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Foreign Affairs, Defence and Trade Legislation Committee—Reports on annual reports referred to legislation committees—No. 1 and 2 of 2022, dated June 2022


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June 2022

The Senate

Foreign Affairs, Defence and Trade Legislation Committee

Annual reports (No. 1 and No. 2 of 2022)

© Commonwealth of Australia 2022

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Committee Members

Chair Senator the Hon Eric Abetz LP, TAS

Deputy Chair Senator Kimberley Kitching (1 May 2021 to 10 March 2022) ALP, VIC

Members Senator the Hon Tim Ayres ALP, NSW

Senator the Hon David Fawcett LP, SA

Senator the Hon Concetta Fierravanti-Wells LP, NSW

Senator Jacqui Lambie JLN, TAS

Senator Tony Sheldon ALP, NSW

Secretariat Mark Fitt, Committee Secretary Lyn Beverley, Committee Secretary Margaret Cahill, Research Officer Shannon Ross, Administrative Officer

Committee Webpage: http://www.aph.gov.au/senate_fadt

PO Box 6100 Phone: + 61 2 6277 3535

Parliament House Fax: + 61 2 6277 5818

Canberra ACT 2600 Email: fadt.sen@aph.gov.au

Australia

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Table of Contents

Committee Members ........................................................................................................................ iii

Chapter 1—Introduction .................................................................................................................... 1

Chapter 2—Overview of the annual reports examined ............................................................... 9

Appendix 1—Dates relating to the presentation of reports between 1 May 2021 and 30 April 2022................................................................................................................................. 15

Appendix 2—Summary of annual reporting requirements ...................................................... 17

Appendix 3—Annual reporting timeframes ................................................................................ 19

1

Chapter 1 Introduction

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.

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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.1

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.2

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.3

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

1 Journals of the Senate, No. 3, 4 July 2019, pp. 83-84. This resolution was subsequently amended on

13 February 2020, 12 May 2021 and 21 October 2021; however, the amendments did not relate to these portfolios. See Journals of the Senate, No. 42, 13 February 2020, pp. 1268-69, Journals of the Senate, No. 98, 12 May 2021, p. 3445 and Journals of the Senate, No. 125, 21 October 2021, p. 4209.

2 Department of Finance, Resource Management Guide 135, Annual report for non-corporate

Commonwealth entities, https://www.finance.gov.au/government/managing-commonwealth-resources/annual-reports-non-corporate-commonwealth-entities-rmg-135 ( accessed 30 November 2021; and Department of Finance, Resource Management Guide 136, Annual report for corporate Commonwealth entities, https://www.finance.gov.au/government/managing-c ommonwealth-resources/annual-report-corporate-commonwealth-entities-rmg-136 ( accessed 30 November 2021).

3 Department of Finance, Resource Management Guide 137, Annual reports for Commonwealth

companies, https://www.finance.gov.au/government/managing-commonwealth-resources/annual-reports-commonwealth-companies-rmg-137 ( accessed 30 November 2021).

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categories of bodies under the Public Governance, Performance and Accountability Act 2013 (PGPA Act),4 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

4 Appendix 2 sets out the governance structures of the categories bodies which are subject to the

PGPA Act.

4

reporting year in its corporate plan, in addition to key performance indicators set out in portfolio budget/additional estimates statements.5

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;6 and

enhanced disclosure of consultancy and non-consultancy contracts for non-corporate Commonwealth entities.7

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…8

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

5 See paragraph 1.14 which outlines changes to the PGPA Rule 2014 regarding the requirement for

Commonwealth companies to report on performance.

6 See Public Governance, Performance and Accountability Amendment (2020 Measures No. 1) Rules

2020.

7 See Public Governance, Performance and Accountability Amendment (Consultancy and Non-Consultancy Contract Expenditure Reporting) Rules 2020.

8 Public Governance, Performance and Accountability Amendment (2020 Measures No. 1) Rules

2020.

5

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.9

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 1987.10

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.

9 Department of Finance, PGPA Newsletter 60, 18 June 2020.

10 Government response to the Senate Standing Committee on Finance and Public Administration

Report on Non-Statutory bodies, Senate Hansard, 8 December 1987, pp. 2632-45.

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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.

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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.

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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'.

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Chapter 2

Overview of the annual reports examined

2.1 In accordance with Standing Order 25(20)(a), and as noted in paragraph 1.35, the Committee has examined annual reports against relevant legislative and reporting requirements and found them to be ‘apparently satisfactory’. This chapter highlights some of the findings in relation to the annual reports examined.

