Chapter 1


Chapter 1

Introduction

1.1        This is the first report on annual reports for 2015 of the Senate Environment and Communications Legislation Committee (the committee). It provides an overview of annual reports of agencies within the allocated portfolios tabled in the Senate between 1 May 2014 and 31 October 2014.

1.2        Annual reports inform the Parliament, stakeholders and other interested parties of the operations and performance of public sector departments, agencies and companies. They are a primary accountability mechanism. Additionally, annual reports are important reference documents and form part of the historical record.[1]

Terms of reference

1.3        Under Standing Order 25(20), the annual reports of certain departments and agencies are referred to the committee for examination and assessment. The committee is required to:

  1. Examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory.
  2. 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.
  3. Investigate and report to the Senate on any lateness in the presentation of annual reports.
  4. In considering an annual report, take into account any relevant remarks about the report made in debate in the Senate.
  5. If the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates.
  6. 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.
  7. Draw the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports.
  8. 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

1.4        In accordance with the resolution of the Senate on 12 November 2013, the committee has oversight of the following portfolios:

  • Environment; and
  • Communications.[2]

Annual reporting requirements

1.5        In 2012–13, Commonwealth departments, agencies, authorities and companies operating under either the Financial Management and Accountability Act 1997 (the FMA Act) or the Commonwealth Authorities and Companies Act 1997 (the CAC Act) were required to provide an annual report on their activities, performance and finances. The Public Governance, Performance and Accountability Act 2013 replaced both the FMA Act and the CAC Act on 1 July 2014. However, the annual reports covered by this report were assessed against the requirements under the former Acts.

1.6        Annual reports must also comply with the Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies (the PM&C Requirements) issued by the Department of the Prime Minister and Cabinet and approved by the Joint Committee of Public Accounts and Audit. These requirements are updated annually. The latest version of the requirements was issued on 29 May 2014 and applies to annual reports for 2013–14.

1.7        Two significant changes were made to the most recent PM&C Requirements, which relate to the reporting of social inclusion indicators and spatial reporting. These two provisions are no longer necessary.[3] The requirements state that the reporting of social inclusion indicators is no longer required due to the disbandment of the Social Inclusion Unit in the Department of Prime Minister and Cabinet.[4] Additionally, the requirement to include spatial reporting has been removed in recognition of the problems that were encountered with the data.[5]

Reports examined

1.8        This report examines the following reports, tabled in the Senate or presented out of session to the President of the Senate and referred to the committee between 1 May 2014 and 31 October 2014:

Departments of state

  • Department of Communications—Annual Report 2013–14; and
  • Department of Environment—Annual Report 2013–14, including reports on the operations of the:
  • Environment Protection and Biodiversity Conservation Act 1999;
  • Natural Heritage Trust of Australia Act 1997;
  • Product Stewardship Act 2011;
  • Product Stewardship (Oil) Act 2000;
  • Fuel Quality Standards Act 2000;
  • Hazardous Waste (Regulation of Exports and Imports) Act 1989;
  • Ozone Protection and Synthetic Greenhouse Gas Management Act 1989;
  • Water Efficiency Labelling and Standards Act 2005; and
  • Water Act 2007.

Statutory agencies/authorities

  • Australian Broadcasting Corporation—Annual Report 2014;
  • Bureau of Meteorology—Annual Report 2013–14;
  • Clean Energy Regulator—Annual Report 2013–14;
  • Climate Change Authority—Annual Report 2013–14;
  • Great Barrier Marine Park Authority—Annual Report 2013–14;
  • National Water Commission—Annual Report 2013–14.
  • Special Broadcasting Service—Annual Report 2013–14; and
  • Supervising Scientist—Annual Report 2013–14.

Commonwealth companies/government business enterprises

  • Australian Postal Corporation (Australia Post)—Annual Report 2013–14;
  • NBN Co Limited—Annual Report 2013–14; and
  • Sydney Harbour Federation Trust—Annual Report 2013–14.

