Chapter 2

Selected agencies and reports

2.1        The Committee has selected the following departments and agencies for assessment:

• Department of Finance and Deregulation;
• Department of the Prime Minister and Cabinet;
• National Library of Australia; and
• Australian Institute of Family Studies.

Department of Finance and Deregulation

2.2        The Department of Finance and Deregulation's (Finance's) annual report for 2009–10 provides a clear and detailed review of the operations of the department, including its role in the Government's response to the global financial crisis.

2.3        Issues highlighted in the report included the department's work with ComSuper to make the Government's superannuation scheme more sustainable in the long term, including merging the Australian Reward Investment Alliance, the Military Superannuation and Benefits Board and the Defence Force Retirement and Death Benefits Authority.[1]

2.4        In addition, the annual report provided information on the advancement of the Operation Sunlight agenda, the intergovernmental TelePresence system which provides secure video conference facilities in a number of locations throughout Australia, the whole-of-government property management framework[2] and improvements to the transparency of parliamentary entitlements.

2.5        Finance noted that it is examining ways to reduce the cost of its internal operations, as well as undertaking a study with PM&C and Treasury to explore the possibility of the three departments sharing human resources and financial systems.[3]

Portfolio structure

2.6        There was one change to the Finance portfolio structure following the end of the financial year: the Tuggeranong Office Park Pty was officially deregistered on 2 September 2010, this process was noted in Finance's annual report.

2.7        There were several changes to the organisational structure of Finance in the 2009–10 financial year:

• a Service Delivery Reform branch was established within the Deregulation Group to 'supervise implementation of the recommendations made in the APS Reform Blueprint';
• the Budget Review Division in the Budget Group was given wider scope to provide advice and assistance to Finance's Executive Board on whole-of-government strategic policy issues and was re-named the Strategic Policy Division; and
• a major reorganisation of the way the department manages its corporate activities was undertaken to better adhere to corporate best practice.

Transparency and scrutiny

2.8        Finance discussed its continuing work to improve the transparency of Government finances. The department helped prepare a Coordinated National Security Budget and the first public report on the Certificate of Compliance with the FMA Act.

2.9        As discussed in the Committee's report on annual reports in January 2010, Finance issued the Commonwealth Grant Guidelines with effect from 1 July 2009. This new measure has now been incorporated into the PM&C requirements for annual reports for departments and agencies under the FMA Act and is discussed further below in relation to other departments and agencies.[4]

2.10      In response to the Government's Ahead of the Game: Blueprint for the reform of the Australian Government administration, Finance is taking a lead role, implementing 11 of the 28 reforms.[5]

2.11      The department's review of performance for the year 2009–10 is broken up into separate chapters for each outcome. The review is comprehensive and easy to compare to the Portfolio Budget Statements (PBS). The performance information for each outcome is provided in a table with deliverables, Key Performance Indicators (KPIs) and overall results. This is useful to the reader and makes for easy comparison with each of the three levels of accountability. Furthermore, information on consultancies was provided by outcome and this was very helpful for the Committee.

2.12      In relation to achieving its KPIs, Finance included explanations of how the results were achieved or what is being done by the department if they were not achieved. The level of detail provided does not overwhelm the reader but is concise and addresses matters raised appropriately. One KPI not achieved was the compliance by all Commonwealth agencies with the Government's best practice requirements for regulatory impact analysis. The Committee commends the department for including the actual compliance rates and policy measures that have been introduced to ensure the target is met.[6]

2.13      In response to recommendations in previous Committee reports, the Department of Finance and Deregulation provides greater detail of spending on Government advertising.[7] In addition, Finance now provides a report on Government advertising to the Parliament.[8] In response to the Hawke review of 2010; the Guidelines on Information and Advertising Campaigns were adopted and the Independent Communications Committee (ICC) was also established to ensure advertising campaigns comply with the guidelines. Finance's 2009–10 annual report provides a table of all major advertising campaigns carried out by each Government department.[9]

2.14      An achievement by the department over the reporting period was the release of the 2010–11 Budget papers under a Creative Commons license. This license now allows the information in the Budget papers to be used without the need for additional copyright permissions.[10] The Committee recognises that this will make the Budget papers more accessible to the Australian public.