Performance reporting

Availability of performance framework documents 2.2 The availability of relevant performance framework documents is essential to be able to assess a body’s level of achievement of planned performance. Commonwealth entities and companies are required to set out in their

corporate plan each year how it will achieve its purpose and how its performance will be measured and assessed. For budget funded entities, the portfolio budget statements (PBS) also set out performance information in the delivery of departmental programs. Therefore access to these documents for the relevant financial year is necessary when examining a body’s performance as set out in the annual report.

2.3 While these documents have been primarily located on agencies’ websites, the Government’s Transparency Portal has now become an important repository for PGPA Act performance framework documents. Since the launch of the Transparency Portal website in 2019, the Committee has monitored the availability of the annual report, corporate plan and PBS for the relevant bodies it oversights.

2.4 The 2020-21 annual reports for all Commonwealth entities and companies were available in HTML format on the Transparency Portal and in PDF format on most bodies’ websites. The Australian War Memorial provided its report in PDF format on its website as well as a link to the report in the Transparency Portal. However, the Department of Veterans’ Affairs only provided a link to its 2020-21 report on the Transparency Portal website and did not provide the report in PDF format on its website as it has done in previous years. The availability of annual reports as a complete document in PDF format is an important resource which the Committee hopes to see continue to be available in addition to the HTML format in the Transparency Portal.

2.5 All 2020-21 corporate plans for the bodies whose annual reports were examined were located and available for reference. While not all of the

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corporate plans were easily navigable on an agency’s website,1 they were available on the Transparency Portal website. The availability of these documents on the Transparency Portal going forward, addresses the issue of their continued availability on agencies’ websites, which the Committee has raised with concern in previous reports.2

2.6 All 2020-21 PBSs were also available on the websites for Department of Defence, Department of Foreign Affairs and Trade, and Department Veterans’ Affairs and the Transparency Portal.

‘Clear read’ principle 2.7 Department of Finance guidance on annual performance statements notes the importance of the alignment of the annual performance statement with the corporate plan and the PBS:

Annual performance statements should include information that demonstrates the connection between the corporate plan, PBS and annual performance statements to enable a ‘clear read’ across the three documents.

To achieve this, entities may wish to include a diagram demonstrating how the performance information fits together across the documents, or page number references to the corresponding information in corporate plans and the PBS.

It is good practice for entities to set out the discussion of the achievement of performance in their annual performance statements in the same order as the corporate plan, reinforcing the connection between the documents. Each performance measure should also be expressed in a consistent way to aid the clear read between its planned performance information and performance results.3

2.8 Overall, most annual reports examined demonstrated a ‘clear read’ between the review of performance presented in the annual report and the source documents. As the Committee has noted previously, the inclusion of references in the performance information to the relevant part of the corporate

1 The 2020-21 corporate plans for the Department of Foreign Affairs and Trade and Tourism

Australia could not be navigated to on their respective websites.

2 See for example, Senate Foreign Affairs, Defence and Trade Legislation Committee, Annual Reports

(No. 1 of 2020), February 2020, p.17; and Senate Foreign Affairs, Defence and Trade Legislation Committee, Annual Reports (No. 1 of 2021), February 2021, p. 11.

3 Department of Finance, Resource Management Guide 134, Annual Performance Statements for

Commonwealth Entities, updated 24 February 2022,

https://www.finance.gov.au/government/managing-commonwealth-resources/annual-performance-statements-commonwealth-entities-rmg-134/what-annual-performance-statement (accessed 13 May 2022).

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plan or PBS for each measure assisted in examination of these reports and many reports now incorporate this feature.4

2.9 A number of bodies include numbering for each performance measure which also assists in connecting the result in the annual report. It was noted that the Department of Foreign Affairs and Trade included numbering for each performance measure for the first time in its 2020-21 corporate plan, and which assisted in reviewing the corresponding performance information.

