Chapter 2
Review of selected annual reports
2.1
The committee has selected the annual reports of the following bodies
for closer examination:
-
Commonwealth Superannuation Corporation
-
Indigenous Business Australia
-
Central Land Council
-
Anindilyakwa Land Council
-
Outback Stores Pty Ltd
-
Executive Director of Township Leasing
Commonwealth Superannuation Corporation
2.2
The Chairman's introduction by Mrs Patricia Cross notes her commencement
in that role on 1 July 2014. She advises that there were strong investment outcomes
by the Commonwealth Superannuation Corporation (CSC) during 2013-14, noting
that default investment options (which include more than 90 per cent of members)
posted returns over 11.0 per cent in 2013-14, well exceeding the investment
objective of a real return of the CPI plus 3.5 per cent per annum.[1]
2.3
Other achievements for the year under review included:
-
the implementation of a personal financial advisory service with
experienced financial planners;
-
the introduction of a PSSap membership for CSS and PSS members
who want to make salary sacrifice contributions or rollover into PSSap;
-
a full security review of CSC's information technology functions;
-
ongoing discussions with government in respect of PSSap scheme
administration; and
-
the introduction of social media as an additional communication
channel for PSSap members.[2]
2.4
An area noted as a priority for the year ahead, which both the Chairman
and the Chief Executive officer, Mr Peter Carrigy-Ryan, referred to, was the
implementation of the Government's policy to merge ComSuper into CSC in 2015.[3]
2.5
The report sets out the agency's outcome, objective and the four key
performance indicators (KPIs) as listed in the Finance and Deregulation Portfolio
Budget Statements 2013-14.[4]
While the report does include comprehensive detail of investment performance,
it does not include a summary on performance against each KPIs for 2013-14. The
committee believes that a clear statement of the agency's effectiveness in
achieving its listed KPIs would be a helpful inclusion.
2.6
The report complies with the Commonwealth Authorities (Annual
Reporting) Orders 2011 (Authorities Reporting Orders). It is well set out
and makes extensive use of charts and tables, particularly for the presentation
of information on the superannuation schemes it manages.
Indigenous Business Australia
2.7
The reviews of Indigenous Business Australia's (IBA) Acting Chair,
Mr Anthony Ashby, and Chief Executive Officer, Mr Chris Fry, provide a
comprehensive overview of the year and noted overall strong results for IBA
programs. Some of the highlighted areas include:
-
achievements in the home ownership program with 556 new home
loans and engagement with remote communities and emerging markets to facilitate
home ownership opportunities;
-
supporting employment of 221 Indigenous Australians through the
Equity and Investment Program;
-
the pilot of a new service delivery model in a regional office to
evaluate ways to improve operations and customer interactions; and
-
facilitating professional development opportunities, including
through the CareerTrackers Indigenous internship program, the IBA scholarship
program and the partnership with the Melbourne Business School which enabled 25
Indigenous business leaders to participate in the Murra Indigenous Business
Master Class Program.[5]
2.8
It was noted in the overview section that IBA incurred a loss in
2013-14 which was attributed predominantly to non-cash asset revaluations, but
recorded a surplus on an operating basis. The Acting Chair stated that:
The loss incurred by IBA in 2013-14 does not affect IBA's
cash position nor distributions to its Indigenous investment partners. As a
result, IBA does not require any additional funding from the Australian
Government to cover the loss and remains well placed financially to meet its
operating commitments.[6]
2.9
The IBA annual report presents a comprehensive review of the agency's performance
for 2013-14. This section of the report clearly sets out how the IBA has
performed in relation to its KPIs and deliverables for its programs as set out
in the Families, Housing, Community Services and Indigenous Affairs
Portfolio Budget Statement for 2013-14. However, the inclusion of the
relevant program numbers in the annual report, as set out in the PBS, would have
assisted the reader to more readily locate the relevant performance information
in the report.[7]
KPIs and deliverables are mainly quantitative and include a target, providing a
useful basis for measuring and comparing performance over time.
2.10
In line with the preferred formatting approach as set out the PM&C
Requirements for Annual Reports, the report uses a tabular presentation for
most of the performance information, with supporting discussion. Where targets
have not been met the report includes explanatory comments. For example, the
IBA only achieved three of its five KPIs for the Equity and Investments Program.
