Introduction

1.1        The Senate Finance and Public Administration Legislation Committee (the committee) is responsible for examining the annual reports of the parliamentary departments,[1] and the departments and agencies of the Prime Minister and Cabinet Portfolio and the Finance Portfolio.

1.2        This is the second report on annual reports for 2017 and provides an overview of selected annual reports for the 2015­–16 financial year presented to the Parliament between 1 November 2016 and 30 April 2017. Copies of this and other committee reports can be obtained from the Senate Table Office, the committee secretariat or online at the committee's web page.

Terms of reference

1.3        Under Senate Standing Order 25(20) the annual reports of certain departments and agencies stand referred to committees for examination and assessment. Each committee is required to:

1. examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory;
2. consider in more detail, and report to the Senate on each annual report which is not apparently satisfactory, and on the other annual reports which it selects for more detailed consideration;
3. investigate and report to the Senate on any lateness in the presentation of annual reports;
4. in considering an annual report take into account any relevant remarks about the report made in debate in the Senate;
5. if the committee so determines, consider annual reports of departments and budget–related agencies in conjunction with examination of estimates;
6. report on annual reports tabled by 31 October each year by the tenth sitting day of the following year, and on annual reports tabled by 30 April each year by the tenth sitting day after 30 June of that year;
7. draw to the attention of the Senate any significant matters relating to the operations and performance of the bodies furnishing the annual reports; and
8. report to the Senate each year whether there are any bodies which do not present annual reports to the Senate and which should present such reports.

Allocated portfolios

1.4        In the 45^th Parliament, the Senate allocated departments and agencies to committees on 31 August 2016.[2] In accordance with that resolution, the committee had responsibility for the oversight of the following:

• Parliament;
• Prime Minister and Cabinet Portfolio; and
• Finance Portfolio.

Role of annual reports

1.5        Annual reports place a great deal of information about government departments and agencies on the public record in relation to the performance, activities, management and financial position of the reporting body. Annual reports assist the Parliament in the examination of the performance of entities, and the administration of government programs.

Reports examined

1.6        During the period 1 November 2016 and 30 April 2017, 12 annual reports of bodies or statutory office holders were presented to the Parliament and referred to the committee. The reports examined are categorised as follows:

Non-corporate Commonwealth entities

• Digital Transformation Office—Report for 2015­–16

Corporate Commonwealth entities

• Anindilyakwa Land Council—Report for 2015–16
• Commonwealth Superannuation Corporation (CSC)—Report for 2015–16
• Defence Housing Australia (DHA)—Report for 2015–16
• Northern Land Council—Report for 2015–16
• Torres Strait Regional Authority—Report for 2015–16
• Wreck Bay Aboriginal Community Council—Report for 2015–16

Commonwealth companies

• Aboriginal Hostels Limited—Report for 2015–16
• Outback Stores Pty Ltd—Report for 2015–16

Statutory office holders

• Aboriginal Land Commissioner—Report for 2015–16
• Executive Director of Township Leasing —Report for 2015–16
• Independent National Security Legislation Monitor—Report for 2015–16

Reports not examined

1.7        The committee is not obliged to examine reports on the operation of Acts, reports of Royal Commissions, statements of corporate intent, surveys, policy papers, budget documents, corporate plans or errata. Where a report is referred to two standing committees, the committee has deferred examination of those reports to the committee which has primary oversight of the portfolio where that agency sits. Accordingly, the following documents were also referred to the committee but not examined in this report:

• Aboriginal Land Commissioner—Report no.73—Frances Well Land Claim no.64
• Independent National Security Legislation Monitor—Certain questioning and detention powers in relation to terrorism—Report, dated October 2016
• Indigenous Australians—Closing the gap
  • Ministerial statement by the Prime Minister (Mr Turnbull), dated 14 February 2017
  • Prime Minister's report 2017
• Campaign advertising by Australian government departments and agencies—Report for 2015–16
• Members of Parliament (Staff) Act 1984—Report for 2015–16
• Department of Finance—Consolidated financial statements for the year ended 30 June 2016
• Mid-year economic and fiscal outlook—2016–17—Statement by the Treasurer (Mr Morrison) and the Minister for Finance (Senator Cormann)
• Commonwealth Electoral Act 1918—Redistribution into electoral divisions—Northern Territory—Report, together with composite map and compact disc of supporting information, dated February 2017
• Finance—Advance to the Finance Minister—Report on advances provided under the annual Appropriation Acts for 2015–16.