2.10 The Committee noted in its last report which examined the Australian War Memorial’s (AWM) 2019-20 report that there was not a ‘clear read’ between its framework documents. The performance measures set out in the AWM’s 2019-20 Corporate Plan referenced 13 program components, five of which were not listed in the corresponding PBS. The Committee notes that this discrepancy has been addressed in the AWM’s 2020-21 Corporate Plan which includes an explanatory page on the AWM’s program components identifying the five internal components which are linked to performance measures, but do not appear with the eight program components published in the PBS.5 The Committee welcomes this clarification in the AWM Corporate Plan; however, its reporting against performance measures from the corporate plan continued to lack clarity. The AWM performance statement included all performance criteria from the PBS in sequence as set out in the PBS, but did not provide a ‘clear read’ between each measure set out in the AWM’s corresponding corporate plan.

2.11 The inclusion of a summary table or chart of performance results with a clear indicator of the level of achievement providing a snapshot and an accessible overview of performance was a useful feature and was included in several reports. The Committee notes that the Department of Foreign Affairs and Trade’s 2020-21 report included a table summarising performance results which had not been included in recent reports,6 and this was particularly helpful given the large number of performance measures for the department.7

4 See for example the reports of DFAT, Austrade, DVA and Tourism Australia.

5 Australian War Memorial Corporate Plan 2021-25, p. 35.

6 It was noted that DFAT’s annual reports for 2017-18, 2018-19 and 2019-20 did not include a

summary table of performance results.

7 Department of Foreign Affairs and Trade Annual Report 2020-21, pp. 12-15.

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Performance results 2.12 In reviewing the annual reports of Commonwealth entities and companies, the Committee examined whether all performance measures set out in the corporate plan and PBS were reported against in the annual report.8

2.13 While most bodies reported against all planned performance measures in their report’s performance information, there were some instances where results for some measures could not be located. For example, some measures listed in the corporate plans for the RAAF Welfare Recreational Company and the RAAF Welfare Trust Fund did not appear to be reported against in the annual performance statement.

2.14 The Committee was pleased to note that some issues noted in its earlier report regarding the inclusion of all performance measures in the annual reports had been addressed in the 2020-21 reports for some bodies. For example, this year’s reports of the Australian Signals Directorate and the Australian Strategic Policy Institute presented results for all required performance measures from the corporate plan/PBS which the Committee had noted were incomplete in its 2019-20 annual report.9

Australian National Audit Office Performance Statement Audit Pilot Program 2.15 In 2019, the Auditor-General agreed to a request from the Minister for Finance to conduct a pilot program of audits of annual performance statements of Commonwealth entities subject to the PGPA Act in consultation with the Joint

Committee of Public Accounts and Audit with the intent:

…to drive improvements in the transparency and quality of entities’ performance reporting and, in turn, increase entities’ accountability to the Parliament and public.10

2.16 The Department of Veterans’ Affairs (DVA) was one of three departments selected for the pilot program and the Committee previously noted the findings of the assurance audit of its 2019-20 annual performance statements.11 The Australian National Audit Office (ANAO) advised of the continuation of the pilot program for the 2020-21 performance statements of the same departments noting that there was:

8 As noted in Chapter 1, while Commonwealth companies are not required to prepare an annual

performance statement, they are required to include in their annual report the actual performance results achieved against the performance information outlined in their corporate plan.

9 Senate Foreign Affairs, Defence and Trade Legislation Committee, Annual Reports (No. 1 of 2021),

p. 13.

10 Australian National Audit Office website, Annual performance statements audits, updated

17 May 2022, https://www.anao.gov.au/work-program/annual-performance-statements-audits (accessed 18 May 2022).

11 See Senate Foreign Affairs, Defence and Trade, Annual reports (No. 1 of 2021), February 2021, p. 14.

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…improvement during the pilot program in the standard of performance statements preparation and reporting for each of the audited entities, demonstrating that mandated audits of performance statements can drive more transparent and meaningful performance reporting to Parliament.

2.17 The Committee notes the tabling of the Audit report of the 2020-21 annual performance statement - Department of Veterans’ Affairs by the Minister for Finance on 8 April 2022. The Committee also notes that the 2020-21 Annual Performance Statements for DVA were prepared in accordance with the requirements of Division 3 of Part 2-3 of the Public, Governance, Performance and Accountability Act 2013, except for the matters described in the Bases for Qualified Conclusion section of the report regarding the results of two performance measures where the Auditor-General was unable to conclude whether the results reported against were accurate and complete, and supported by appropriate records.12

Compliance indexes 2.18 The PGPA Rule requires all Commonwealth entities and companies to include the list of relevant reporting requirements with details of where those requirements are found in the annual report. Most bodies again satisfactorily

met this requirement and this assisted in the examination of reports. However, there were some instances of missing and incomplete lists.

