Reference
1.1
Under Senate Standing Order 25(20), the annual reports of departments and agencies under the Senate Foreign Affairs, Defence and Trade Legislation Committee's (the Committee) allocated portfolios stand referred to the Committee for examination and report.
1.2
Standing Order 25(20)(f) requires the Committee to 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. On this occasion, the Committee has chosen to examine all reports tabled from 1 May 2021 to 30 April 2022 in one report.
1.3
Copies of this and other committee reports can be obtained from the Senate Table Office or online at the committee's webpage.
Terms of reference
1.4
Under Standing Order 25(20) the Committee is required to:
(a)
Examine each annual report referred to it and report to the Senate whether the report is apparently satisfactory.
(b)
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.
(c)
Investigate and report to the Senate on any lateness in the presentation of annual reports.
(d)
In considering an annual report, take into account any relevant remarks about the report made in debate in the Senate.
(e)
If the committee so determines, consider annual reports of departments and budget-related agencies in conjunction with examination of estimates.
(f)
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.
(g)
Draw the attention of the Senate to any significant matters relating to the operations and performance of the bodies furnishing the annual reports.
(h)
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
1.5
In accordance with the resolution of the Senate on 4 July 2019, the Committee has oversight of the following portfolios:
Defence, including Veterans' Affairs; and
Foreign Affairs and Trade.
Role of annual report
1.6
The key purpose of annual reports is accountability through informing the Parliament of the performance of public sector departments, agencies, companies and statutory office holders. Annual reports are a key publication under the Commonwealth performance framework. The Department of Finance (Finance) in its resource management guides sets out the purpose of annual reports of Commonwealth entities and companies:
The report [of a Commonwealth entity] provides a broad statement of an entity's capability and performance, including results against targets published previously for the corresponding year in the Portfolio Budget Statements. It allows accountable authorities to report to their minister on the efficiency and effectiveness of the public administration that the minister is ultimately responsible for.
The primary purpose of annual reports of companies is accountability. They service to inform the Parliament (through the responsible Minister), other stakeholders, educational and research institutions, the media and the general public about performance of companies in relation to activities undertaken. Annual reports are also a key reference document and a document for internal management. They also form a critical part of the historical record.
Reports examined
1.7
During the period 1 May 2021 to 30 April 2022, 24 annual reports of bodies/office holders were presented to the Parliament and referred to the Committee for examination. Reports examined included those from the categories of bodies under the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and those which are prepared by statutory offices or office holders under the relevant establishing legislation. These annual reports are listed in Appendix 1.
Assessment of annual reports
1.8
Senate Standing Order 25(20) requires the Committee to examine reports referred to it to determine whether they are timely and 'apparently satisfactory'. The Committee considers whether the reports comply with the relevant legislation and reporting requirements for the preparation of annual reports in forming its assessment.
Annual reporting requirements
Public Governance, Performance and Accountability Act 2013
1.9
The PGPA Act is the legislative basis of the Commonwealth performance framework which governs how the Commonwealth public sector uses and manages public resources. It sets out the key requirements for governance, performance reporting and accountability required of Commonwealth entities and companies. A brief description of the different governance structures of these bodies for the purposes of the PGPA Act is set out in Appendix 2, which provides a summary of annual reporting requirements.
Annual reports
1.10
Section 46 of the PGPA Act sets out the annual reporting requirements in relation to Commonwealth entities, which states that annual reports must comply with any requirements prescribed by rules. Section 97 sets out the annual reporting requirements for Commonwealth companies, including those of the Corporations Act 2001 and any additional information prescribed by the rules.
Corporate plans and annual performance statements
1.11
The Commonwealth performance framework also includes the requirement for Commonwealth entities and companies to prepare and publish corporate plans each year, pursuant to sections 35 and 95 of the PGPA Act. Under section 39 of the PGPA Act, Commonwealth entities must prepare an annual performance statement and include this statement in the annual report. Entities use the annual performance statement to report on results achieved against the targets, goals and measures established at the beginning of a reporting year in its corporate plan, in addition to key performance indicators set out in portfolio budget/additional estimates statements.
