NSW Audit Office - Financial Reports – 2002 - Volume 3 – Compliance  Review of the Timing Requirements

NSW Audit Office - Financial Reports – 2002 - Volume 3 – Compliance Review of the Timing Requirements

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Auditor-General’s Report to Parliament 2002 Volume Three 7 Compliance Review of the Timing Requirements of the Annual Reports Legislation This review examined whether CEOs and Ministers complied with the timing requirements for preparing and tabling annual reports in Parliament. Data was also collected about the report, including the cost of producing it, the size, colour and number of copies printed. We reviewed 25 NSW Government agencies. For further information on what this review covered see Background at the end of this commentary. KEY FINDINGS Despite similar findings in a previous review: ♦ some agency CEOs did not provide their annual report to the Minister and a copy to the Treasurer on time ♦ the CEOs who missed their submission deadline had not applied for an extension of time from the Treasurer ♦ some Ministers did not table their agencies’ annual reports in the timeframe required by the legislation. The legislation also requires agencies listed in the Public Sector Management Act 1988 to disclose the cost of producing their annual reports. Not all agencies are complying with this requirement (a small number of agencies are exempt as they are not listed in the Act.) Also, increasing electronic distribution of annual reports makes the cost per printed copy of the report less relevant. Detailed findings are included below. RECOMMENDATIONS 1. Treasury should again inform Ministers and agency CEOs that complying with legislative reporting ...

