2.7  Non-audited information

Not all the information provided in the annual report requires a formal audit opinion. However, the auditor is required to undertake such work as is appropriate to give an opinion on the specific matters required by relevant legislation. The auditor will also consider matters such as authority, accountability, performance, probity, and waste, as well as to confirm that the annual report as a whole is consistent with the audited statements and the substance of the underlying information. Therefore, the auditor will comment, for example, where the Crown entity has not met legislative requirements, or where the information provided elsewhere in the report is not consistent with the audited statements.

It is important that readers can see the links between the audited statements (financial statements and statement of service performance) and the other information provided on the Crown entity's operations and performance, as well as the links between financial and non-financial information in the audited statements.

2.7.1  Reporting on operations

The overarching expectation of an annual report is that it provides sufficient information to allow the reader (particularly Ministers, MPs and select committees) to make an informed assessment of the Crown entity's performance during the financial year. This expectation is explicitly reflected in the CEA.

There is no prescribed format for reporting on a Crown entity's operations and performance. Each Crown entity should determine a format that suits the entity and that it believes will best promote understanding of its operations and performance. However, from a reporting perspective, it is sensible that the annual report reflect the framework of the statement of intent, which is the plan against which the annual report provides an account of actual performance. The annual report must include an assessment against the relevant intentions, measures, and standards set out in the Crown entity's statement of intent. This will generally encompass reporting against:

• the specific impacts, outcomes and objectives the Crown entity stated in its statement of intent that it was seeking to achieve or contribute to, and how it intended to conduct its operations to achieve those impacts, outcomes and objectives
• the Crown entity's main performance measures and standards for assessing:
  • those impacts, outcomes and objectives
  • the organisational health and capability of the Crown entity, and
• any other matters discussed in the statement of intent as being necessary to understand the Crown entity's performance.

The relevant intentions, measures and standards are those indicated in the statement of intent as applicable to the financial year in question. Forecast figures from the statement of intent should be included for comparison, and where there is a marked difference between forecasts and actuals this should be discussed in the annual report.

When auditors form their independent opinion on the service performance report they will consider the statement of service performance in the context of outcome information (refer to section 2.5). For those statement of intent intentions and standards that are set only for future years, the Crown entity should look at whether it can report on progress made towards meeting those future intentions and standards.

In order to enable the reader to make an informed assessment of a Crown entity's performance, it may be necessary to include performance information in the annual report that was developed after the statement of intent is published. We therefore encourage Crown entities to include meaningful performance information in their annual report even if it was not included in the statement of intent. This also applies in respect of any new services funded, functions acquired, and any major evaluative activity performed during the year. Where a major evaluative activity has not been completed, Crown entities should note work that is underway.

As previously noted, Crown entities should ensure that non-audited information in the annual report is consistent with the audited statements and the substance of the underlying information, and show the links between financial and service performance information.