Public Governance, Performance and Accountability Rule 2014
1.12
The Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) sets out the detailed mandatory requirements for the preparation of corporate plans, annual performance statements and annual reports for Commonwealth entities and, where relevant, Commonwealth companies.
1.13
The Department of Finance (Finance) publishes resource management guides (RMGs) for Commonwealth entities on a wide range of topics, including on the annual reporting obligations under the PGPA Act and mandatory requirements for the content of annual reports as prescribed by the PGPA Rule.
Changes to the PGPA Rule
1.14
The Committee notes amendments to the PGPA Rule which applied to annual reports for the reporting period beginning on or after 1 July 2020 in relation to the inclusion of performance information for a Commonwealth company; and enhanced disclosure of consultancy and non-consultancy contracts for non-corporate Commonwealth entities.
1.15
Item 13 of the Public Governance, Performance and Accountability Amendment (2020 Measures No. 1) Rules 2020 inserted new paragraph 28E(aa) requiring the annual report for a Commonwealth company to include in its annual report:
…the results of a measurement and assessment of the company's performance during the period, including the results of a measurement and assessment of the company's performance against any performance measures and any targets included in the company's corporate plan for the period…
1.16
The Explanatory Memorandum noted that this amendment was:
…required as a consequence of the amendments made to section 16E and 27A [which set out the requirements for the corporate plans for Commonwealth entities and companies respectively]. The amendment is intended to clarify the existing requirement for Commonwealth companies to report, in their annual report, the actual performance of companies in the annual report against the planned performance information outlined in their corporate plans.
1.17
The Public Governance, Performance and Accountability Amendment (Consultancy and Non-consultancy Contract Expenditure Reporting) Rules 2020 amended the PGPA Rule to require non-corporate Commonwealth entities to disclose in annual reports the number of, and expenditure on, consultancy and non-consultancy contracts and additional information about those organisations receiving that expenditure.
1.18
This amendment implements Recommendation 38 of the Independent Review into the operation of the PGPA Act and Rule which recommended enhanced disclosure of consultancy and non-consultancy contracts in non-corporate Commonwealth entities’ annual reports. While this rule change takes effect from 2020-21, entities were encouraged to make the additional disclosures in their 2019-20 annual reports if they were in a position to do so.
Statutory office holders and statutory bodies
1.19
Statutory office holders are engaged or employed under an Act which may prescribe annual reporting requirements pursuant to the office. It is also noted that there may be reporting requirements in the enabling legislation for statutory bodies (which may also be Commonwealth entities).
Non-Statutory bodies
1.20
Non-statutory bodies (NSBs) are established by a Minister and are not pursuant to a statute. Annual reporting requirements for NSBs are contained in the government response to the Senate Standing Committee on Finance and Public Administration Report on Non-Statutory Bodies, dated 8 December 1987.
Timeliness
1.21
Under Standing Order 25(20)(c), the Committee must report to the Senate any lateness in the presentation of annual reports. The Committee notes that different reporting timeframes apply to different categories of bodies. These are set out in detail in Appendix 3.
Review of timeliness of reports examined
1.22
Standing Order 25(20)(c) requires the Committee to investigate and report to the Senate on any lateness in the presentation of annual reports. The Committee considers the timely presentation of annual reports to the Parliament an important element of accountability.
1.23
Appendix 1 lists the annual reports tabled between 1 May 2021 and 30 April 2022 which sit under the Committee's allocated portfolios. This table includes the dates the reports were tabled in the Senate (or received by the President out of session) and the House of Representatives. For the purposes of the Committee's examination of timeliness, the earlier date is taken as the presentation date to the Parliament; however, it is noted that some reports were not necessarily tabled in both Houses within the required timeframe. The table also includes the dates the reports were submitted to, and received by, the Minister, if available.