2.15      As noted in the Committee's report last year, the Finance compliance index provided chapter numbers and not individual page numbers.[11] This appears to be due to each requirement being part of the narrative discussion, rather than being separately identified. This has helped the continuity of the report for the reader, however some mandatory requirements are not clearly identified in the report. The Committee encourages consistency across all departments and agencies in relation to the compliance indices.

2.16      In relation to external scrutiny, the Committee noted two investigations listed in Finance's annual report. Information on an incident being investigated by ComCare found that Finance had breached requirements to maintain a safe working environment. In response to the investigation and recommendations by ComCare, Finance has developed an action plan to prevent further incidents.[12] Furthermore, a Freedom of Information (FOI) request case which was being carried out by the Commonwealth Ombudsman was discussed in the report. However, the relevant legislation had been amended so the case was no longer necessary. The Committee commends Finance for clearly stating the rights of the individual in relation to FOI requests and for providing detailed information on the Committees and working groups to be contacted for FOI enquiries.[13]

Department of the Prime Minister and Cabinet

2.17      The 2009–10 annual report produced by the Department of the Prime Minister and Cabinet (PM&C) provides an easy to read and well set out explanation of the operations and functions of the department, particularly in its coordination role for the Government. The Committee notes that 2011 is the centenary year for PM&C.

2.18      Significant issues for PM&C during the reporting period included provision of advice to the Government in response to the global financial crisis and assistance with the negotiations between state and territory Governments to progress the Council of Australian Governments (COAG) reform agenda. In addition, the department facilitated the transition to office of the new Prime Minister, the Hon Julia Gillard MP.

2.19      Other initiatives during the period included the Government's long-term social inclusion strategy for a Stronger Fairer Australia, preparation of the White Paper on Counter-Terrorism and a review of cabinet processes. The annual report also highlights some of the major meetings managed by PM&C including the Asia-Pacific Cooperation Forum (APEC), the Pacific Islands Forum (PIF) and the Commonwealth Heads of Government Meeting (CHOGM).

Portfolio structure

2.20      The PM&C annual report described the following achievements and changes over the financial year 2009–10 in relation to its portfolio structure:

• transfer of the social inclusion functions from other social policy agencies;
• transfer of the information law activities from the Attorney-General's Department;
• expansion of the Government's activities related to the coordination of security arrangements following the Homeland and Border Security Review;
• development of legislation to establish the office of the Independent National Legislation Monitor;
• development of the Australian Government Crisis Management Framework; and
• provision of support for reform of the freedom of information and privacy regimes in preparation for the establishment of the Office of the Australian Information Commissioner.[14]

Transparency and scrutiny

2.21      PM&C provides a comprehensive explanation of its outcome and program structures. A broad outline of each sub program which deliver on the outcomes of the department and its two programs—Prime Minister and Cabinet, and Official and Ceremonial Support—is also included. In addition, the annual reports identifies and explains instances where there is a difference between the 2009–10 PBS and the annual report, for example the appropriation for CHOGM was made after the release of the 2009–10 PBS.

2.22      PM&C also provides a tabulated diagram of the transition from the 2008–09 structure of Output Groups to the 2009–10 departmental structure of Programs. This is particularly helpful for the Committee in relation to questioning at estimates.

2.23      An area of interest for the Committee was the table on 'Trends in Numbers of Senate Estimates Questions on Notice', which showed an increase in the number of questions on notice for Additional Estimates, while questions on notice for Budget Estimates decreased.

2.24      Each sub-program, for example, Sub-program 1.1: Domestic Policy, is an individual chapter in the report. This is helpful for a department such as PM&C as its policy coverage is vast and varied. This approach enables the reader to access information about the separate areas of PM&C while also providing the results of the Key Performance Indicators relevant to that sub-program.

2.25      In relation to KPIs, PM&C often included the qualitative indicator 'high level of satisfaction' rather than a quantitative percentage or target number. This often provided results such as 'feedback indicates satisfaction with the quality and timeliness'. If improvement was required, the report noted 'some areas for improving' followed by 'these issues were addressed and feedback for the year was positive overall'.[15] The Committee considers that the department should aim to provide more specific results on KPIs with quantitative, rather than qualitative, indicators. At the same time, this form of reporting allows for a cohesive report and keeps the KPIs within the context of the program. Tabulated results can create some disjuncture. The Committee does acknowledge the clear correlation between the deliverables and KPIs in the PM&C annual report and the 2009–10 PBS.

