Commonwealth Authorities
(Annual Reporting) Orders 2011
I, Penelope Ying Yen Wong, Minister for Finance and Deregulation, make these Orders under section 48 of the Commonwealth Authorities and Companies Act 1997.
 
 
 
 
 
PENELOPE YING YEN WONG
.......................................................
Dated   22-9-11
 
 
 
 
 
 
 
 
 
Contents
1        Name of Orders. 1
 
Preliminary
 
2        Commencement 1
3        Application of Orders. 1
4        Revocation and transitional application of previous Orders. 1
5        Purpose. 1
6        Approval by directors. 2
7        Exemptions. 2
 
Requirements
 
8        Parliamentary standards of presentation. 2
9        Plain English and clear design. 2
10      Enabling legislation. 3
11      Responsible Minister. 3
12      Ministerial directions and other statutory requirements. 3
13      Information about directors. 4
14      Outline of organisational structure and statement on governance. 4
15      Related entity transactions. 5
16      Key activities and changes affecting the authority. 5
17      Judicial decisions and reviews by outside bodies. 6
18      Obtaining information from subsidiaries. 6
19      Indemnities and insurance premiums for officers. 6
20      Disclosure requirements for GBEs .......................................................................7
21..... Index of annual report requirements...................................................................7
22      Definitions. 8
 

 
 
