Chapter 2 - Annual reports of departments

Department of Defence

2.1              The Defence Annual Report 1995-1996 was tabled in the Senate on 30 October 1996.

2.2              In its Scrutiny of Annual Reports No. 1 of 1996, the Committee found the Department of Defence report for 1994-95 to be well organised and thorough in its coverage of Defence activities. However, criticisms were made of the standard of performance reporting in the volume.[1] The 1995-96 report again presents as a well organised document but this time is improved by the Department's enhanced program evaluation.

2.3              This improvement is seen in the expanded content of the introductory Part: 1 Overview. The first section of this Overview contains the Defence Mission and Vision statements and provides the reader with a concise introduction to current Defence policy, explaining the generation of Australia's strategic concerns against the background of regional and world events. The eight objectives necessary to realise the Defence 'mission' and 'vision' and to provide a long term direction and focus for the Department's day-to-day activities are also identified.[2] In the second section of the Overview, 'Key Developments and Achievements', Defence program initiatives are broadly tested against these objectives and overall operational successes and problems experienced during the reporting period are discussed.

2.4              The Committee's assessment of detailed performance information, against objectives and performance measures, was aided by the explanation in the Overview of the relationship of Department objectives to policy and programs. This is a notable improvement on reporting in the previous Defence Annual Report.[3] Performance measures provide criteria for qualitative and quantitative assessment while outcomes describe strategies for implementation and, in most cases, assess the degree of success of these strategies. The Committee commends the Department for this evolution in its performance reporting and, particularly, in its formulation of performance measures.

2.5              Closer examination of Part 2 of the report, however, reveals omissions in discussion of some performance outcomes. During the Budget and Supplementary Estimates hearings of Spring 1996, extensive questions were asked on sexual harassment, women's issues and child care arrangements in the Defence Forces. In most cases, the requested breakdowns of information were not present in the draft report nor in the PBS. In the final report, although equity issues are broadly addressed for each service, discussion of these subjects is minimal.

2.6              Moreover, the outcomes of a number of major internal reviews concluded during the reporting period and the impacts on these matters, are either not described or are given scant attention in the report. For example, the results of the major review of the role of the Divisional System in the Navy and the review of the management of the RAN's Tactical Electrical Warfare Support Section (RANTEWSS), both of which impacted on the handling of harassment cases in the Services, are not apparently recorded in the report. Similarly, an important report on barriers to women's career advancement in the ADF, 'Women in the Australian Defence Force', is merely described as 'completed', without any further details provided.

2.7              The Committee also noted that the results of some external inquiries which impacted on program outcomes were not referred to in performance statements.[4] While a number of sub-programs do report these effectively, the Committee observed that the ongoing consideration of the results of the Defence Ombudsman's inquiry into the incidence of sexual harassment in the Air Force, impacting on Air Force personnel branch outcomes, is not cited at the relevant point in the report.

2.8              The Committee recommends that the Department address these omissions when reporting performance outcomes in future annual reports. Unless important internal and external scrutiny mechanisms are reported, with the impact of their recommendations on program initiatives described at the appropriate place, the report is not giving the 'balanced and candid account of both successes and shortcomings' which the reporting requirements demand.[5]

2.9              On a more positive note, the Committee observes that, in contrast to sections of the previous report, there is a correlation between statistics provided in the text and tables in the report, although some criticisms about the layout of the tabular material were made at the Budget Estimates hearings 1996.[6] The report also has comprehensively complied with requirements for appendices. Accompanying the report is a substantial volume of Defence Information on Request which is complete, although cross-references to the annual report were not accurate. This presentational problem was also noted in the report itself where there was inaccurate page attribution in parts of the table of contents and in the index.

2.10          Overall, the Department has complied with requirements for departmental annual reports in a publication which, despite some omissions, shows a marked improvement in the formatting and cogency of its performance reporting.

Foreign Affairs and Trade

2.11          The Foreign Affairs and Trade Annual Report 1995-96 was tabled in the Senate on 29 October 1996.

2.12          The Department has produced an attractive and well-structured report providing a comprehensive coverage of its activities during 1995-96. The text is supported by tables and graphs providing clear visual explanation, well integrated into the report.

2.13          The report is an improvement on the one for 1994-95, most notably having consistent organisation of information throughout the volume. An important feature of the report's new format is the listing of performance measures for each program or sub-program, where appropriate.[7] These measures are then addressed in a 'Performance Summary' which in turn is explained, point by point, in the following detailed account of branch initiatives and achievements. The Committee congratulates the Department on this greater degree of compliance with the requirements for performance reporting and, in particular, for its formulation of performance measures which accurately interpret program functions.

