Overview

Purpose of Annual Report

A department's annual report is one of the most important means by which the department discharges its accountability to members of Parliament and the public they represent. It is the key resource for the Responsible Minister and for the financial review of the performance and current operations of each department conducted by select committees under the Standing Orders of the House of Representatives.

A good annual report can be a powerful way to promote better understanding and debate about how resources and powers were used, what was achieved in comparison to what was planned, and how to improve future performance. By doing so, it has the potential to create greater public trust and confidence in the work of the department and align with the Government's objective of having "Better, Smarter Public Services for Less".

Annual reports are public documents. They are an important reference document for people both within and outside the department and should be made available electronically as soon as published.

The annual report and performance

The annual report should report on progress against the outcomes detailed in the Statement of Intent (SOI) as well as reporting on the forecast service performance information included in the Information Supporting the Estimates. The reporting in the annual report should give a clear picture of the overall performance story for the agency in context: where has it been and where is it now.

The annual report is part of a continuous management cycle that involves reviewing actual results against stated intentions, which then feeds back into the next cycle of direction-setting, planning, implementation and review.

At a minimum, departments should report on the measures set out in the SOI for the year covered by the annual report. Departments should not feel constrained to reporting only against the performance measures and standards included in their future operating intentions section of the SOI, particularly if those measures and standards were incomplete or still under development. The annual report should not include measures (financial or non-financial) that the agency knows provide a misleading picture of the results achieved.

Performance information

Departments are encouraged to include the following principles when considering what performance information to present in their annual reports to accurately represent their performance (financial and non-financial). In an environment of fiscal pressures and spending constraints performance information is critical to make responsible decisions.

Critical aspects of performance

Outside of the mandatory audited statements[1], departments should focus most of their reporting effort on the few critical aspects of departmental performance. The reader should not be overwhelmed with a multitude of information and have no clear sense of what matters most. When deciding which aspects of performance (specified in the Statement of Intent and Information Supporting the Estimates) to give most attention in explaining achievements and progress, departments may find it useful to consider the significance of performance achievements and variations to intended performance in the context of the following criteria:

• the financial magnitude of the output or intervention
• the size of the economic, social and environmental impact, and
• the importance to the overall success and future operational effectiveness of the organisation of the intervention.

Departments should also consider how significant achieving outcomes for different population groups is in achieving Ministerial priorities and whether the annual report should specifically cover progress for different population groups.