacy Commissioners—Annual Report 2013-14;
-
Education and Care Service Ombudsman, National Education and Care
Services FOI & Privacy Commissioners—Annual Report 2014-15;
-
Education and Care Service Ombudsman, National Education and Care
Services FOI & Privacy Commissioners—Annual Report 2015-16.
Method of assessment
1.18
Senate Standing Order 25(20) requires the committee to examine the
annual reports referred to it to determine whether they are timely and
'apparently satisfactory'. In making this assessment, the committee considers
whether the reports comply with the relevant legislation and requirements for
the preparation of annual reports.
Timeliness
Presentation to ministers
1.19
Section 46 of the PGPA Act requires Commonwealth entities, both
corporate and non-corporate, to prepare an annual report and provide it to the
responsible Minister by the 15th day of the fourth month after the
end of the reporting period, which translates as 15 October. Certain agencies,
however, have a specific date stipulated in their enabling legislation. For
example, the Workplace Gender Equality Agency's (WGEA) legislation stipulates that
an annual report must be prepared by the last day of the fifth month after the end
of the period, which translates as 31 October.[5]
1.20
For Commonwealth companies, the deadline for providing the report to the
responsible minister is stipulated under section 97 of the PGPA Act, namely,
four months after the end of the company's reporting period.
1.21
The annual reports of corporate and non-corporate entities were
presented to relevant ministers in a timely manner except for the Australian
Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS). This was
noted in the committee's first Report on Annual Reports of 2017.[6]
1.22
As stated previously, the ABCC commenced operations on 2 December 2016.
As this was after the 2015-16 reporting period, the ABCC did not present the Employment
Minister with an annual report covering this reporting period.
Tabling in Parliament
1.23
Formerly, annual reports of non-corporate entities are to be presented
by the responsible Minister to each House of Parliament on or before 31 October
each year.[7]
The PGPA Rule 2014, however, is silent on this matter and as a consequence there
is no longer an explicit stipulation for this to occur. Instead, it is now
recommended that such reports be tabled before Supplementary Budget Estimates.[8]
1.24
While the transitional provisions were in effect for the 2014-15
reporting period, there was a lack of clarity surrounding the timeframe for the
presentation to the Parliament of the annual reports of corporate entities.[9]
As explained below, it is now clearer under the operation of the PGPA Rule 2014.
1.25
The PGPA Rule states that annual reports for corporate Commonwealth entities,
non-corporate Commonwealth entities and Commonwealth companies must comply with
the Guidelines for the Presentation of Documents to the Parliament which
is prepared by the Department of the Prime Minister and Cabinet.[10]
1.26
The guidelines advise that for all Commonwealth entities:
As per past practice, it is expected that the responsible
Minister will present the report to each House of Parliament on or before 31
October. If Senate Supplementary Budget Estimates hearings are scheduled to
occur prior to 31 October, it is best practice for annual reports to be tabled
prior to those hearings. This ensures that annual reports are available for
scrutiny by the relevant Senate standing committee.[11]
1.27
The committee notes that the next Supplementary Budget Estimates
hearings commence on 23 October 2017 and expects that all relevant annual
reports be tabled prior to this date.
1.28
For Commonwealth companies, subsection 97(5) of the PGPA Act states that
the Minister must table the reports as soon as practicable after receiving
them.[12]
This provision is clarified in the Guidelines for the Presentation of
Documents to the Parliament which sets out the expectation that reports
will be tabled on or before 31 October or sooner if Senate Supplementary
Budget Estimates hearings are scheduled prior to 31 October.[13]
1.29
In this regard the committee notes that the Joint Committee on Public
Accounts and Audit (JCPAA) has considered formally bringing the tabling date
forward:
...the [JCPAA] Committee believes that bringing forward both of
these dates [presentation to ministers and tabling in Parliament], and
formalising the required tabling date in legislation, is both viable and
valuable. If achieved, it will provide some certainty to Senate Estimates
Committees in particular that the important performance information in annual
reports will be made available in a timely manner to assist scrutiny.[14]
1.30
As was noted in the first Report on Annual Reports of 2017 many bodies
did not meet the recommended timeframe for tabling annual reports in Parliament
prior to the 2016 Supplementary Budget Estimates.[15]
Despite the clear guidance contained within the Guidelines for the Presentation
of Documents to the Parliament the only bodies that tabled reports in both
Houses before this period were the Australian National University and the
Department of Employment.
1.31
In the case of reports examined here, the WGEA submitted by its
deadline, but the report was not tabled until 30 November 2016, more than one
month after the Supplementary hearing.
1.32
The committee reminds all entities and companies that it is best
practice for annual reports to be tabled prior to Supplementary Budget
Estimates. As stated earlier for the 2016-17 reporting period, this commences
on 23 October 2017.
1.33
Appendix 1 lists the annual reports which were presented to Parliament
between 1 November 2016 and 30 April 2017 and referred to the committee, with
relevant tabling dates.
Senate debate
1.34
Senate Standing Order 25(20) requires the committee to take into account
any relevant remarks about the reports made in debate in the Senate. The
Committee notes that none of the annual reports examined in this report have
been the subject of comments or debate in the Senate.
Bodies not presenting annual reports to the Senate
1.35
The committee is required to report to the Senate on whether there are
any bodies which should have presented an annual report to the Senate but did
not. The committee is satisfied that there are no such bodies at this time.
General comments on reports
1.36
The reports presented met all the requirements under the PGPA Rule 2014
relating to the letter of transmittal, inclusion of audit reports, style and
formatting, and assessment of performance against targets.[16]
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