1          Name of Orders
These Orders are the Commonwealth Authorities (Annual Reporting) Orders 2011.
Preliminary
2      Commencement
These Orders commence on the day after they are registered on the Federal Register of Legislative Instruments.
3      Application of Orders
3.1       Subject to subclause 3.2, these Orders apply to Commonwealth authorities in relation to each financial year ending on or after 30 June 2012.
3.2       Clause 15 (related entity transactions) applies to annual reports for each financial year ending on or after 30 June 2013.
Note: The Orders, apart from clause 15, will relate to the financial year 2011-2012, and to the annual reports due on 15 October 2012 and onwards.  More time is provided for the application of clause 15 (related entity transactions) which is to apply for the financial year 2012-2013, and to the annual reports that fall due on 15 October 2013 and onwards.
4          Revocation and transitional application of previous Orders 
4.1       The Commonwealth Authorities and Companies (Annual Report of Operations) Orders 2008 are revoked.
4.2       Notwithstanding clause 4.1, the Commonwealth Authorities and Companies (Annual Report of Operations) Orders 2008 continues to apply to annual reports of Commonwealth authorities for the financial year ending on 30 June 2011.
5          Purpose
These Orders specify the requirements for the Annual Report of Operations that the directors of a Commonwealth authority must provide and include in its annual report.
Directors of a Commonwealth authority are required under section 9 of the CAC Act to prepare an annual report in accordance with Schedule 1 to the CAC Act. The report must be given to their responsible Minister within the timeframe prescribed in subsection 9(2) of the CAC Act for tabling in Parliament.
6          Approval by directors
The Annual Report of Operations must be approved by a resolution of directors of a Commonwealth authority. If the Commonwealth authority has only one director, the Report of Operations must be approved by that director.
The Annual Report of Operations must be signed by a director and include details of how and when approval was given. The Annual Report of Operations must also state that directors are responsible for the preparation and contents of the Annual Report of Operations (as required in section 9 of the CAC Act and in accordance with the Finance Minister’s Orders).
7          Exemptions
The Finance Minister may grant a written exemption to the directors of a Commonwealth authority, or a class of Commonwealth authorities, from any requirement of these Orders. An exemption must be in writing and may be subject to conditions.
Details of an exemption relied upon by the Commonwealth authority must be provided in the Annual Report of Operations.
Requirements
8          Parliamentary standards of presentation
The annual report of a Commonwealth authority is tabled in Parliament by the responsible Minister under paragraph 9(1)(b) of the CAC Act. Once tabled in Parliament, the annual report becomes part of the Parliamentary Papers series and as such, the report must comply with the presentation and printing standards for documents presented to the Parliament.
Note: Further information on Parliamentary requirements for tabled documents is available through the link: www.aph.gov.au/house/committee/publ/printing_standards.htm.
9          Plain English and clear design
The Annual Report of Operations must be constructed having regard to the interests of the Parliament and other users. Information included in the report must be relevant, reliable, concise, understandable and balanced. For example, to the extent practicable:
a.         use clear design, including through headings and adequate spacing;
b.        define acronyms and technical terms (such as through a glossary);
c.         use tables, graphs, diagrams and charts; and
d.        include any additional matters that may be appropriate.
10        Enabling legislation
The Annual Report of Operations must also specify the Commonwealth authority’s enabling legislation, including a summary of its objectives and functions, as specified in its legislation.
11        Responsible Minister
The Annual Report of Operations must specify the name of the current responsible Minister and the names of any other responsible Ministers during the relevant financial year being reported on.
12        Ministerial directions and other statutory requirements
Directions and Government policies
The Annual Report of Operations must provide details of:
a.         directions issued by the responsible Minister, or other Minister, under the enabling legislation of the Commonwealth authority or other legislation; and
b.        general policies of the Australian Government that were notified to the Commonwealth authority before 1 July 2008 under section 28 of the CAC Act (as in force before 1 July 2008) and which continue to apply to the Commonwealth authority; and
c.         General Policy Orders that apply to the Commonwealth authority under section 48A of the CAC Act.
This will assist readers to understand why authorities acted in a particular way.
Where a direction or applicable policy has not been fully complied with, the report must include an explanation of the non-compliance.
Other legislation
Other legislation can require reporting on additional matters in the annual report as well. For example, subsection 516A(3) of the Environmental Protection and Biodiversity Conservation Act 1999 requires a Commonwealth authority to report on certain environmental matters.
Note:  Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), section 516A. Information on ecologically sustainable development (including the EPBC Act and a suggested approach to meeting the statutory reporting requirements) can be found on the website of the Department of Sustainability, Environment, Water, Population and Communities at: www.environment.gov.au/esd.
13       Information about directors
The Annual Report of Operations must include information on the directors of the Commonwealth authority. This information includes directors’ names, qualifications, experience, attendance of board meetings, and whether the director is an executive or non-executive director.
14       Outline of organisational structure and statement on governance
Organisational structure
The Annual Report of Operations must provide an outline of:
a.         the organisational structure of the Commonwealth authority (including subsidiaries); and
b.        the location, in Australia or elsewhere, of major activities and facilities.
Statement on governance
The Annual Report of Operations can assist a Commonwealth authority to demonstrate that its governance is sound.