2.19 The Committee notes that the 2020-21 reports of the Royal Australian Air Force Veterans’ Residences Trust and Navy Canteens did not include a compliance index. This has been a recurring issue and has been noted in earlier reports of the Committee and it hopes to see this issue rectified in future reports.

2.20 Most bodies included exact page number references for the required items but there were some exceptions. For example, the Australian Strategic Policy Institute referred to the relevant chapter in the report for the required information, while the Australian War Memorial referred to the relevant section of the report only. Although not prescribed in the PGPA Rule, the inclusion of precise page references in the list of requirements enhances access to information and assists in the examination of annual reports.

2.21 For the reports of non-corporate Commonwealth entities, all but one report listed all of the new requirements concerning new consultancy and non-consultancy contract expenditure reporting in the list of requirements. The list of requirements for the Australian Centre for International Agricultural Research only included the new reporting requirements in relation to consultancy contracts under item 17AG(7) of the PGPA Rule, but did not include reporting requirements in relation to non-consultancy contracts under

12 Australian National Audit Office, Audit report of the 2020-21 annual performance statement -

Department of Veterans’ Affairs, Attachment C, [p. 1].

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item 17AG(7A) and 7AGA. However, the required information on non-consultancy contracts was included in the body of the report.

2.22 It was noted that the list of requirements in the report of the Royal Australian Air Force Welfare Trust Fund omitted to list five items under the PGPA Rule. If a reporting item has a nil return for the reporting period or is not applicable, the Department of Finance advises that it should be reported as such rather than omitted from the list.13

2.23 Agencies are reminded that the full and up-to-date list of annual reporting items is a mandatory inclusion in the annual report.

Enhanced reporting requirements

New consultancy/non-consultancy contract reporting 2.24 The Committee was pleased to note that all of 2020-21 reports of non-corporate Commonwealth entities examined included the enhanced reporting in relation to the new reportable consultancy/non-consultancy contract expenditure

under the sections 17AG(7) and (7A) and section 17AGA. Most bodies included all required elements and set out this information in accordance with the Department of Finance guidance for best practice.14 However, one of the required statements on reportable non-consultancy contracts under item 17AG(7A)(b) was not located in the Department of Defence’s report, even though the compliance index indicated this information was included.

Senator the Hon Eric Abetz Chair

13 Department of Finance, Resource Management Guide 136, Annual Reports for Corporate

Commonwealth Entities, Updated 8 April 2022, https://www.finance.gov.au/government/managing-commonwealth-resources/planning-and-reporting/annual-reports-corporate-commonwealth-entities-rmg-136/annual-report-content-requirements-0 ( accessed 13 May 2022).

14 Department of Finance, A guide for non-corporate Commonwealth entities: Consultancy and Non-Consultancy Expenditure Reporting, https://www.finance.gov.au/sites/default/files/2021-03/Consultancy%20and%20Non-Consultancy%20Reporting%20Guidance%20March2021.pdf (accessed 17 May 2022).

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Appendix 1

Dates relating to the presentation of reports between 1 May 2021 and 30 April 2022

Report Submitted to/

received by minister

Senate1 HoR2

Defence Portfolio

Non-corporate Commonwealth entities

Australian Signals Directorate - Report 2020-21 30.09.21/30.09.21 19.10.21 19.10.21

Department of Defence - Report for 2020-21 22.09.21/22.09.21 *15.10.21 19.10.21

Repatriation Commission, Military Rehabilitation and Compensation Commission and Department of Veterans’ Affairs - Report for 2020-21

08.10.21/08.10.21 22.11.21 26.10.21

Corporate Commonwealth entities

Annual Reports of the Services Trust Funds 2020-2021 07.09.21/27.09.21 *13.10.21 19.10.21

RAAF Veterans’ Residences Trust - Report for 2020-21

20.10.21/20.10.21 22.11.21 28.10.21

Navy Canteens Annual - Report for 2020-21 13.10.21/13.10.21 22.11.21 28.10.21

Australian War Memorial - Report for 2020-21 24.09.21/24.09.21 *04.11.21 22.11.21

Defence Housing Australia - Report for 2020-21 29.09.21/30.09.21 22.11.21 21.10.21

Army and Air Force Canteen Service - Report for 2020-21 21.09.21/21.09.21 22.11.21 21.10.21