Method of assessment and current annual reporting requirements

1.8        Senate Standing Order 25(20) requires that the committee examine reports referred to it to determine whether they are timely and 'apparently satisfactory'. The committee must consider whether the reports comply with the relevant legislation and guidelines for the preparation of annual reports in forming its assessment.

Annual Reporting Framework

1.9        The Commonwealth performance framework addresses performance planning, measurement and reporting through the planned performance information presented by entities in their Portfolio Budget Statements, corporate plans and annual performance statements. These documents are an essential part of the accountability system that provides the government with detailed information about the actual financial and non-financial performance of entities and forecasts future needs and expectations against the outcomes actually achieved.[3] 

Public Governance, Performance and Accountability Act 2013

1.10      The Public Governance, Performance and Accountability Act 2013 (PGPA Act) provides the legislative basis for annual reporting of non-corporate Commonwealth entities, corporate Commonwealth entities and Commonwealth companies. A description of these bodies is set out on the Resource Management section of the Department of Finance website:

• Non-corporate Commonwealth entity—an entity that is legally and financially part of the Commonwealth, and includes departments of state, parliamentary  departments, statutory authorities, and listed entities (a body, person, group of persons or organisation that is prescribed by rules made under the PGPA Act).
• Corporate Commonwealth entity—a body corporate, that is, it has a separate legal personality from the Commonwealth, and includes statutory authorities. It can act in its own right exercising certain legal rights such as entering into contracts and owning property.
• Commonwealth company—a company established by the Commonwealth under the Corporations Act 2001 that is wholly controlled by the Commonwealth.[4]

1.11      Commonwealth entities are required to prepare an annual report under  section 46 of the PGPA Act; and Commonwealth companies are required to prepare an annual report under section 97 (which also refers to requirements under the Corporations Act 2001).

1.12      The accompanying rule, the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule), sets outs the detailed mandatory annual reporting requirements for Commonwealth entities and Commonwealth companies.[5]

Statutory office holders and statutory bodies

1.13      Statutory office holders are engaged or employed under an Act, which may prescribe annual reporting requirements pursuant to the office. It should also be noted that there may be reporting requirements in the enabling legislation for statutory bodies (which may also be a Commonwealth entity). [6]

Non-statutory bodies

1.14      Non-statutory bodies (NSBs) are established by a minister and not pursuant to a statute. Guidelines for the preparation of annual reports of non-statutory bodies are contained in the government response to the Senate Standing Committee on Finance and Public Administration Report on Non-Statutory bodies.[7]

Summary of reporting requirements

1.15      Below is a summary of the legislative authority and requirements under which annual reports are prepared for different types of bodies:

Non-corporate Commonwealth entities

• PGPA Act, section 46 and the PGPA Rule, Division 3A(A);
• for portfolio departments and executive agencies, the Public Service Act 1999, sections 63(2) and 70(2);
• for parliamentary departments, the Parliamentary Service Act 1999       section 65;
• for statutory bodies, relevant enabling legislation; and
• other relevant legislative requirements.

Corporate Commonwealth entities

• PGPA Act, section 46 and the PGPA Rule, Division 3A(B);
• for statutory bodies, relevant enabling legislation; and
• other relevant legislative requirements.

Commonwealth companies

• PGPA Act, section 97, which also refers to requirements under the Corporations Act 2001 and the PGPA Rule, Part 3–3; and
• any other relevant legislative requirements.

Statutory office holders

• Any requirements in the enabling legislation.

Non-statutory bodies

• Annual reporting requirements are contained in the government response to the Senate Standing Committee on Finance and Public Administration Report on NSBs.[8]
• The terms of establishment of the NSB may also require it to report in certain ways or to report on certain topics.

Timeliness

1.16      Standing Order 25(20)(c) requires the committee to investigate and report to the Senate on any lateness in the presentation of annual reports. In assessing the timeliness of the presentation of annual reports, the committee assesses the presentation time against the requirements for different categories of bodies.

Commonwealth entities

1.17      Section 46 of the PGPA Act requires the accountable authority of a Commonwealth entity to prepare an annual report and provide it to the responsible Minister by the 15^th day of the fourth month after the end of the reporting period for the entity. This section of the Act does not provide for a timeframe for the Minister to present the report to the Parliament.