Consequently, the Annual Report of Operations must include information on the main corporate governance practices that the Commonwealth authority used during the financial year. For example, details should be provided on:
a.         board committees of the authority and their main responsibilities; and
b.        education and performance review processes for directors; and
c.         ethics and risk management policies.
15        Related entity transactions
The Annual Report of Operations must disclose the decision-making process undertaken by the board of the authority when:
a.         it approves for the authority to pay for a good or service from another entity, or provide a grant to another entity; and
b.        a director of the authority is also a director of the other entity that provides the good or service or receives the grant; and
c.         the value of the transaction, or if there is more than one transaction, the aggregate value of those transactions, exceeds $10,000 (GST inclusive).
If decision-making processes relate to multiple transactions to a single entity, with an aggregate value of more than $10,000 (GST inclusive), then a single report can be provided that explains the number of transactions and the aggregate of expenditure.
The aim is to improve transparency around potential conflicts of interests in the operations of Commonwealth authorities.[1]
16       Key activities and changes affecting the authority
Highlighting key activities and changes that have affected the Commonwealth authority can assist the reader to understand the authority’s performance over the past financial year. Consequently, the annual report must detail any key activities and changes that affected the operations or structure of the authority during the financial year. This may include:
a.         significant events under section 15 of the CAC Act such as forming or participating in the formation of a company, significant partnership or trust; and
b.        operational and financial results of the authority; and
c.         key changes to the authority’s state of affairs or principal activities; and
d.        amendments to the authority’s enabling legislation and to any other legislation directly relevant to its operation.
17       Judicial decisions and reviews by outside bodies
As entities of the Australian Government, Commonwealth authorities are expected to have levels of accountability suitable for the public sector.  Part of demonstrating these qualities involves reporting on judicial decisions and reports by third parties.  As such, the Annual Report of Operations must include particulars of:
a.         judicial decisions and decisions of administrative tribunals that have had, or may have, a significant affect on the operations of the Commonwealth authority; and
b.        reports about the authority made by the Auditor-General, a Parliamentary committee, the Commonwealth Ombudsman or the Office of the Australian Information Commissioner.
18       Obtaining information from subsidiaries
Where directors of a Commonwealth authority are unable to obtain information from a subsidiary that is required to be included in the Annual Report of Operations before the annual report is submitted under section 9 of the CAC Act, the directors must include an explanation on the missing information and how this affects the annual report.
19       Indemnities and insurance premiums for officers
The Annual Report of Operations must include details of any indemnity given to an officer against a liability, including premiums paid, or agreed to be paid, for insurance against the officer’s liability for legal costs.
20       Disclosure requirements for GBEs
Changes in financial conditions and community service obligations
The Annual Report of Operations for a GBE must include:
a.         an assessment of:
i.     significant changes in its overall financial structure and condition over the financial year; and
ii.    any events or risks that could cause reported financial information not to be indicative of future operations or financial condition; and
b.        dividends paid or recommended in relation to the financial year; and
c.         details of any community service obligations the GBE has, including:
i.     an outline of actions the GBE has taken to achieve those obligations; and
ii.    an assessment of the cost of fulfilling those obligations.
Information that is commercially prejudicial
However, information required by this clause 20 can be excluded if the directors believe, on reasonable grounds, that the information is commercially sensitive and would likely result in unreasonable commercial prejudice to the GBE. The annual report must state whether such information has been excluded.
21       Index of annual report requirements
To assist readers to locate the information required by the CAC Act (including these Orders) or other applicable legislation, the Annual Report of Operations must provide an index of annual report requirements, identifying where relevant information can be found in the annual report.[2]
22        Definitions
In these Orders:
annual report means the reports the directors of a Commonwealth authority are required to give to their responsible Minister after the end of the financial year, in accordance with section 9 of the CAC Act.
CAC Act means the Commonwealth Authorities and Companies Act 1997
due on 15 October includes any later date resulting from an extension granted by a Minister under section 34C of the Acts Interpretation Act 1901.
Finance Minister means the Minister responsible for the Finance portfolio.
financial statements requirement the annual report must include financial statements prepared by the directors (clause 2 of Schedule 1 to the CAC Act) and the Auditor-General’s report on those financial statements.
financial year means the period of a year being reported upon (typically commencing on 1 July and ending on 30 June).
Responsible Minister means the Minister with portfolio responsibility for the Commonwealth authority.
Unless the contrary intention appears, an expression that is used in these Orders and in the CAC Act generally, or in a particular provision of the CAC Act mentioned in the relevant part of these Orders, has the same meaning in these Orders as in the CAC Act.

[1] This requirement arose out of Recommendation 2 of the Senate Standing Committee on Finance and Public Administration’s report: Annual Reports (No. 2 of 2009) issued in September 2009.  Consistent with clause 3, this applies to 2012-2013 and to annual reports due on 15 October 2013 and onwards.
[2] This requirement arose out of Recommendation 1 of the Senate Standing Committee on Finance and Public Administration’s report: Annual Reports (No.1 of 2009) issued in March 2009.