Commonwealth companies

RAAF Welfare Recreational Company - Report for 2020-21 20.10.21/20.10.21 22.11.21 28.10.21

AAF Company - Report for 2020-21 17.09.21/20.09.21 22.11.21 21.10.21

Australian Strategic Policy Institute - Report for 2020-21 27.10.21/27.10.21 29.11.21 29.11.21

1 *indicates the report was presented to the President of the Senate out of sitting

2 HoR - House of Representatives

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Statutory offices/office holders

Director of Military Prosecutions Report 2020 20.05.21/20.5.21 03.08.21 24.06.21

Judge Advocate General - Report for 2020 16.07.21/16.07.21 03.08.21 03.08.21

Veterans’ Review Board Annual Report 2020-21 24.09.21/25.09.21 22.11.21 28.10.21

Repatriation Medical Authority - Report for 2020-21 04.10.21/12.10.21 22.11.21 21.10.21

Other

Australian Signals Directorate - Commonwealth Cyber Security Posture in 2020 Not available *11.06.21 15.06.21

Schedule of Special Purpose Flights - 01 July-31 December 2020 04.06.21/04.06.21 *28.06.21 03.08.21

Foreign Affairs and Trade Portfolio

Non-corporate Commonwealth entities

Department of Foreign Affairs and Trade Annual Report 2020-21 01.10.21/01.10.21 22.10.21 25.10.21

Australian Trade and Investment Commission Annual Report 2020-21 11.10.21/11.10.21 22.11.21 27.10.21

Australian Centre for International Agricultural Research - Report for 2020-21 28.09.21/29.09.21 22.11.21 21.10.21

Corporate Commonwealth entities

Tourism Australia - Report for 2020-21 16.09.21/17.09.21 *29.10.21 22.11.21

Export Finance Australia - Report for 2020-21 23.09.21/28.09.21 22.11.21 21.10.21

Statutory offices/office holders

Australian Safeguards and Non-proliferation Office - Report for 2020-21 23.09.21/24.9.21 19.10.21 19.10.21

Other

Export Finance Australia - Infrastructure Mandate Review - Independent Report Not available *04.11.21 22.11.21

17

Appendix 2

Summary of annual reporting requirements

Legislative authority and requirements for annual reporting 1.1 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 2014, Division 3A(A);  for parliamentary departments, the Parliamentary Service Act 1999, section 65; and  for statutory bodies: relevant enabling legislation.

Corporate Commonwealth entities  PGPA Act, section 46 and the PGPA Rule 2014, Division 3A(B); and  for statutory bodies: relevant enabling legislation.

Commonwealth companies  PGPA Act, section 97, which also refers to requirements under the Corporations Act 2001 and the PGPA Rule 2014, Part 3-3; and  for statutory bodies: relevant 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 Non-Statutory bodies, Senate Hansard, 8 December 1987.1

Statutory offices or office holders  any requirements in the enabling legislation.

Governance structures of Commonwealth entities and companies 1.2 The following bodies are subject to the Public Governance, Performance and Accountability Act 2013:

Non-corporate Commonwealth entity 1.3 A Non-corporate Commonwealth entity is legally and financially part of the Commonwealth, and includes departments of state, parliamentary departments or listed entities (a body, person, group of persons or

organisation that is prescribed by rules made under the PGPA Act to clearly

1 Government response to the Senate Standing Committee on Finance and Public Administration

Report on Non-Statutory bodies, Senate Hansard, 8 December 1987, pp. 2632-45.

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define them as separate non-corporate Commonwealth entities and not part of another Commonwealth entity).

Corporate Commonwealth entity 1.4 A corporate Commonwealth entity is a body corporate, that is, a separate legal personality from the Commonwealth. It can act in its own right exercising certain legal rights such as entering into contracts and owning properties

separate from the Commonwealth, but is still part of the Australian Government.

Commonwealth company 1.5 A Commonwealth company is a company established by the Commonwealth under the Corporations Act 2001 that is wholly controlled by the Commonwealth and a separate legal entity from the Commonwealth. A

Commonwealth company can be solely or partly owned by the Commonwealth.2

2 See https://www.finance.gov.au/government/managing-commonwealth-resources/structure-australian-government-public-sector/types-australian-government-bodies ( accessed 1 December 2021).