It was explained that the IBA did not meet its portfolio return for 2013-14
largely because of continued challenges faced by the agency's regional and
remote tourism investments with visitor numbers to key markets at subdued
levels.[8]
2.11
The report is prepared in accordance with the Authorities Reporting
Orders. It includes a comprehensive compliance index to the mandatory reporting
requirements under the Orders, in addition to those required by the Aboriginal
and Torres Strait Islander Act 2005 (ATSI Act). Although not a requirement,
the report's compliance index also includes page references for compliance with
the PM&C Requirements for Annual Reports of June 2014 and the Corporate
Governance Principles and Recommendations, 2nd edition Australian Securities
Exchanges (ASX) Corporate Governance Council. The IBA is commended for its
commitment to better practice in its annual reporting with the inclusion of
page references for compliance with these additional principles.[9]
Central Land Council
2.12
The overview section of the Central Land Council's (CLC) annual report includes
accounts by the Acting Chair, Mr Francis Kelly, and Director, Mr David Ross.
The Acting Chair noted his replacement of Mr Maurie Ryan as Chair, stating
that the CLC Executive had stood down Mr Ryan as a delegate and called a
special council meeting to be held in September 2014.[10]
The Director's report also noted Mr Ryan's suspension by the CLC
Executive, noting that:
His suspension follows an independent investigation into his
behaviour...Despite these distractions the Council has worked hard to efficiently
achieve its statutory functions and protect the rights and interests of Aboriginal
people living in the bush.[11]
2.13
These reports note some of the challenges the CLC has dealt with as well
as highlighting successes, including the community development program and the
ranger program. A highlighted project was the opening of a swimming pool by the
traditional owners at Mutitjulu. The Acting Chair noted that:
They planned it and paid for it with their rent money from
the Uluru–Kata Tjuta National Park and Aboriginals Benefit Account (ABA) money
and they have saved up enough to run it until 2017. That means that, unlike
many other communities, they do not have to beg the government to keep their
pool open. That is self-determination.[12]
2.14
The report complies with the requirements under the Authorities
Reporting Orders, including a compliance index. The compliance index also
includes page reference numbers for parts of the report which comply with the
requirements under the Aboriginal Land Rights (Northern Territory) Act 1976
(ALR Act).
Anindilyakwa Land Council
2.15
The Chairman's and Chief Executive Officer's messages at the beginning
of the Anindilyakwa Land Council (ALC) Annual Report 2013-14 both refer
to the extensive restructuring processes undertaken during the reporting year
to ensure that the ALC is operating efficiently and effectively. It was noted
that the new structure implements reforms under the 15 Year Strategic Plan, the
Deloitte review of the ALC which was completed in 2013, and subsequent legal
advice on previous internal governance and financial arrangements, particularly
in relation to the ALC's relationship with the Groote Eylandt and Bickerton
Island Enterprises Aboriginal Corporation.[13]
2.16
The Chief Executive Officer, Mr Mark Hewitt, elaborated on the benefits
of the new structure:
The new operating environment allows ALC to focus on
supporting all Aboriginal Corporations operating across the Groote Archipelago,
working collaboratively in an Anindilyakwa Chamber of Commerce to better
coordinate key investments, programs and projects, matched to organisations
strengths.[14]
2.17
The report presents information about the ALC's activities and
performance against a specified outcome and a set of six outputs. It is an
informative report which provides a good summary of the main activities of the
ALC for 2013-14.
2.18
The report complies with the requirements set out in the Authorities
Reporting Orders, including the inclusion of a compliance index. Also included
was compliance index to the reporting requirements under the ALR Act.[15]
Outback Stores Pty Ltd
2.19
Outback Stores Pty Ltd is a wholly owned Commonwealth company and
prepares its annual report in accordance with requirements of the CAC Act, the Commonwealth
Companies (Annual Reporting) Orders 2011 (Companies Reporting Orders), and
the Corporations Act 2001.
2.20
The 2013-14 annual report is an informative document and includes the
required information under the Companies Reporting Orders, including the
mandatory compliance index for ease of reference. The information presented is
concise and provides a good overview of the activities, challenges and
achievements of the company for the year under review.
