Chapter 2


Chapter 2

Annual Report of Statutory Authorities

2.1        The following reports of statutory bodies for the financial year 2007-08 were referred to the committee for examination and report:

  • Aboriginal and Torres Strait Islander Social Justice Commissioner—Native title report

  • Aboriginal and Torres Strait Islander Social Justice Commissioner—Social justice report

  • Australian Commission for Law Enforcement Integrity

  • Australian Customs Service

  • Australian Federal Police

  • Australian Transaction Reports and Analysis Centre (AUSTRAC)

  • CrimTrac Agency

  • Director of Public Prosecutions

  • Family Law Council

2.2        On this occasion the committee decided to examine the annual reports of Australian Federal Police and the Australian Transaction Reports and Analysis Centre in more detail.

Australian Federal Police

2.3        The Australian Federal Police (AFP) reported that it had effectively met operational challenges for the year under review.[1]  The AFP's performance information was well presented, and included a summary table of results against performance indicators for outputs under Outcome 1. The AFP achieved set targets for all but one output group, and was very close to meeting this outstanding target.

2.4        The overall level of business satisfaction with the AFP by its clients had increased slightly to 81 per cent in 2007-08.[2]

2.5        Amongst the range of AFP operations during the year highlighted by the Commissioner was the establishment of the National Community Engagement Strategy.[3] The strategy operates within the National Action Plan to Build on Social Cohesion, Harmony and Security. 

2.6        The report sets out the key elements of the strategy as:

  • engaging community leaders and explaining the role of the AFP;

  • identifying needs and vulnerabilities, de-conflicting misconceptions and engaging individuals and community groups at risk of radicalisation; and

  • developing a relationship of trust between the AFP and Islamic communities.[4]

2.7        The committee looks forward to updates on this initiative in the future.

2.8        The AFP reported an operating deficit of $43.5 million for the 2007-08 financial year which compared to an approved deficit of $43 million.  The deficit was attributed in part to a write off of expenditure associated with Anzac Park West and a provision for the anticipated costs of exiting the lease for Anzac Park West totalling $21.7million.[5]  These two items account for only approximately half of the total deficit and a more detailed description which included other components would have been a useful inclusion, given the size of the deficit.

2.9        The committee was able to obtain more detail on the operating deficit during examination of the AFP during the public hearing for the additional estimates 2008-09 on 23 February 2009.  The AFP indicated that 'the $43 million loss was identified a little over half way through the financial year'.[6] In addition to the items listed above, the committee learned other significant components of the operating deficit included Anzac Park West rent of $5.3 million and provision for redundancy expenditure of $7.6 million.[7]

2.10      The Commissioner noted in the Executive Review that a levelling off of the budget situation occurred during 2007-08 after six years of significant growth.[8]  Further detail was supplied later in the report where it was noted that the AFP's revenue base had increased from $509 million in 2001-02 to over $1.2 billion for 2007-08, with National Security and the International Deployment Group identified as areas with the most funding growth.[9]

2.11      The total number of AFP staff had increased by 278 to 6598 at 30 June 2008.  The overall staff attrition rate for the AFP for 2007-08 was 6.7 per cent, down from 8.3 per cent in the previous year.[10] 

2.12      The financial notes attached to the report included a provision of approximately $7.6 million for proposed redundancies and separations in 2007-08, but the report did not elaborate.  The committee was able to ascertain more detail during examination of the AFP during the additional estimates 2008-09 hearing on 23 February 2009.[11]

2.13      The committee noted that the report included coverage of recent reviews of the AFP's (and other national security agencies) operations in relation to national security and counter-terrorism operations.  

2.14      The report referred to the review by the Honourable Sir Laurence Street AC KCMG QC which examined the interoperability between the AFP and its national security partner agencies.[12]  This review was commissioned as a result of an unsuccessful prosecution of a terrorism related case and reported on 29 February 2008.  The annual report noted that all ten recommendations were accepted by the AFP and were in the process of being implemented in conjunction with the Australian Security Intelligence Organisation and the Commonwealth Director of Public Prosecutions.[13]  The committee will anticipate future reports on the progress of implementation of these recommendations.

2.15      The report also made reference to the Government established inquiry into the conduct of Operation Rain which investigated Australian links to the attempted terrorist attacks in London and the attack on the Glasgow airport in June 2007.[14]  This inquiry was conducted under the direction of the Honourable John Clarke QC and the public report was released on 23 December 2008.

2.16      The committee considers the report of the AFP to be 'apparently satisfactory'.

Australian Transaction Reports and Analysis Centre

2.17      During 2007-08 a major focus for the Australian Transaction Reports and Analysis Centre (AUSTRAC) was the continued implementation of reforms under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), which came into effect in December 2006.  The report noted that by the end of 2008 all obligations under the first tranche of the AML/CTF Act will be in place.[15]

2.18      Under the expanded regulatory regime a priority for the agency was the continuation of outreach initiatives to the expanded regulated population.[16]  It was noted that under the new Act, AUSTRAC had identified over 15,000 entities with obligations under the new system.[17]  The outreach program included over 400 presentations to regulated entities and the launch of a new e-learning program to reflect the requirements of the AML/CTF Act.[18]

2.19      During 2007-08 AUSTRAC reported that the total intelligence products provided to domestic agencies increased by 10 per cent from the previous year and exchanges of information with overseas financial intelligence units increased by 44 per cent.[19]

2.20      There was a reported increase in reporting to AUSTRAC with the number of financial transaction reports (FTRs) submitted by regulated entities up by 14.13 per cent on the previous financial year.  AUSTRAC received almost 18 million FTRs from regulated entities. It was noted that the growth included a 19 per cent increase in the number of suspicious transaction reports submitted.[20]  These increases were attributed to an increase in the number of regulated entities, an increased awareness of reporting obligations by regulated entities and increase in financial activity within the economy.[21]

2.21      AUSTRAC reported this year under a revised output structure.  The agency has moved from five output groups to two which directly reflect AUSTRAC's dual role as Australia's AML/CTF regulator and financial intelligence unit.[22]  The presentation of performance information included a detailed description of achievements under each output and account of how the agency performed in relation to qualitative and quantitative performance indicators.

2.22      Staff numbers at AUSTRAC increased by over 30 per cent in 2007-08.  As at 30 June 2008 there were 315 full-time and 20 part-time employees, and 73 contractors.  This significant increase in staff numbers was attributed to the agency's increased responsibilities as Australia's AML/CTF regulator.[23]

2.23      AUSTRAC reported a net operating result of $0.39 million deficit for 2007-08.  This compared to a $0.38 million surplus last financial year.  There was a considerable increase in revenue of $17.7 million, with a total of $53.2 million for the financial year.[24]

2.24      The committee considers the report of AUSTRAC to be 'apparently satisfactory'.

Navigation: Previous Page | Contents | Next Page