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Appendix 3

Annual reporting timeframes

Commonwealth entities 1.1 Section 46(2) of the PGPA Act requires the accountable authority for a Commonwealth entity to prepare an annual report and provide it to the responsible Minister by the fifteenth day of the fourth month after the end of

the reporting period for the entity. This section of the Act does not currently prescribe a timeframe for the minister to present the report to the Parliament, neither does the PGPA Rule.

1.2 The PGPA Rule states that annual reports for corporate Commonwealth entities, non-corporate Commonwealth entities and Commonwealth companies must comply with the 'the guidelines for presenting documents to the Parliament'.1

1.3 The Department of Prime Minister and Cabinet (PM&C) Tabling Guidelines advise that in relation to the tabling of annual reports:

Enquiries about the preparation, content and reporting timeframes should be directed to the Department of Finance…Relevant guidance for Commonwealth entities and companies annual reporting requirements can be located at https://www.finance.gov.au/resource-

management/performance/.2

1.4 Finance's resource management guides include advice about the timetable for tabling annual reports. For Commonwealth entities, the guides advise that:

Normally annual reports are tabled on or before 31 October and it is expected annual reports are tabled prior to the October Estimates hearings. This ensures annual reports are available for scrutiny by the relevant Senate standing committee.3

1.5 The Tabling Guidelines also refer to periodic advice issued by PM&C through Tabling Circulars which supplement the Guidelines from time to time and may include arrangements for the tabling of annual reports. Tabling Circular

1 See PGPA Rule, sections 17BC, 17AB and 28C.

2 PM&C, Tabling Guidelines, June 2019, p. 4.

3 Department of Finance, Resource Management Guide No. 135 - Annual report for non-corporate

Commonwealth entities, 17 August 2021, https://www.finance.gov.au/government/managing-commonwealth-resources/annual-reports-non-corporate-commonwealth-entities-rmg-135 (accessed 1 December 2021); and Resource Management Guide No. 136 - Annual report for corporate Commonwealth entities, 16 July 2021, https://www.finance.gov.au/government/managing-commonwealth-resources/annual-report-corporate-commonwealth-entities-rmg-136 ( accessed 1 December 2021).

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No. 1 of 2021 advised agencies that in relation to the tabling of the 2020-21 annual reports:

Budget estimates hearings commence on 25 October 2021. It is expected Annual Reports are tabled prior to those hearings. This ensures Annual Reports are available for scrutiny by the relevant Senate standing committee.4

Commonwealth companies 1.6 Under section 97(2) of the PGPA Act, Commonwealth companies are required to prepare an annual report and provide it to the responsible Minister:

(a) if the company is required by the Corporations Act 2001 to hold an annual general meeting—the earlier of the following:

(i) 21 days before the next annual general meeting after the end of the reporting period for the company; (ii) 4 months after the end of the reporting period for the company; and

(b) 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.

1.7 In relation to the tabling of the annual report in the Parliament, section 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.

1.8 The advice contained in Finance's Resource Management Guide No. 137 - Annual reports for Commonwealth companies aligns with the requirements under section 97(5) of the PGPA Act set out above.5 Consistent with Commonwealth entities, Resource Guide No. 137 notes the provision for an application for an extension of the reporting period for Commonwealth companies:

There is scope for a company to apply in writing to their responsible Minister for an extension where it is not reasonably possible to meet the [timeframes outlined in subsection 97(2)]. The Acts Interpretation Act 1901

4 PM&C, Tabling Circular No. 1 of 2021, Arrangements for presentation of documents to Parliament

(inclusive of annual reports), p. 1.

5 Department of Finance, Resource Management Guide No. 137 - Annual reports for Commonwealth

companies, May 2020, 14 July 2021 https://www.finance.gov.au/government/managing-commonwealth-resources/annual-reports-commonwealth-companies-rmg-137 ( accessed 1 December 2021).

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allows a Minister to grant an extension where he or she considers it reasonable in the circumstances.6

Provisions of the Acts Interpretation Act 1901 1.9 In the absence of specific provisions, the Acts Interpretation Act 1901 (Acts Interpretation Act) requires bodies to present annual reports to Ministers within six months after the end of the period reported upon (subsection

34C(2)), and Ministers to table reports within 15 sitting days of receipt (subsection 34C(3)).

Reporting timeframes for statutory offices/office holders

Judge Advocate General 1.10 Under section 196A(1) of the Defence Force Discipline Act 1982 (DFD Act) the Judge Advocate General shall, as soon as practicable after each 31 December, prepare and furnish to the Minister a report relating to the operation of the

Act, the regulations, the rules of procedure; and the operation of any other law of the Commonwealth or of the Australian Capital Territory in so far as it relates to the discipline of the Defence Force during the year ending on that 31 December.

