Chapter 2


Chapter 2

Selected agencies and reports

2.1        The committee has selected the following department and agencies for assessment:

  • Department of Finance and Deregulation;
  • Office of the Privacy Commissioner (The Operation of the Privacy Act); and
  • Office of the Renewable Energy Regulator.

Department of Finance and Deregulation

2.2        The 2008–2009 annual report produced by the Department of Finance and Deregulation (Finance) provides a thorough insight into the operations and functions of the department.

2.3        Noted within the annual report is the contribution made by the department to the three stimulus packages introduced by the government in response to the global financial crisis: the Economic Security Strategy; the Nation Building Package; and the Nation Building and Jobs Plan.

Portfolio structure

2.4        Two changes to the portfolio structure occurred during the period between 1 May 2009 and 31 October 2009:

  • the Telstra Sale Company was deregistered; and
  • the Albury-Wodonga Development Corporation became a Commonwealth authority under the CAC Act.

Transparency and scrutiny

2.5        The performance information and resources for each outcome provided in the annual report is comprehensive and provides detailed information on results including when performance targets have not been achieved. The committee notes that some agencies provided neither the same level of information nor in such an easily accessible form.

2.6        The annual report also provides a comprehensive section on external scrutiny of the department. The notes on parliamentary committee inquiries and reports provide useful information on the progress on responses to recommendations made by the committee which are still outstanding.

2.7        Other information provided in this section includes Finance's involvement in Australian National Audit Office (ANAO) matters. Between 23 September 2008 and 30 June 2009, the (ANAO) produced 14 reports where Finance had either a significant involvement or included recommendations specific to Finance. The report provides an outline of the objective of each ANAO report, and how Finance seeks to address the recommendations made. The committee commends the department for the level of detail provided on these matters.

2.8        During the 2008–2009 year, the Office of the Commonwealth Ombudsman investigated 13 matters concerning Finance. The annual report states that the 'majority of these issues related to concerns about the Act of Grace payments raised by members of the public'. The Ombudsman took no action on nine of the cases and as at 30 June 2009, four matters were still under investigation.[1]

2.9        Finance's annual report includes appropriate indices, however the referencing being that of chapter numbers rather than page numbers is not ideal. Some mandatory criteria span over several chapters, making it very difficult for the reader to locate specific information. The Finance annual report for 2006–2007 included page numbers which was much more user friendly.

Grants

2.10      The department is to be commended for the inclusion of grant funding amounts within the report. The addition of the amounts provides one convenient reference for all information relating to grants, rather than supplying a link to the website as is common practice.

2.11      Although this level of grant reporting detail is not mandatory under the PM&C Requirements, the new policy framework for grants following the December 2008 Review of Operation Sunlight: Overhauling Budget Transparency requires agencies to publish information on the administration of grants, including details of grants on their websites. In June 2009, Finance issued the Commonwealth Grant Guidelines to support the Operation Sunlight framework.[2]

Office of the Privacy Commissioner

2.12      The Office of the Privacy Commissioner is a statutory authority that carries out specific functions relating to privacy information and activity under the Privacy Act 1988.

2.13      The agency's 2008–2009 annual report provides an overview of a range of new events and services launched during the year including the youth privacy video and portal, private i; the Australian Privacy Awards; and the Australian Privacy Medal.

Accessibility

2.14      The report begins with a User's Guide, briefly summarising each section. This is a useful resource for readers. The report also uses plain language, large font for easy readability, and provides contact details for the Translating and Interpreting Service for non-English speakers who wish to access the report.

2.15      The Office of the Privacy Commissioner report does not however, meet some of the requirements contained in the Department of the Prime Minister and Cabinet's Requirements for Annual Reports: for departments, executive agencies and FMA Act bodies. For example, a compliance index was absent and this made searching for requirements under subsections 63(2) and 70(2) of the Public Service Act 1999 fairly cumbersome.