2.26      PM&C provides trend information where applicable and obviously where available. The Committee acknowledges this aspect of the report as it provides for easy comparison to previous years' results.

2.27      In relation to external scrutiny, there were no external audits of PM&C specifically, however the department contributed to some Australian National Audit Office (ANAO) reports including the audit on Effective Cross-Agency Agreements. This report stated that, to improve common understandings across agencies, appropriate and accessible guidance material and mechanisms for internal scrutiny of agreements should be developed.[16]

2.28      Discussion on the department's staff training and Freedom of Information area is thorough. In relation to discretionary grants, PM&C provided the total amount spent and directs the reader to the website for more specific details, whereas Finance provided only the website. The Committee is happy with both approaches.

2.29      Lastly, PM&C provides a comprehensive compliance index, ensuring explanations of any 'nil' responses to the PM&C requirements for annual reports.

National Library of Australia

2.30      The Committee has decided to comment briefly on this report as it is the Library's 50^th annual report. The Library is a statutory body and a Commonwealth authority for reporting purposes. The Library must comply with the reporting requirements set out in the Commonwealth Authorities and Companies (Report of Operations) Orders 2008. The Library has also incorporated some of the PM&C requirements into its report to provide further information and greater transparency.

2.31      Some of the additional information provided in the report includes the Library's Disability Action Plan for 2010–12 which will align with the Commonwealth Disability Strategy. Although not strictly required of CAC Act bodies, information on the Library's assets management, service charter and detailed information on consultancy services are included in the annual report.

2.32      In relation to the review of its performance over the financial year, the Library provides a clear correlation between the outcome and program structure as set out in the 2009–10 PBS. The Library has broken its one outcome into strategies and has ensured the review of its KPIs is comparable to the Budget papers. In addition, each strategy includes 'major initiatives', 'issues and developments' and finally, 'performance' to provide a thorough summary and review of the Library's performance over the financial year.[17]

2.33      The annual report is easy to read, free of jargon and easy to navigate due to clear headings and chapter titles. The inclusion of retro magazine and newspaper covers on the first page of each chapter also makes for an aesthetically pleasing report.

2.34      The Library has included a compliance index in relation to the Order of Operations, and notes that some provisions of the PM&C requirements have been included. The only comment from the Committee is that page references could be included in the index and specific PM&C requirements adhered to could be referenced. The Committee encourages CAC Act bodies that include aspects of the PM&C requirements in annual report to provide this information in the compliance index.

Australian Institute of Family Studies

2.35      The Committee has decided to also comment briefly on the annual report of the Australian Institute of Family Studies (AIFS) and notes that AIFS celebrated its 30^th anniversary in February 2010. The Institute is a statutory agency and reports according to the requirements of the FMA Act. The Committee also notes that during the reporting period the Institute completed its evaluation of the 2006 reforms to Australia's family law system. AIFS noted that this report was the most comprehensive examination undertaken of the Australian family law and service system.

2.36      In 2009–10, AIFS strove to strengthen ties with Australian Government departments. A key tool in this goal was signing a memorandum of understanding (MoU) with the Department of Education, Employment and Workplace Relations and the Australian Institute of Criminology, to compliment the MoUs with the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and the Australian Institute of Health and Welfare which have both been renewed.

2.37      In relation to transparency and accountability, the Institute has a clearly set out annual report. The Institute reports the resources necessary for its one outcome, as set out in the PBS for 2009–10. It provides the review of the Institute's performance in relation to deliverables and KPIs and the Committee encourages the Institute to continue with this approach.

2.38      A summary of the research activities of AIFS is included. The social justice and equity impacts of the Institute are explained in detail. This is particularly welcome, as much of its research focuses on this subject area and the issues investigated can affect a large part of the population.

2.39      The Committee recognises the work undertaken by the AIFS in finishing the 2009–10 financial year with a small surplus of $1,962, after finishing the year
2008–09 with an operating deficit of $179,494.

2.40      In relation to other requirements, the description of initiatives on health and safety are comprehensive and statistics on staffing include details of non-salary benefits by employment category and classification level. The report provides detailed information on the Institute's Commonwealth Disability Strategy performance using the Government's recommended template.