Reports not examined

1.9        The committee is not obliged to report on Acts, statements of corporate intent, surveys, policy papers, budget documents, corporate plans or errata. The following were referred to the committee between 1 May 2014 and 31 October 2014 but are not examined in this report:

  • Australian Competition and Consumer Commission—Telstra's Structural Separation Undertaking Report 2012–13;
  • Australian Postal Corporation (Australia Post)—Diversity and Inclusion Report 2013–14;
  • Australian Postal Corporation (Australia Post)—Statement of Corporate Intent 2014–15 to 2017–18;
  • Broadcasting Services Act 1992—Report on Digital Television Transmission and Reception 11 December 2013 to 31 March 2014;
  • Broadcasting Services Act 1992—Report on Digital Television Transmission Reception 1 April 2014 to 13 June 2014;
  • Department of Communications—Independent Cost-Benefit Analysis of Broadband and Review of Regulation, Volumes I and II;
  • Great Barrier Reef Marine Park Authority—Outlook Report 2014;
  • Interactive Gambling Act 2001—Report on the Operation of Prohibition of Advertisements of Interactive Gambling Services;
  • NBN Co Limited—Corporate Governance Review;
  • NBN Co Limited—Public Policy Processes Independent Audit for the Period of April 2008 to May 2010; and
  • Renewable Energy (Electricity) Act 2000—Renewable Energy Target Scheme Report of the Expert Panel.

Timeliness

1.10      The PM&C Requirements state that an annual report 'is to be presented to each House of the Parliament on or before 31 October in the year in which the report is given'.[6] Organisations reporting under the former Commonwealth Authorities and Companies Act 1997 (the CAC Act) are required to present an annual report to the responsible minister on the fifteenth day of the fourth month after the end of the financial year—that is, by 15 October.

1.11      The committee notes that the annual report of the Murray-Darling Basin Authority (MDBA) did not meet its reporting deadlines. The MDBA Chief Executive, under subsection 214(1) of the Water Act 2007, must as soon as practicable prepare and give to the Minister a report on the authority's operations during that year.[7] The MDBA during the reporting period was a Financial Management Act (FMA) body and the PM&C Requirements also apply. The PM&C Requirements state that, notwithstanding the time frame provided in an agency's own legislation, it is government policy that all annual reports should be tabled by 31 October.[8]

1.12      The letter of transmittal in the report is dated 24 November 2014 and the report was submitted to, and received by the Minister on 25 November 2014. The annual report was presented out-of-session on 16 December 2014 and tabled in the Senate on 9 February 2015.

1.13      The committee is disappointed to note that despite comments in previous annual report reports[9], the MDBA has not provided its annual report in a timelier manner. The MDBA Annual Report 2013–14 will be examined and reported on in the committee's Annual Reports (No. 2 of 2015).

Senate debate

1.14      Under standing order 25(20)(d), the committee is obliged to note any remarks made in the Senate about annual reports. The committee notes that the following reports referred to this committee for examination and report were the subject of comment in the Senate:

  • Climate Change Authority—Report for 2012–13;[10]
  • Director of National Parks—Report for 2012–13;[11]
  • Great Barrier Reef Marine Park Authority—Report for 2012–13;[12] and
  • Wet Tropics Management Authority—Report for 2012–13 and the State of the Wet Tropics Report.[13]

Australian National Audit Office reports

1.15      The Australian National Audit Office (ANAO) conducted audits of the financial statements of Australian Government entities and presented its findings in the report entitled Audits of the Financial Statements of Australian Government Entities for the Period Ended 30 June 2014. There were no new significant or moderate audit issues identified within the Communications and Environment portfolios.[14]

1.16      The ANAO report identified an 'emphasis of matter' in the Low Carbon Australia Limited 2013–14 financial statements. The emphasis of matter related to Low Carbon Australia's preparation of their financial statements, which was not prepared on a 'going concern basis'.[15] Low Carbon Australia is ceasing trading in 2014–15 and its operations are being integrated into the Clean Energy Finance Corporation.[16]

1.17      The ANAO also provided an update regarding the audit issues identified in relation to Australian Postal Corporation Ltd (Australia Post) and NBN Co Ltd in the previous report Audit Report No. 16 2012–13 Audits of the Financial Statements of Australian Government Entities for the Period Ended 30 June 2013.

1.18      Australia Post's audit issues related to privileged user access to the financial management information system as well as the user access management system and monitoring controls. The committee notes that these issues have been resolved and will be subject to ongoing monitoring by Australia Post.[17]

1.19      The ANAO identified NBN Co's IT access controls as a moderate audit issue due to the monitoring of users' access and the approval of new users, which had not been documented appropriately. The ANAO stated that this could have the potential to impact on NBN Co's financial statements. The committee is pleased to note that these issues have been resolved and will be subject to ongoing monitoring by NBN Co.[18]

Apparently satisfactory

1.20      Standing order 25(20)(a) requires that the committee report to the Senate on whether the annual reports of departments and agencies in its portfolios are 'apparently satisfactory'. In making this assessment, the committee considers such aspects as timeliness of presentation and compliance with relevant reporting requirements.

1.21      The committee has examined all annual reports referred during the reporting period and considers that they are apparently satisfactory.

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