2.16      Comprehensive information on purchasing was not provided. The requirement is for an assessment of purchases against core principles, but the report notes the following without any detail as to whether there are purchases or purchasers to report on:

The Office's purchasing procedures comply with the Australian Government Procurement Guidelines issued by the Department of Finance and Deregulation. They address a wide range of purchasing situations, allowing managers flexibility when making purchasing decisions provided arrangements comply with the Australian Government’s core procurement principle of value for money.[3]

2.17      The report also did not include whether grants for performance payments to staff are made.

The Office of the Renewable Energy Regulator

2.18      As a statutory authority under the FMA Act, the Office of the Renewable Energy Regulator (ORER) is a government agency in the Department of Climate Change, within the Prime Minister and Cabinet portfolio.

2.19      The ORER's 2008–2009 annual report provides an insight into the purpose of the agency, which is to administer the Australian Government's Renewable Energy (Electricity) Act 2000, Renewable Energy (Electricity) (Charge) Act 2000 and associated Regulations; and to establish the framework for the Mandatory Renewable Energy Target (MRET).[4]

2.20      The committee notes the appointment on 1 June 2009 of Mr Andrew Livingston as the Renewable Energy Regulator by the Minister for Climate Change and Water, Senator the Hon. Penny Wong.

2.21      The ORER included a compliance index in addition to a general index in its report, however certain mandatory omissions are apparent. Additional attention to detail to ensure that index page numbers are correct would assist readability.[5]

2.22      The committee notes the high standard of information the ORER has provided on ecologically sustainable development and environmental performance (ESD) – an FMA Act annual report requirement under section 516A of the Environment Protection and Biodiversity Conservation Act 1999.

2.23      Despite the easy to follow requirements for ESD assessment, only a few departments and agencies under the committee's oversight addressed the criteria. Included in ORER's assessment of their ESD and environmental performance are the agency's principles and activities; an overview of how the organisation's outcomes contribute to ESD; the effect of the ORER's activities on the environment; and the mechanisms for reviewing and increasing the effectiveness of the measures in place to minimise this effect.[6]

General comments

Commonwealth Fraud Control Guidelines certification

2.24      The committee's Annual Reports Report No.1 of 2009 recommended that agency heads certify the Fraud Control Guidelines in accordance to the PM&C Requirements for Annual Reports.[7] The committee notes that some agencies including the Department of Prime Minister and Cabinet, the National Archives of Australia, the Office of the Commonwealth Ombudsman, and the Department of the Senate have complied with the requirements and have included a signed statement certifying their fraud control initiatives. There still remain a number of agencies which do not include the necessary certification.

2.25      The committee also notes that in its Report No 1 of 2009, it was indicated that the Department of Climate Change (DCC) had undertaken to develop its own Fraud Control Plan in the first quarter of 2008–2009.[8] The DCC Plan is now in place along with a Fraud Risk Assessment. The DCC 2008–2009 annual report states:

The Fraud Control Plan complies with the Commonwealth Fraud Control Guidelines issued under regulation 19 of the Financial Management and Accountability Act 1997 and is available to staff on the department's intranet. The plan has in place appropriate fraud prevention, detection, reporting and data collection procedures and processes that meet the specific needs of the department.[9]

Compliance Index

2.26      Most, not all, of the annual reports reporting on the period 2008–2009 included a compliance index, indicating page references for each requirement listed in the Requirements for Annual Reports.

2.27      While no longer mandatory under the reporting requirements, the committee strongly supports the inclusion of a compliance index in annual reports. A compliance index is a useful feature of reports and considerably assists the committee's task of assessment. 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.

2.28      The committee notes that there is a tendency for agencies including for instance, the National Archives of Australia and the Office of the Inspector-General of Intelligence and Security, to include a compliance index but omit criteria that are not applicable. For the sake of accuracy and completeness, the agencies should indicate when matters are not applicable. The index would preferably include a 'nil' return entry where the agency has nothing to report under an item.

