Finance and Public Administration Legislation Committee
Report on 1997-98 Annual Reports: Report Two
Table of Contents
Chapter 3 – Specific issues
Introduction
The committee was generally impressed with the standard of reporting
across the board. Reports are becoming more informative, more structured
so that specific information is easy to find and, in some cases at least,
show that the reporting agency is developing indicators to help it assess
how well it is achieving its objectives. The presentational stardards
of the reports are generally high, with the Council for Aboriginal Reconciliation,
the Torres Strait Regional Authority and Aboriginal Hostels reports being
particularly attractive. Most agencies too are to be commended for their
frankness in reporting, although not necessarily on all issues. The ATSIC
chairman, for example, reported in a straightforward manner of his difficulties
in dealing with the minister; the chairman of the TSRA reported on `constructive
dialogues' with both federal and state governments; internal and external
reviews were acknowledged and follow-up action reported; and the NLC reported
candidly on the results of activities of its pastoral unit. The ATSIC
Office of Evaluation and Audit, whose annual report is sensibly included
with that of ATSIC, is a model of unbiased, clearly thought-through reporting.
The reports of the land councils in general caused the committee to reflect
on a number of issues associated with annual reporting. The NLC provided
background history to 1966 and the Wave Hill wages strike. While an amount
of scene-setting is useful, the committee believes that an annual report
should concentrate its attention on the year in review. The larger land
councils too seem to see their annual reports more as a vehicle to address
their constituents than an account of their achievements to Parliament,
while the smaller ones have, understandably at this stage of their development,
not moved past the stage of recounting with pride their achievements.
Performance information
Reporting on performance is a key element of an annual report and the
committee expects agencies to provide full and frank performance information,
even when that performance has perhaps been less than optimum. In the
accrual budgeting framework there will be direct linkages between the
annual report and other budget documentation and explicit performance
information as specified in the previous portfolio budget statement will
be required, comparing actual performance with the planned outcomes.
The reports examined on this occasion varied enormously in their coverage
of performance. Most agencies continued to focus on activity indicators
and while several of the reports were neatly and logically structured,
what they reported under the rubric of `performance information' or `outcomes'
was activity. We had x numbers of people engaged in this program, or we
loaned y dollars. Trend information showing variations over two or three
years in the uptake of schemes is useful and should be presented, but
it should not be confused with outcome information as it does not assist
parliamentarians to assess whether the scheme is having the desired effect
of, for example, acquiring and developing commercially viable businesses.
ATSIC included a brief commentary on its approach to performance reporting
which highlighted the difficulties associated with isolating outcomes
from ATSIC expenditure in cases where other agencies have major responsibilities.
[1] This indeed is a very real problem. It is, however,
more of a problem of knowing where to attribute praise or blame –
the outcome will be known, merely how to attribute causality may be unclear.
ATSIC's CDEP has received much attention over the years – as the
Office of Evaluation and Audit wryly commented, `the extensive scrutiny
of the program in recent years has proved to be onerous' [2]
– and on this occasion has produced useful tables of five-year progress
in participation rates, comparative tables of planned and actual income-generating
activities and a recognition that `transfer to mainstream employment is
now enshrined in the new CDEP objective'. [3]
The committee looks forward to reading reporting against this objective,
when possible.
The AHL report was overall a high quality document which presented clear,
well thought out objectives and included a summary of what it rightly
recognised were major activities against those four objectives. Both quantitative
and qualitative activity indicators were included, along with comparisons
for the previous year in some cases, and were addressed in the discussion
that followed. The committee was impressed with the company's frank reporting
of investigations of suspected fraud and of the ANAO review of the operations
of the internal audit unit. [4]
The Commercial Development Corporation provided a brief general summary
of investment performance for each investment project. In its review of
operations, the CDC stated that, as required by its legislation, it would
only invest in businesses assessed as being, or likely to be, commercially
viable. The test of commercial viability included the projected rate of
return on investment and the capacity of the venture to provide a reasonable
rate of return to the CDC. Yet in the body of the report, few specifics
were provided. The Chairman's report included the statement, `The CDC
met all of the 12 key target areas it set for itself in 1997/98' [5]
but the supporting evidence on pages 56-58 was generalised narrative.