1.24
There are two elements regarding the timeframe for the preparation and presentation of annual reports: the provision of the report to the Minister and the presentation of the report to the Parliament. Both of these elements were examined by the Committee in investigating any lateness in presentation of the annual reports.
Commonwealth entities and companies
1.25
All of the 2020-21 annual reports of Commonwealth entities and companies examined except one, met the relevant required date for the provision of the report to the Minister. The report of the RAAF Veterans’ Residences Trust 2020-21 was provided to, and received by, the Minister on 20 October 2021, not meeting the 15 October deadline for a corporate Commonwealth entity.
1.26
All of the 2020-21 annual reports of Commonwealth entities except one were presented in at least one house of the Parliament before 31 October, with the Australian War Memorial’s report being presented in the Senate on 4 November 2021. This was disappointing given that the report was submitted to, and received by, the Minister, on 24 September 2021.
1.27
In relation to the reports of Commonwealth companies, all reports were provided to the responsible minister before the end of October. The AAF Company report was subsequently tabled on 21 October, just over a month after receipt; the RAAF Welfare Recreational Company report was tabled on 28 October, just over a week after receipt; and the report of the Strategic Policy Institute was tabled slightly over a month after receipt on 29 November.
1.28
Seven annual reports were presented in the Parliament after the commencement of the Committee’s Supplementary Budget Estimates hearings held on 27 and 28 October 2021. However, it is noted that the Australian Trade and Investment Commission’s report was tabled in the House of Representatives on 27 October and was therefore available at the time of their appearance on 28 October. The Committee appreciates those bodies and the relevant ministers whose annual reports were presented to the Parliament before the Supplementary Budget Estimates hearings, particularly those bodies presenting their reports early enough to allow sufficient time for examination before the hearings.
Statutory offices/office holders
1.29
As set out in Appendix 3, the legislative tabling requirements for the annual reports of statutory offices/office holders under the Committee’s oversight are less prescriptive than those for PGPA Act bodies in both content and tabling timeframe. While the Minister, upon receipt of the annual report, must present the report to the Parliament within 15 sitting days; the requirement to prepare and furnish the report to the Minister is ‘as soon as practicable’ or ‘as soon as possible’ after the end of the reporting period. It is also noted that in the absence of specific provisions, subsection 34C(2) of the Acts Interpretation Act 1901 may apply which requires bodies to present annual reports to ministers within six months after the end of the period reported upon.
1.30
For the reports examined, the timeliness in regard to the provision of the reports to the Minister varied from within three months after the end of the reporting period in the case of the reports for the Veterans’ Review Board and the Australian Safeguards and Non-proliferation Office; over four months for the report of the Director of Military Prosecutions; and for over six months for the report of the Judge Advocate General. In all four cases, the Minister is commended for meeting the required timeframe of presenting the report in both houses of the Parliament within 15 sitting days.
1.31
As noted in paragraph 1.15 of Appendix 3, that while there is no legislative requirement to table an annual report, the Repatriation Medical Authority has again prepared a report for the 2020-21 year. The Committee welcomes for the timely preparation and tabling of the Authority’s report which was submitted to the Minister on 4 October 2021 and tabled in the House of Representatives on 21 October 2021.
Schedule of Special Purpose Flights
1.32
The Committee continues to monitor the timeliness in the tabling of the reports on the schedule of special purpose flights and notes an improvement in the tabling time of the most recent report. The Schedule of Special Purpose Flights 1 July to 31 December 2020 was presented in the Senate on 28 June 2021, which meets the requirements for this report which covers the six months ending the previous 31 December to table in June the following year, in accordance with the Guidelines for the Use of Special Purpose Aircraft.
Senate debate
1.33
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 at the time of preparing this report.
Non–reporting bodies
1.34
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. The Committee makes no recommendation for any bodies not presenting an annual report to do so.
Assessment of reports
1.35
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 largely adhering to relevant requirements. The Committee considers the reports examined to be 'apparently satisfactory'.