1.18      The former guidelines on annual reporting issued by the Department of the Prime Minister and Cabinet (PM&C) applying to non-corporate Commonwealth entities, provided for the responsible Minister to table annual reports before 31 October in the year it was given, and as best practice, before the Senate Supplementary Budget Estimates hearings if they are held before this date.[9]

1.19      The former PM&C Requirements for Annual Reports were replaced by the PGPA Rule which does not specify the date that a Minister is required to present an annual report to Parliament.

1.20      The PGPA Rule states that annual reports for corporate Commonwealth entities, non-corporate Commonwealth entities and Commonwealth companies must comply with the Guidelines for the Presentation of Documents to the Parliament which is prepared by PM&C (the guidelines).[10]

1.21      The guidelines advise that for all entities:

As per past practice, it is expected that the responsible Minister will present the report to each House of Parliament on or before 31 October. If Senate Supplementary Budget Estimates hearings are scheduled to occur prior to 31 October, it is best practice for annual reports to be tabled prior to those hearings. This ensures that annual reports are available for scrutiny by the relevant Senate standing committee.[11]

1.22      The guidelines also refer the reader to the Department of Finance (Finance) website for guidance material detailing the minimum mandatory content requirements for Commonwealth entities' and companies' annual reports under the new Commonwealth performance framework and in accordance with the PGPA Act and PGPA Rule.[12] The material available from this website includes the following:

• Resource Management Guide No. 135—Annual reports for non-corporate Commonwealth entities; and
• Resource Management Guide No. 136—Annual reports for corporate Commonwealth entities.

1.23      These resource management guides include advice in relation to the timetable for tabling annual reports. For non-corporate Commonwealth entities and corporate Commonwealth entities, the guides advise that:

It has been practice for the responsible Minister to present the report to each house of the Parliament on or before 31 October. If Senate Supplementary Budget Estimates hearings are scheduled to occur before 31 October, Ministers have sought to table annual reports prior to those hearings.[13]

Commonwealth companies

1.24      Under section 97 of the PGPA Act, Commonwealth companies are required to prepare an annual report and provide it to the responsible Minister:

1. if the company is required by the Corporations Act 2001 to hold an annual general meeting—the earlier of the following:
   1. 21 days before the next annual general meeting after the end of the reporting period for the company;
   2. 4 months after the end of the reporting period for the company; and
2. in any other case—4 months after the end of the reporting period for the company; or the end of such further period granted under subsection 34C(5) of the Acts Interpretation Act 1901.

1.25      In relation to the tabling of the annual report in the Parliament, subsection 97(5) of the PGPA Act states that:

If the Commonwealth company is a wholly-owned Commonwealth company, or is not required to hold an annual general meeting, the responsible Minister must table the documents in each House of the Parliament as soon as practicable after receiving them. In all other cases, the responsible Minister must table the documents in each House of the Parliament as soon as practicable after the annual general meeting of the company.

1.26      The advice contained in Resource Management Guide No. 137—Annual reports for Commonwealth companies, in regard to the timeframe for the presentation of reports of Commonwealth companies, closely aligns with the requirements under section 97(5) of the PGPA Act set out above.[14]

1.27      However, section 28C of the PGPA Rule requires reports of Commonwealth companies to comply with the PM&C Guidelines for the Presentation of Documents to the Parliament, which advise that '[a]s per past practice, it is expected that the responsible Minister will present the report to each House of Parliament on or before 31 October.'[15] The committee notes the inconsistent instruction on the presentation date for the presentation of annual reports of Commonwealth companies between the PGPA Act and Finance guidance material.

Committee view on the current arrangements for the timeframe for annual reporting

1.28      In its report 'Annual Reports (No.1 of 2017)' the committee has previously expressed concern about the lack of clarity regarding timeframes for the presentation of annual reports to both Ministers and to the Parliament. The committee maintains this concern, noting that while the PGPA Act provides legislated timelines in which entities need to provide an annual report to the responsible Minister, there remains only non–legislated 'guidelines' under the PGPA Rule for the presentation of annual reports to the Parliament by the Minister.

1.29      The committee recommends that entities familiarise themselves with required reporting obligations and meet best practice 'guidelines' in submitting annual reports to the Parliament.

Timeliness of reports examined

1.30      The committee considers the timely presentation of annual reports to be an important element in accountability to the Parliament and continues to encourage bodies and statutory officers to endeavour to meet relevant timeframes.