2.14          It is disappointing to note, therefore, that reporting on equity matters are not evidently integrated into the new format. In the report's Social Justice and Equity overview, the Department records the formal approval of its new Equal Employment Opportunity program for 1995-98. The program aims to more effectively evaluate the EEO performance of the Department's posts, divisions and offices by assessing them against performance measures designed to address EEO sub-program objectives. The new program also provides qualitative indicators against which employment and career development of EEO identified groups can be assessed.

2.15          On turning to Sub-program 5.2.1¾Personnel, however, the Committee noted that while the Department presents an impressive profile of EEO activities and achievements it fails to articulate the new measures or to assess achievements against them. Nor is there evidence that these EEO indicators have impacted upon measures used to assess performance outcomes in other relevant sub-programs of the report. The Committee would like to see outcomes assessed against these indicators in future annual reports so that reporting requirements for Department social justice and equity outcomes are fully met.[8] A further weakness of the report is the less than candid discussion of areas where problems have occurred.

2.16          The Committee is pleased to observe that some recommendations made on the draft annual report at the Budget Estimates hearings 1996 have been implemented in the final report, thus improving Department accountability in a number of instances. In particular, a Committee member noted that the draft report omitted discussion of Market Australia, a program designed to promote and disseminate information about Australian industry achievements in East Asia, and which had terminated on June 1996.[9] In the final report, the outcomes of the program are now recorded and assessed under Sub-program 1.9.4. Discrepancies between outlay figures on services to Australian government agencies were also noted at the hearings but these too have been corrected.[10]

2.17          Suggestions were also made for inclusion of new material in future annual reports. While reporting on AusAID Non-government Organisations (NGOs) activities presents a good example of external scrutiny reporting, a Committee member suggested that reporting might be improved if a list of NGOs were included as an appendix to the next annual report, if this was feasible.[11] Another member requested that the annual report should also record savings projected to be made on delivery of Department IT platforms.[12]

2.18          The Committee considers that, on the whole, the Department of Foreign Affairs and Trade has submitted an annual report which meets the Requirements (1994). The Department has worked to produce an informative account of its activities with improved, and more consistently formatted, performance reporting throughout. The degree of compliance with the requirement for 'candid and balanced' performance reporting could, however, be enhanced by fuller and more objective assessment of the outcomes of program projects and initiatives, especially those that the Department itself identifies as being of strategic importance to Australian interests.

Repatriation Commission and the Department of Veterans' Affairs

2.19          The Annual Reports of the Repatriation Commission and the Department of Veterans' Affairs 1995-1996 were tabled as a single volume in the Senate on 29 October 1996.

2.20          The reports of the Defence Services Homes Scheme and the Office of Australian War Graves are contained in the Department of Veterans' Affairs report. A financial statement on the operation of the Lady Davidson Repatriation Hospital is presented as an appendix while the operational report of the Repatriation Hospital is included in the Health Program segment of the report.

2.21          Last year, the Department and Commission's report received the Institute of Public Administration Australia (IPAA) Award for the best annual report of the 1994-95 reporting period. It was highly commended for its performance reporting, particularly for aiming to provide a context for judging current performance (previous trends) and for explanation of changes in performance.

2.22          In the 1995-96 reporting period the Department implemented major changes, particularly in the compensation claims, medical and counselling services areas. At the same time, it was subject to the new Government's funding cut of 2 per cent in running costs, across the board. Explanations of Department restructuring and of the resulting generation of new program initiatives, reported to be evolving in response to changing client needs, are comprehensive.[13] For each sub-program tables integrated into the text of the report provide budget summaries for the 1994-95 and the current reporting period and show savings which go to meet funding reductions. Targets set in 1994-95 have invariably been met or substantially progressed, including improvements in program delivery. Outsourcing and partnerships with the private sector have advanced Government directives.

2.23          The Committee commends the Department on its obvious achievement and competent explanation of the issues, well interpreted by strategically placed diagrams and charts. A criticism is that the reporting of any operational problems encountered when implementing change is minimal.

2.24          In August 1996, the Australian National Audit Office reported on the reform of a major repatriation program handled by the Department.[14] The ANAO recommended that the Department further develop its program reporting, particularly its performance indicators, so that the results of program reforms could be more effectively evaluated in the Department's 1995-96 annual report. The Department undertook to do this.[15]

2.25          The Department has met these expectations in this reporting period, by developing more focussed performance indicators to assess Department outcomes. However, the Committee notes that these are presented in a separate section of the report ('Performance and Outcomes') away from the explanation of program objectives and descriptions. This makes assessment of the measures against the objectives difficult.

2.26          The Committee considers the Annual Reports of the Repatriation Commission and Veterans' Affairs 1995-96, as a whole, to be a comprehensive document that meets fully the Requirements for Department Annual Reports.

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