1.11 Section 196A(2) of the DFD Act requires the Minister to present the report to each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report.

Director of Military Prosecutions 1.12 Under Section 196B(1) of the DFD Act, the Director of Military Prosecutions must, as soon as practicable after each 31 December, prepare and give to the Minister, for presentation to the Parliament, a report relating to the operations

of the Director of Military Prosecutions during the year ending on that 31 December.

1.13 The Act does not prescribe a timeframe for the Minister to present the report to the Parliament. It appears that section 34C(3) of the Acts Interpretation Act would apply, therefore requiring the Minister to lay a copy of the report before each House of Parliament within 15 sitting days of receipt of that report.

Inspector-General of the Australian Defence Force 1.14 Section 110R(1) of the Defence Act 1903 (Defence Act) states that as soon as practicable after the end of each financial year, the Inspector-General of the Australian Defence Force (ADF) must prepare and give to the Minister, for

presentation to the Parliament, a report on the operations of the Inspector-

6 Department of Finance, Resource Management Guide No. 137 - Annual reports for Commonwealth

companies, 14 July 2021, https://www.finance.gov.au/government/managing-commonwealth-resources/annual-reports-commonwealth-companies-rmg-137 ( accessed 1 December 2021).

22

General during the financial year. This section also notes that reference should also be made to section 34C of the Acts Interpretation Act, which requires the Minister to lay a copy of the report before each House of Parliament within 15 sitting days of receipt of that report.

Repatriation Medical Authority 1.15 The Repatriation Medical Authority is established under the Veterans' Entitlement Act 1986 and there is not a statutory requirement to table an annual report under the Act but the Authority has done so since its inception.

1.16 In the Committee's report Annual reports (No.1 and No. 2 of 2019), it recommended that unless there was a strong public policy reasons to the contrary, on the occasion of any amendment to the Veterans' Entitlement Act 1986, the Government consider including a clause requiring the Repatriation Medical Authority to table an annual report.7 The Committee welcomed the Government response to the report on 28 October 2019 agreeing to the recommendation:

The Government agrees that, at an opportune time, a clause requiring the Repatriation Medical Authority to table an annual report be included in a future amendment to the Veterans' Entitlement Act 1986.

The Department of Veterans' Affairs will prepare this clause for consideration in due course.8

1.17 The Committee notes that this recommendation has not yet been implemented.

Veterans' Review Board 1.18 Section 215(4) of the Veterans' Entitlements Act 1986 states that the Principal Board Member shall, as soon as practicable after 30 June in each year, prepare and furnish to the Minister a report on the operations of the Board during the

year that ended on that 30 June. Section 215(5) states that the Minister shall cause a copy of a report furnished to the Minister under subsection (4) to be laid before each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report.

Repatriation Commission 1.19 Section 215 of the Veterans' Entitlements Act 1986 requires the Repatriation Commission, as soon as practicable after 30 June in each year, to prepare and furnish to the Minister a report on the operation of the Act during the year;

with the Minister required to present report to the Parliament within 15 sitting days after receipt.

7 Senate Foreign Affairs, Defence and Trade Legislation Committee, Report on Annual Report (No.1

and 2 of 2019), p. 10.

8 Australian Government response to the Senate Foreign Affairs, Defence and Trade Legislation Committee

Report - Annual reports (No.1 and No. 2 of 2019).

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Military Rehabilitation and Compensation Commission 1.20 Under section 385 of the Military Rehabilitation and Compensation Commission Act 2004, the Chair of the commission must, as soon as possible after 30 June each year, give the Minister for presentation to the Parliament, a report of the

Commission's activities for the financial year ended on that day.

Australian Safeguards and Non-proliferation Office 1.21 Under section 51 of the Nuclear Non-Proliferation (Safeguards) Act 1987, section 96 of the Chemical Weapons (Prohibition) Act 1994 and section 71 of the Comprehensive Nuclear Test-Ban Treaty Act 1998, the Director of the Australian

Safeguards and Non-Proliferation Office must, as soon as practicable after 30 June in each year, prepare a report of operations and furnish it to Minister. The above legislative sections require the Minister to cause a copy of the report to be laid before each House within 15 sitting days.