2.29      The committee commends the departments and agencies including the Australian Public Service Commission, Old Parliament House, and ComSuper for their inclusion of complete compliance indices in their 2008–09 annual reports.

Adherence to PM&C requirements by CAC Act bodies

2.30      The PM&C Requirements for Annual Reports apply to government departments, executive agencies, and FMA Act bodies. Companies and authorities listed under the Commonwealth Authorities and Companies Act 1997 have different reporting requirements, with content specified in the Corporations Act 2001.

2.31      Nevertheless, the committee considers that CAC Act bodies should take into account the PM&C Requirements for Annual Reports where possible. The committee commends Australian Hearing Services which voluntarily adhered to the requirements in its Annual Report 2008–09.

Commonwealth Disability Strategy

2.32      Annual reports must include an assessment of performance in implementing the Commonwealth Disability Strategy. The PM&C Requirements for Annual Reports state:

The annual report must include an assessment of the department's performance in implementing the Commonwealth Disability Strategy (CDS) in the terms set out in the Guide to the Performance Reporting Framework. To assist agencies the Guide includes performance indicators and measures as well as guidance on how to apply the performance reporting framework. A suggested reporting template is also available.[10]

2.33      The requirements provide comprehensive information on what is required regarding the CDS. Departments and agencies are encouraged to use the template accessible on the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) website to fulfil this reporting requirement.[11]

2.34      In the assessment of the 2008–2009 annual reports, the Australian Electoral Commission and Old Parliament House provided thorough and insightful descriptions of the organisations' disability strategies.

Ecologically sustainable development and environmental performance

2.35      Reporting on ecologically sustainable development and environmental performance is required under section 516A of Environment Protection and Biodiversity Conservation Act 1999) for the following:

  • portfolio departments (not parliamentary departments);
  • executive agencies;
  • agencies declared to be statutory agencies for the purposes of the Public Service Act 1999;
  • Commonwealth authorities and companies as defined under the Commonwealth Authorities and Companies Act 1997; and
  • any other Commonwealth agency that is established by or under a law of the Commonwealth and is required by law to give an annual report to the responsible Minister.

2.36      In its Report on Annual Reports No. 1 of 2008, the committee had commented that improvements needed to be made on the reporting of economically sustainable development and environmental performance.[12] Several departments and agencies provided a robust assessment of their organisation's environmental performance, including impact measures. The Australian Public Service Commission, which noted existing as well as new initiatives;[13] and the Australian Electoral Commission were two of these agencies. Noteworthy also is ComSuper's report which presented their information by environmental consideration, in addition to presenting a table of comparative Operational Environment Indicators from 2007–2008;[14] and the National Archives of Australia for the inclusion of statistics on waste, water and energy consumption.[15] The Australian Institute of Family Studies and the Australian Reward Investment Alliance also provided additional information on this matter.[16]

External scrutiny and accountability

2.37      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.[17]

2.38      Annual reports should be a primary reference document for parliamentarians and others looking for information about external scrutiny of government agencies. As 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.

2.39      The committee commends the Department of Finance and Deregulation and Department of Human Services for providing comprehensive details relating to internal and external scrutiny and accountability in its 2008–2009 annual report.

Implementation of Operation Sunlight

2.40      Under Operation Sunlight, a number of significant changes have been implemented to improve transparency of government financial matters. The committee noted in its report No 2 of 2009 that a number of changes to annual reports should be made as a result of Operation Sunlight. These included disclosure of movements in appropriations by outcome; details of departmental appropriations expected to be carried over into the new financial year to meet future obligations; and the introduction of agency resource statements.

2.41      The committee's examination of the annual reports indicated that all included agency resource statements and provided information for each outcome showing the total resourcing for the outcome. For ease of comparison, the committee strongly encourages all agencies to use the suggested format contained in the PM&C Requirements for Annual Reports.

Senator Helen Polley
Chair

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