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

The Audit Office Of New South Wales

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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

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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