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.