General comments

Implementation of Operation Sunlight

2.41      Under the Government's Operation Sunlight initiative to improve the openness and transparency of public sector budgetary and financial management, a number of significant changes were implemented in 2008-09. Agency annual reports are now required to provide appropriations by outcome, details of departmental appropriations expected to be carried over into the new financial year to meet future obligations are to be identified, and agency resource statements were introduced.

2.42      In addition to the departments and agencies reviewed above, the Committee would like to commend the Australian National Archives for providing a clear review of performance during the year in relation to programs and contribution to outcomes.

CAC Act bodies and Operation Sunlight

2.43      With the transfer of the Office for the Arts and the Office for Sport to the PM&C, the Committee now has oversight of a number of additional Commonwealth authorities. This has provided the Committee with the opportunity to examine a wide-range of CAC Act agencies.

2.44      The Commonwealth Authorities and Companies (Report of Operations) Orders 2008 specify that:

(1) The report of operations must include...

(a) a review of how the Commonwealth authority has performed during the financial year...

(2) The assessment of performance required under paragraph (1) (a) should:

(a) address both the efficiency and effectiveness of the operations of the Commonwealth authority in producing its principal outputs; and

(b) make clear links between outcomes, strategies for achieving those outcomes and the principal outputs...

Note The presentation of outcome and output information for Commonwealth authorities in the General Government Sector should be consistent with the relevant Portfolio Budget Statements and Portfolio Additional Estimates Statements.

2.45      The Committee would like to commend the following agencies which provided a review of operations in relation to programs, consistent with the agency's 2009–10 PBS:

• Australian Sports Commission;
• National Film and Sound Archive; and
• National Museum of Australia.

2.46      Some CAC Act bodies provided short explanations of the results of KPIs and outcomes from the 2009–10 PBS. However, the review of operations was not necessarily consistent with the PBS. Agencies such as the National Gallery of Australia, the National Maritime Museum of Australia and Screen Australia reported on performance by the agency's strategic goals. While this approach can be interesting for the reader, the Committee encourages the use of outcomes and programs to review performance to meet the aims of Operation Sunlight.

External scrutiny and accountability

2.47      The PM&C requirements state that annual reports:

...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.[18]

2.48      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 and comprehensive manner in annual reports. The Committee commends the National Museum of Australia and the National Film and Sound Archive for providing comprehensive details relating to internal and external scrutiny in the 2009–10 annual reports. However, the Committee considers that the Australian Sports Commission and the National Archives of Australia could provide further information on the details of individual inquiries which have been carried out in relation to the agency.

Commonwealth Fraud Control Guidelines certification

2.49      The Committee's Annual reports (No.1 of 2009) recommended that agency heads certify the Commonwealth Fraud Control Guidelines in accordance with the PM&C requirements.[19] The Committee notes that some agencies, including the Australian National Audit Office, the Department of the Senate and the Office of the Official Secretary to Governor-General, have complied with the requirements and have included a signed statement certifying their fraud control initiatives. However, there still remain a number of agencies which do not provide the necessary certification.

2.50      The Committee commends the response of the Department of Parliamentary Services to a significant incident which took place during 2009–10. The Parliament House website experienced a distributed denial of service attack and DPS implemented a number of measures to reduce the impact of the incident. The report indicates that DPS is investigating a number of other possible countermeasures. In relation to general fraud control, DPS published a number of fraud-related articles in the department's newsletter and revised its Fraud Control Policy and Framework which sets out the responsibilities of all staff and the commitment of the department to control fraud.[20]

Grant programs

2.51      To improve the transparency and accountability of Government grant administration, all FMA Act departments and agencies are subject to the Commonwealth Grant Guidelines as discussed above at paragraph 2.9. The Guidelines require departments to publish details of grants on their website within seven working days of the funding agreement taking affect. The Committee commends the National Archives of Australia for providing comprehensive details on grant administration.

2.52      The Committee does note that the PM&C requirements provide only the following sentence to be included in department and agency annual reports: 'Information on grants awarded by the [insert agency name] during the period 1 July 2009 to 30 June 2010 is available at [insert web address]'. As such, the majority of agencies and departments fulfilled this requirement.

Consultancies and contracts

2.53      While it should be acknowledged that many departments and agencies comply with the PM&C requirement to provide information on consultancies, some agencies, such as the Future Fund, provided only reference to the AusTender website. The PM&C requirements specify that a table providing information on consultancy spending is to be included in the annual report or be available on the Internet. At the time of printing there was no table available on the Future Fund's website.