2.21
The Chairman, Mr Stephen Bradley, and the Chief Executive Officer,
Mr Steve Moore, in their reports, both noted the company's operating
profit of $123,219 for 2013-14. Also highlighted, was the addition of six new
stores to the group during the year.[16]
2.22
The financial statements received an unqualified audit report, however, there
was an 'emphasis of matter' noted.[17]
This matter, referred to in Chapter 1 of this report, concerned the failure of
Outback Stores to disclose a related party transaction with the Arnhem Land
Progress Aboriginal Corporation for the provision of information technology
services since 2009.[18]
The Outback Stores report addressed this issue and noted that:
The Outback Stores Board is committed to ongoing improvement
in its governance and has also implemented revised practices to manage
related-party transaction disclosures to avoid any real or perceived conflicts
of interest in future. This includes a separate standing agenda item for each
Board meeting to declare and review all potential conflicts of interest,
specific review and declaration of related party transactions for inclusion in
the Annual Report, and an appropriate note will be included in future financial
statements for all related party transactions for review by the ANAO.[19]
2.23
The committee welcomes these governance reforms and commends Outback
Stores Pty Ltd for clearly addressing the issue in its annual report.
Executive Director of Township Leasing
2.24
The Executive Director of Township Leasing is a statutory office holder
and the annual report is prepared in accordance with section 20R(1) of the ALR
Act. This sections specifies that:
The Executive Director must, as soon as practicable after the
end of each financial year, prepare and give to the Minister, for presentation
to the Parliament, a report on the operations of the Executive Director during
that year.
2.25
The annual report for 2013-14 is an informative document and presents a
good account of the operations for the year, including details of revenue and
expenditure for 2013-14.[20]
The report also provides useful background on the establishment of the office
and how the township lease model operates.[21]
2.26
The report includes tables of leases held by the Executive Director of
Township Leasing in 2013-14 for communities covered by township leases, housing
leases, and Commonwealth Asset Leases. Also included was a table setting out
the Alice Springs Living Areas (Town Camps) subleases held by the Executive
Director in 2013-14.[22]
2.27
The review by the Executive Director of Township Leasing, Mr Greg Roche,
provides a useful summary of the achievements and challenges of the office in
2013-14. He noted that during the year he provided support to Traditional
Owners negotiating prospective township leases, including at Gunbalanya,
Yirrkala and Pirlangimpi. This support involves providing information on
township leasing, the operation of consultative forums, and how the work of the
Office of Township Leasing can assist them to make an informed decision.[23]
A noted highlight was the completion of the Wurrumiyanga five year Head Lease
Review on 21 March 2014, and the registration of the variation with
the Northern Territory Land Titles Office.[24]
2.28
The Executive Director reported that individual private home ownership
on Aboriginal land in remote communities in the Northern Territory did not
progress significantly in 2013-14. However, he welcomed news that since
preparing the report, the Northern Territory Government had announced a home
ownership policy to give Territory House tenants in remote communities on
Aboriginal land the opportunity to buy their homes, noting that:
In recognition of the advantages of the township leasing
model the new policy favours applications from residents in communities covered
by a township lease.[25]
2.29
The Executive Director also took the opportunity in his review to note
his concern that there had been no reform to the tenure underlying the Alice
Springs Town Camps. He explained that he administers the Town Camps under a sub-lease
from the relevant Housing Associations which commits him to facilitate private
home ownership, but cannot grant a long-term interest to underpin home
ownership for a variety of complex legal reasons. He further noted that:
Both the Northern Territory and the Commonwealth Governments
have the capacity to legislate but to date have not done so. I would urge either
government, with the informed agreement of the Housing Associations, to legislate
so that the Town Camp residents of Alice Springs have the option of private home
ownership available to them.[26]
2.30
This year's report notes the passing of Mr Walter Pirliyamanyirra
Kerinaiua, a Senior Elder of the Mantiyupwi, who is described as the
'Grandfather of Township Leasing'.[27]
In addition to a tribute to Mr Kerinaiua, a number of his quotes are featured throughout
the report.[28]
Senator Cory Bernardi
Chair
[3] Commonwealth Superannuation Corporation
Annual Report 2013-14, pp 15 & 17.
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