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Auditor-General’s Report to Parliament 2002 Volume Three
7
Compliance Review of the Timing Requirements of the
Annual Reports Legislation
This review examined whether CEOs and Ministers complied with the timing requirements for
preparing and tabling annual reports in Parliament. Data was also collected about the report,
including the cost of producing it, the size, colour and number of copies printed.
We reviewed 25 NSW Government agencies. For further information on what this review covered see
Background at the end of this commentary.
KEY FINDINGS
Despite similar findings in a previous review:
some agency CEOs did not provide their annual report to the Minister and a copy to the
Treasurer on time
the CEOs who missed their submission deadline had not applied for an extension of time from
the Treasurer
some Ministers did not table their agencies’ annual reports in the timeframe required by the
legislation.
The legislation also requires agencies listed in the
Public Sector Management Act 1988
to disclose the
cost of producing their annual reports. Not all agencies are complying with this requirement (a small
number of agencies are exempt as they are not listed in the Act.) Also, increasing electronic
distribution of annual reports makes the cost per printed copy of the report less relevant.
Detailed findings are included below.
RECOMMENDATIONS
1.
Treasury should again inform Ministers and agency CEOs that complying with legislative
reporting deadlines is vital to accountability.
2.
Because electronic distribution of annual reports is becoming more widespread, Parliament
should review the legislation that requires agencies to disclose the cost per copy of the annual
report. The total cost of producing the report may be more appropriate. To ensure consistency
across agencies, Treasury should determine the components of costs to be included.
DETAILED FINDINGS
The first four of these findings are repeat findings from a similar report tabled in Parliament in 1999.
Individual agencies reviewed this time will be informed if they did not comply with the legislation.
Tabling the Report in Parliament – Repeat Finding
Of the 25 agencies sampled, Ministers tabled nine of their reports late. Five were only one day late,
one was 34 days late, and the others were between three and 12 days late.
A Minister has one month after receiving an annual report to table it in Parliament.
Compliance Review of the Timing Requirements of the Annual Reports Legislation
8
Auditor-General’s Report to Parliament 2002 Volume Three
Submitting the Report to the Minister and Treasurer – Repeat Finding
Agency CEOs must submit their report to their Minister and a copy to the Treasurer no later than four
months after the end of the financial year.
The highest level of non-compliance related to sending the copy to the Treasurer. Four of the agencies
did not comply at all. Another eight agencies were between one and 146 days late.
Some agencies did not record when they had submitted the report to the Treasurer. Treasury records
were then the only reference of receipt of the Treasurer’s copy.
Three of these 12 agency CEOs also did not submit their annual report to their Minister within the
legislative timeframe. They were submitted 75, 92 and 100 days late.
Extension of Time – Repeat Finding
None of the 12 agency CEOs who were late with their reports had applied for an extension from the
Treasurer. The legislation requires agencies to seek any extension within three months of year-end.
Disclosing the Cost of Annual Reports – Repeat Finding
Agencies listed in the
Public Sector Management Act 1988
must disclose the average cost per copy of
their annual report. This data allows comparisons between agencies. Three agencies said they did not
comply because they were unaware of the requirement. (A further agency did not disclose this
information, as it is not listed in the Act.)
The regulations require agencies to disclose either actual or estimated costs. Costs are described as
external costs (eg consultants, photographers and printers).
In July 2000, Treasury encouraged agencies to disclose how they calculated the cost, however only
about half of the agencies disclosed this information.
Based on disclosures by the sampled agencies, the:
most expensive cost per copy was $44 (56 pages, colour photographs with 500 copies printed)
cheapest cost per copy was $7.41 (58 pages, black and white print with 170 copies printed)
largest report was 328 pages
most printed copies was 10,000.
Electronic Copies
One agency provided hard copies only for Parliament and posted its report on its internet site. The
agency supplied a photocopied report to anybody who couldn’t access the site. The agency did not
disclose the cost per copy of the report, presumably because it considered the figure meaningless
given the uncertain number of copies downloaded from its site.
Other agencies intend to adopt electronic distribution in the future. Legislators will have to reassess
what information is required on the cost of production of annual reports. Total production cost may be
more relevant than cost per printed copy.
BACKGROUND
We reviewed 25 agencies in the Public Sector. There were 10 statutory authorities, eight departments,
four statutory state owned corporations and three universities.
Compliance Review of the Timing Requirements of the Annual Reports Legislation
Auditor-General’s Report to Parliament 2002 Volume Three
9
The
Annual Reports (Statutory Bodies) Act 1984
and the
Annual Reports (Departments) Act 1985
require agencies to give their annual reports to their Minister and the Treasurer within four months of
the end of the financial year. The Minister must then table the report in both Houses of Parliament
within one month. If Parliament is in recess, the Minister must present the annual report to the Clerk
of either House of Parliament.
The legislation requires the head of the agency to apply to the Treasurer for a time extension. The
Minister cannot apply for an extension.
Annual reports must also include the cost of distributing the report to the public. Premier’s
Memorandum 98-4,
Production Costs of Annual Reports,
suggests a number of ways of minimising
costs, including:
limiting the size of the report;
limiting the number printed;
reducing the paper quality; and
printing the report in black and white.
A similar review was conducted in 1999 (Auditor-General’s Report, Volume Two), but it involved a
much larger sample of 240 agencies. That review made five recommendations, which Treasury
addressed in issuing Treasury Circular 2000/16, ‘Annual Reporting Update’.
RESPONSE FROM TREASURY
Towards the end of each financial year, Treasury issues an annual reporting update circular. Agencies
will again be reminded of annual report submission and tabling requirements in the 2001-02 circular,
to be issued shortly.
In recent years, many agencies have increased their accountability by including an electronic copy of
the annual report on their website. As a result, many agencies have been able to reduce the total
number of hard copy reports printed – which produces a total cost saving. However, a smaller number
of annual reports results in increased average cost per report.
The requirement to include cost per report is a minimum. Agencies may include additional
information concerning total cost in their annual reports. Where a saving can be demonstrated,
agencies may state that reducing the number of printed copies has produced a total cost saving.
Disclosure requirements prescribed in the
Annual Reports (Departments) Regulation 2000
and the
Annual Reports (Statutory Bodies) Regulation 2000
are currently being reviewed. The requirement to
disclose cost per copy will be considered as part of this review.
Compliance Review of the Timing Requirements of the Annual Reports Legislation