2.54      The Committee would like to acknowledge the detailed consultancy information provided by the National Gallery of Australia and the Australian National Audit Office. Agencies such as ARIA are encouraged to provide information on existing consultancies.

Commonwealth Disability Strategy

2.55      Annual reports must include an assessment of performance in implementing the Commonwealth Disability Strategy (CDS). The PM&C requirements 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.[21]

2.56      The requirements provide comprehensive information on what is required regarding the CDS. Departments and agencies are encouraged to use the template accessible on the FaHCSIA's website to fulfil this reporting requirement.[22]

2.57      In the assessment of the 2009–10 annual reports, the Office for the Privacy Commissioner, Old Parliament House and the National Museum of Australia all followed the template as set out on FaHCSIA's website and provided thorough and insightful descriptions of the organisations' disability strategies.

Occupational health and safety

2.58      The PM&C requirements provide the following provisions relating to the Occupational Health and Safety Act 1991 (the OHS Act):

In accordance with sub-section 74(1) of the OHS Act, the annual report is to include details of...initiatives taken during the year to ensure the health, safety and welfare at work of employees and contractors of the department or authority; health and safety outcomes... achieved as a result of  [these] initiatives[23]

2.59      The Committee notes that while most departments and agencies comment on their health and safety policies, there is little detail on the specific initiatives that have been taken during the year to ensure the safety of employees. The Committee notes that the Department of the Senate and the Department of Parliamentary Services provide comprehensive detail in this regard. However, the annual report of the Australian Reward Investment Alliance (ARIA) and the Future Fund fail to provide detail of specific initiatives.

Advertising and market research

2.60      FMA Act bodies and CAC Act authorities must comply with section 311A of the Commonwealth Electoral Act 1918. This requires that the annual report includes a statement of all particulars, including amounts paid to advertising agencies, market research, polling, direct mail and media advertising organisations. The Committee considers that greater detail could be included in the reports of Screen Australia, the Australian Council of the Arts and the Australian Sports Commission to meet these requirements.

2.61      The Committee acknowledges the high level of detail in relation to advertising and market research provided by the National Gallery of Australia and Old Parliament House. The Committee suggests that agencies which have reported no campaign or recruiting advertising costs provide this information as a standalone paragraph.

Staffing

2.62      The PM&C requirements in relation to Human Resource Management state that:

The discussion must be supported by broad categories of statistics, for example, on the number of APS employees including ongoing and non-ongoing) as at 30 June for the current and preceding year, by: each classification level; full-time/ part-time status; gender; and location.

Furthermore:

The annual report must include information on performance pay including:

• the number of APS employees at each classification level who received performance pay;
• the aggregated amount of such performance payments at each classification level;
• the average bonus payment and the range of such payments at each classification level; and
• the aggregate bonus payment for the agency as a whole.[24]

2.63      In relation to these requirements, several agencies and departments did not provide adequate detail. The Committee encourages agencies (including the Office of the Privacy Commissioner and ARIA) to provide more detailed information to satisfy the PM&C requirements. The Committee acknowledges the detailed information on staffing provided by the Australian National Audit Office.

Compliance index

2.64      Most annual reports reporting on the period 2009–10 included a compliance index, indicating page references for each reporting requirement.

2.65      A compliance index is a useful feature of reports and 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. For accuracy and completeness, departments and agencies should indicate in the compliance index when matters are not applicable.

2.66      Furthermore, many CAC Act bodies provide a compliance index in relation to the requirements set out in the Commonwealth Authorities and Companies (Report of Operations) Orders 2008. The Committee encourages agencies such as the Australian National Maritime Museum, the Australian Council for the Arts and Screen Australia to include a compliance index in their next annual reports.

Use of PM&C requirements by CAC Act bodies

2.67      The PM&C requirements 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 as specified in the Commonwealth Authorities and Companies (Report of Operations) Orders 2008. In previous reports, the Committee has encouraged CAC Act bodies to take into account the PM&C requirements where possible. The National Gallery of Australia and the Australian Sports Commission included select provisions of the PM&C requirements. The Committee found this helpful and suggests that this practice could be adopted by other CAC Act bodies.

Senator Helen Polley

Chair

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