Returns to the CDC on individual investments were disclosed in the notes
to the financial statements, showing that 11 investments contributed to
the operating result of the CDC while 11 registered net losses. Much useful
trend information on business successes could have been included in the
body of the report.
The AIATSIS annual report presented a succinct account of its activities
for the year under review, an account which received commendation in the
Senate chamber by Senator Crossin:
this report highlights that here we have an institute managed by Aboriginal
people that conducts some very high quality research and that puts out
some very high quality statements about issues affecting this country
in terms of reconciliation and interaction with what is happening in our
community and Aboriginal issues. [6]
The Institute did not appear to set performance targets and curiously,
although it possesses a detailed and informative web site, did not include
its annual report on it, though much of the content, such as publication
lists, was available on line. As Internet usage becomes more the norm,
some rationalisation of information or linkages between the two forms
of communication will doubtless be achieved.
In its annual report the Council for Aboriginal Reconciliation recounts
at some length activities designed to progess the reconciliation process.
The committee accepts that achievement markers for reconciliation are
hard to pin down and considers the Council has made a valiant, if subjective,
assessment of its progress.
The committee accepts that it is a natural tendency on the part of any
agency to want to report itself in the best possible light. Reports, however,
are or should be accountability documents. The elected representatives
of the shareholders – the taxpayers of Australia - have a right to
know what went wrong and why, as well as what was achieved. The committee
commends bodies that are frank in reporting outcomes and do not gloss
over deficiencies. In some instances the problems may be external factors
beyond the control of the organisation. The committee commends the report
of the Indigenous Land Corporation which included a section entitled `Operational
problems and challenges' covering the areas of land needs planning, expectations
or property vendors, obstacles to purchasing certain land in Queensland,
divestment of title and land management. It was a detailed and useful
summary, highlighting problems and outlining proposed strategies to address
these operational problem areas. [The committee makes no further comment
on the ILC report as the Joint Statutory Committee on Native Title has
the responsibility under its legislation to report on it.]
The Remuneration Tribunal, whose report the committee reviews for the
first time following that agency's transfer on 18 February 1998 to the
Finance and Administration portfolio, makes no attempt to assess it own
performance. Its modest seven pages do, however, cover the requisite membership
information, powers of the Tribunal, an overview of major determinations,
support service details and publications, including a web address for
determinations. As a purely practical measure, should the Tribunal again
find it has three blank pages available at the back of its report, rather
than wasting them, a list of the year's determinations might be helpful.
The modest report of the Australian Political Exchange Council comes
closer to assessing the impact of its programs. The committee read with
interest Appendix B, which lists by name and current position the former
delegates who `have achieved greater prominence in political life since
their participation'. By the committee's calculation, they represent 30
per cent of participants.
Availability on the Internet
The committee continues to monitor the availability of annual reports
on the Internet as it sees efficient access to information on the operations
and achievements or otherwise of public sector agencies as greatly enhancing
accountability.
Six of the 17 annual reports examined were found to be available on the
Internet. They included the following: ATSIC, AHL, CLC, CAR, ILC and TSRA.
This is a smaller proportion compared to previous surveys by the committee.
A number of the reports examined, however, were from modestly sized and
modestly resourced agencies while others were non-mainstream reports such
as a report on the operations of an act and the report of a body now abolished.
Therefore the committee was not discouraged with the result and noted
a number of agencies not currently on the Internet reporting on plans
to increase their use of information technology and to develop web sites.
Where reports were available on line, the committee considered how easy
they were to find and to use. It was pleasing to find that all the reports
available on the Internet were easily located on the organisations' homepages
with well-designed sites. The annual reports were located in the following
web site hierarchies:
ATSIC: Homepage, about ATSIC, annual report 1997-98, or previous years
AHL: Homepage, annual report
CLC: Homepage, annual report
CAR: Homepage, council library, annual reports, 1997-98
ILC: Homepage, documents, 1997-98 annual report
TSRA: Homepage, publications, annual report
The TSRA included useful notes on using and downloading the document.
Some sites however did not make all sections of the report available.
