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 first report on annual reports for 2018 and provides an overview of selected annual reports for the 2016–17 financial year presented to the Parliament between 1 May 2017 and 31 October 2017. Copies of this and other committee reports can be obtained from the Senate Table Office 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 has responsibility for the oversight of the following portfolios:

• Parliament;
• Prime Minister and Cabinet Portfolio (PM&C Portfolio); and
• Finance Portfolio.

Performance Reporting Framework

1.5      The Public Governance, Performance and Accountability Act 2013 (PGPA Act) established a performance reporting framework for all Commonwealth entities and companies.

1.6      Section 38 of the PGPA Act requires all Commonwealth entities to measure and assess their performance.

1.7        The performance framework provides for performance planning, measurement and reporting by an entity through planned performance information presented in the Portfolio Budget Statements (PBS) and corporate plan, and then reported in the annual report, which includes an annual performance statement.

1.8      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]

1.9      The Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) supports the implementation of the PGPA Act and outlines the requirements of annual reports for Commonwealth entities.

Requirements for Annual Reports

1.10      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 are a key document under the Commonwealth performance framework and are 'the primary document through which responsible Ministers report to the Parliament on the actual performance of entities'.[4]

1.11         Below is a summary of the legislative authority and requirements for the preparation of annual reports by different types of Commonwealth bodies:

• Non-corporate Commonwealth entity[5]—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);
• Corporate Commonwealth entity[6]—PGPA Act, section 46 and the PGPA Rule, Division 3A(B);
• Commonwealth company[7]—PGPA Act, section 97, which also refers to requirements under the Corporations Act 2001 and the PGPA Rule, Part 3–3;
• Statutory office holders and statutory bodies—statutory office holders are engaged or employed under an Act, which may prescribe annual reporting requirements pursuant to the office. It should be noted that there may be reporting requirements in the enabling legislation for statutory bodies (which may also be a Commonwealth entity);[8] and
• Non-statutory bodies—non-statutory bodies (NSBs) are established by a Minister and are not pursuant to a statute. Guidelines for the preparation of annual reports for NSBs are contained in the government response to the Senate Standing Committee on Finance and Public Administration Report on Non-Statutory bodies. [9]

1.12      In addition to legislative requirements, the Department of Finance (Finance) provides guidance material for Commonwealth entities' and companies' which provide further detail on the content requirements for annual reports under the Commonwealth performance framework in accordance with the PGPA Act and PGPA Rule.[10] The material available from this website includes the following:

• Resource Management Guide No. 135—Annual reports for non-corporate Commonwealth entities;
• Resource Management Guide No. 136—Annual reports for corporate Commonwealth entities; and
• Resource Management Guide No. 137—Annual reports for Commonwealth companies.

Reports examined

1.13         In accordance with Standing Order 25(20)(f), this report examines annual reports tabled between 1 May 2017 to 31 October 2017. Twenty-six 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

Parliamentary departments

• Department of the Senate—Report for 2016–17
• Department of Parliamentary Services—Report for 2016–17
• Parliamentary Budget Office—Report for 2016–17

Departments of State

• Department of the Prime Minister and Cabinet—Report for 2016–17
• Department of Finance—Report for 2016–17

Agencies

• Australian National Audit Office—Report for 2016–17
• Office of the Commonwealth Ombudsman—Report for 2016–17
• Office of the Inspector-General of Intelligence and Security—Report for 2016–17
• Office of the Official Secretary to the Governor-General—Report for 2016–17
• Australian Electoral Commission—Report for 2016–17
• Future Fund Board of Guardians and Future Fund Management Agency—Report for 2016–17

Corporate Commonwealth entities

• Central Land Council—Report for 2016–17
• Indigenous Business Australia—Report for 2016–17
• Indigenous Land Corporation—Report for 2016–17
• Northern Land Council—Report for 2016–17

Commonwealth companies

• National Australia Day Council—Report for 2016–17
• Aboriginal Hostels Limited—Report for 2016–17
• ASC Pty Ltd—Report for 2016–17
• Australian Naval Infrastructure Pty Ltd—Report for 2016–17

Statutory office holders/offices

• Parliamentary Service Commissioner—Report for 2016–17, including report of the Parliamentary Service Merit Protection Commissioner
• Remuneration Tribunal—Report for 2016–17
• Executive Director of Township Leasing—Report for 2016–17
• Australian Public Service Commissioner—Report for 2016–17, incorporating the annual report of the Merit Protection Commissioner
• Independent Parliamentary Expenses Authority—Report for 2016–17

Reports not examined

1.14         The committee is not obliged to examine reports on the operation of Acts, policy papers, budget documents or corporate plans. 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:

• Independent National Security Legislation Monitor—Report No. 1—September 2017—Review of Division 3A of Part 1AA of the Crimes Act 1914: Stop, Search and Seize Powers.
• Independent National Security Legislation Monitor—Report No. 2—September 2017—Sections 119.2 and 119.3 of the Criminal Code: Declared Areas
• Independent National Security Legislation Monitor—Report No. 3—September 2017—Review of Divisions 104 and 105 of the Criminal Code (including the Interoperability of Divisions 104 and 105A): Control Orders and Preventative Detection Orders
• Indigenous Business Australia—Corporate Plan 2017–18 to 2020–21
• Final Budget Outcome 2016–17—Report by the Treasurer and Minister for Finance
• Clean Energy Finance Corporation—Report for 2016–17 (Also referred to the Environment and Communications Legislation Committee)
• Moorebank Intermodal Company Limited—Report for 2016–17 (Also referred to the Rural and Regional Affairs and Transport Committee)

Timeliness

1.15      The PGPA Act requires Commonwealth entities (corporate and non-corporate) 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.[11]

1.16      This section of the Act, however, does not provide a timeframe for the Minister to present the report to the Parliament. The Finance Resource Management Guides, advise:

It has been practice for the responsible Minister to present the report to each house of the Parliament on or before 31 October.[12]    

1.17      Under section 97(2) 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.

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

(5) 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.

1.19      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). [13]

1.20      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.[14]

Timeliness of reports examined

1.21      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 offices to endeavour to meet relevant timeframes.

1.22      Appendix 1 lists the annual reports tabled (or presented) in Parliament between 1 May 2017 and 31 October 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 the relevant Minister.

1.23      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.

1.24      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 2017. Two entities that did not meet this requirement included Moorebank Intermodal Company and Clean Energy Finance Corporation. All entities met the guidelines of best practice that require an entity to present the report to at least one House of Parliament on or before the 31 October.[15]

1.25      The committee continues to encourage Ministers and agencies to present annual reports in sufficient time for examination by Senators before Supplementary Budget Estimates hearings. The committee commends those who tabled annual reports before the commencement of Supplementary Budget Estimates 2017–18 on 23 October 2017.

Senate debate

1.26      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

1.27      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.

1.28      The committee makes no recommendation for any bodies not presenting an annual report to do so.

Assessment of reports

1.29      Under Standing Order 25(20)(a), the committee is required to examine the annual reports of departments and agencies referred to it and report to the Senate on whether they are timely and 'apparently satisfactory'.  In order to make an assessment of the reports, the committee must consider whether the reports comply with the relevant legislation and guidelines. The committee considers all reports examined to be 'apparently satisfactory'.

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