1.31      Appendix 1 lists the annual reports tabled (or presented) in Parliament between 1 November 2016 and 30 April 2017, with relevant tabling dates. This table includes the date the reports were tabled in the Senate and House of Representatives, and for the purposes of this discussion on timeliness, the earlier date of tabling in either chamber is taken to be the date of presentation to the Parliament. The table also provides the dates the reports were submitted to, and received by, the Prime Minister or relevant Minister.

1.32      As noted above, the presentation of annual reports to the Parliament has two elements with regard to timeliness: the submission of the report to the Minister and the presentation of the report to the Parliament.

1.33      In relation to the first element, most of the Commonwealth entities met their prescribed reporting timeframe under section 46 of the PGPA Act by submitting their reports to the Minister by 15 October 2016. Those who did not meet this timeframe included Aboriginal Hostels Limited, Wreck Bay Community Council and the Commonwealth Superannuation Corporation. However in respect of the second element, all entities failed to meet the guidelines of best practice that require an entity to present the report to each House of Parliament on or before the 31 October.[16]

1.34      As noted earlier, some statutory bodies have reporting requirements prescribed in legislation that is additional to the PGPA Act. For example, the Executive Director of Township Leasing and the Aboriginal Land Commissioner are required under the Aboriginal Land Rights (Northern Territory) Act 1976 to prepare and give to the Minister an annual report on operations as soon as practicable after 30 June each year. Under this Act, the Minister is required to present the report to the Parliament within 15 sitting days of receipt. The same reporting obligations apply to the Independent National Security Legislation Monitor under the Independent National Security Legislation Monitor Act 2010 (Cth).[17]

1.35      While reports from statutory bodies were considered to have been submitted in a timely manner some reports were not tabled within 15 sitting days of receipt from the Minister.[18] Of the 2015-16 annual reports, the Independent National Security Legislation Monitor and the Executive Director of Township Leasing both had reports that were presented by the Minister to Parliament within 15 sitting days of receipt. However, the Aboriginal Land Commissioner report was not tabled within the guidelines for presentation to the Parliament. Comparatively in the 2014-15 year all entities met the recommended timeline for tabling within 15 sitting days.

1.36      The committee recommends all entities note that it is government policy that all annual reports should be tabled by 31 October or where legislated for statutory bodies, within 15 sitting days.[19] The committee encourages agencies and Ministers to meet this date.

Approach to assessing the 2015–16 annual reports

1.37      Annual reports of corporate and non-corporate Commonwealth entities are required under section 39 of the PGPA Act to include annual performance statements. It is noted that Commonwealth companies are not required to prepare annual performance statements; however, paragraph 27A(2)(b) of the PGPA Rule requires Commonwealth companies to report in their annual reports on the actual performance results achieved against the performance criteria published in their corporate plans.

1.38      An entity's annual performance statement provides an assessment of the entity fulfilling its purpose(s) by evaluating actual results against the planned performance criteria detailed in the corporate plan.[20]

1.39      In assessing the 2015–16 annual reports the committee examined the corporate plans of Commonwealth entities and their performance criteria in relation to the body achieving its purpose. As required in section 16E of the PGPA Rule, corporate plans are required to be published on agencies websites by the last day of the second month of the reporting period of which the plan is prepared. The committee notes that while most entities had corporate plans published on their websites for the 2016–17 period, the Digital Transformation Office, Torres Strait Regional Authority, Aboriginal Hostels Limited and the Commonwealth Superannuation Corporation did not publish corporate plans. The committee acknowledges that while corporate plans were not submitted by some entities the annual reports for the period provided annual performance statements against existing portfolio budget statements. The committee continues to encourage the publication of corporate plans as a guide to evaluate the performances of Commonwealth entities.

Senate debate

1.40      In accordance with Standing Order 25(20)(d) the committee is required to take into account any relevant remarks about the reports made in debate in the Senate. The committee notes that none of the annual reports examined in this report have been the subject of comments or debate in the Senate.

Non–reporting bodies

1.41      Standing Order 25(20)(h) requires that the committee inquire into, and report on, any bodies which do not present annual reports to the Senate but should present such reports.

1.42      The committee makes no comment in relation to any bodies not presenting an annual report.

Assessment of reports

1.43      Under Standing Order 25(20)(a), the committee is required to examine the annual reports of departments and agencies and report to the Senate on whether they are 'apparently satisfactory'. In its examination of the annual reports referred, the committee found them to be of a satisfactory standard and the relevant requirements adhered to. Therefore the committee considers all the reports examined to be 'apparently satisfactory'.

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