The committee noted that not all agencies whose reports were available
on the Internet made reference to this fact, with the relevant address,
in the hard copy of the report. While some reports made general reference
to publications being available on their web sites, ATSIC provided this
information clearly and prominently on the second page of the report with
other contact information.
The use of the Internet by government agencies in making various publications
and corporate documents widely available is still in its early stages.
The committee is encouraged with what agencies are doing and will continue
to monitor not only availability but also the way the material is presented,
where it is located, how easy it is to move through the document and what
search facilities are available.
Timeliness
Due to the timing of the federal election and the delay in opening of
the new parliament until November, all annual reports required to be tabled
by the end of October 1998 were technically tabled late; however most
reports in this category were presented to the President of the Senate
out of session and therefore available for parliamentary and public scrutiny.
Land Councils are required by their enabling legislation `to prepare and
furnish to the Minister a report on the operations of the Council as soon
as practicable after the end of the financial year'. [7]
Because no more specific provisions relating to the timing of reporting
were then in place, the provisions of section 34C of the Acts Interpretation
Act 1901 presumably apply, providing for reporting within six months
of the end of the reporting period. The reports of the Central, Northern
and Tiwi Land Councils were apparently received by the minister after
the six month period, [8] that is, on 12 January
1999, but were tabled within 15 sitting days by the minister. The committee
appreciates the constraints of distance with which these bodies have to
work in coordinating and finalising reports and also the closing down
of offices around the Christmas/New Year period which both may have contributed
to their reports apparently being submitted and received late by the minister.
The CAC Act, under whose terms the reports will be required for the next
financial year, should ensure more timely reporting.
Consultancies
ATSIC provided totals only for numbers of consultancies and their dollar
cost. [9] Both the ILC and TSRA provided lists
of consultants used, including information on the consultants' names,
nature of services provided and dollar amount. Other reports made reference
in the body of the report to consultants used but a list or consolidated
figure for the year under review could not be located. While reporting
on the use of consultants is only at present a requirement for FMA Act
agencies, and could be regarded as `input' information with which Parliament
should not overly concern itself, the committee considers this to be one
of the areas in which transparency is genuinely required, particularly
in the case of consultancies of a high dollar value.
Financial statements
The audited financial statements of all reports examined were unqualified.
It was pleasing to see the Central Land Council financial statements were
unqualified this year as the committee has noted an auditor's qualification
for the past several years. On scrutinising the notes to the accounts,
which were for the most part detailed and useful, the committee was surprised
at occasional vagueness: `executive members meet about 8 times a year'
and `The Superannuation Guarantee Contribution is paid where appropriate'.
Service charters
All government departments and agencies that deal with the public are
required to develop service charters as part of the government's More
Time for Business initiative. Most charters were expected to be developed
and in place by 30 June 1998. The committee has monitored the development
of charters in relevant agencies in 1997-98 through their annual reports.
Next year's annual reports will require more extensive reporting, covering
the implementation of the charter over the previous 12 month period, including
the extent to which service standards listed have been met. The committee
will be examining those results closely.
Several of the reports examined, including those of AIATSIS, CDC, AHL,
ILC and ATSIC, were from bodies providing client services. While some
modest background on the development of the charters was provided, the
committee believes that this is another area in which a major outreach
effort is required, to ensure that every potential customer is aware of
the service standards promised.
Requirement for non-reporting bodies to report
In accordance with standing order 25 (21) (h) the committee is required
to report on bodies which do not present an annual report to the Senate
and which should present such a report.
On this occasion the committee makes no recommendation under this requirement.
Senator Warwick Parer
Chairman
Footnotes
[1] ATSIC Annual Report 1997-98, p. 9.
[2] ibid., p. 173.
[3] ibid., p. 50.
[4] Aboriginal Hostels Ltd, Annual Report
1997-98, pp. 25, 68.
[5] Aboriginal and Torres Strait Islander Commercial
Development Corporation, Annual Report 1997-98, p. 10.
[6] Senate Hansard, 3 December 1998,
p. 1256.
[7] Aboriginal Land Rights (Northern Territory)
Act 1976 s.37A.
[8] The Senate Order of Business, 10 March 1999,
p.7.
[9] ATSIC Annual Report 1997-98, p. 207.
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