Annual report content requirements

Annual reports must contain information on the management and accountability practices of the entity in the reporting period.

The requirements for these items are set out within:

Corporate governance

The annual report must include the following:

• information on compliance with the PGPA Rule in relation to the entity during the period (which deals with preventing, detecting and dealing with fraud outlined in section 10 of the Rule)
• a certification by the accountable authority of the entity that
  • fraud risk assessments and fraud control plans have been prepared for the entity
  • appropriate mechanisms for preventing, detecting incidents of, investigating or dealing with, and recording and reporting fraud, that meet the specific needs of the entity and are in place for the entity
  • all reasonable measures have been taken to deal appropriately with fraud relating to the entity.

The new Commonwealth Fraud Control Framework 2024 provides further information on preventing, detecting and dealing with fraud.

Entities may wish to include the certification by the accountable authority as an element of the 'Letter of transmittal' from the accountable authority, detailed further in this guide.

Annual reports must also include an outline of the structures and processes that the entity had in place during the reporting period to implement the principles and objectives of corporate governance. The content of this statement is at the discretion of the accountable authority; however, it is suggested that the review may include:

• the names of the senior executive and their responsibilities
  • The responsibilities of the senior executive should be able to be reconciled with the entity’s organisational and outcome/program structures as set out under ‘Overview of the entity’.
  • Entities may choose to locate this information in the ‘Overview of the entity’ section.
• senior management committees and their roles.
• corporate and operational plans and associated performance reporting and review, including contribution to specified outcomes
  • Terminology in relation to entity plans may vary – it may, for example, involve strategic and business plans. The intent is to address longer term and annual plans.
• internal audit arrangements, including the approach adopted to identifying areas of significant operational or financial risk, and arrangements in place to manage those risks.
• the entity’s policy and practices on the establishment and maintenance of appropriate ethical standards; or
  • The requirement in relation to the APS Values and Code of Conduct which applies to departments and executive agencies, and prescribed agencies staffed under the Public Service Act 1999. The Public Service Commissioner reports annually on these issues in the State of the Service report.

The requirements in the Australian Securities Exchange (ASX) Listing Rule 4.10.3 have been used as a guide for the above information. This rule requires disclosure in relation to the ASX Corporate Governance Council recommendations.

Significant non-compliance issues with finance law

The annual report must include the following:

• a statement of any significant issue reported to the responsible Minister that relates to non-compliance with the finance law
• if a statement is included, then an outline of the action that has been taken to remedy the non-compliance must also be included.

The PGPA Act (section 19) requires that accountable authorities of Commonwealth entities notify their responsible Minister when significant issues have been identified.

RMG-214 Notification of significant non-compliance with the finance law provides additional guidance and is also available under Resource Management Guides.

Audit committee 
 

The annual report must include the following:

• a direct electronic address of the charter determining the functions of the audit committee for the entity
• We recommend entities utilise the table in the associated data template to cover these requirements:
  • the name of each member of the audit committee during the period
  • the qualifications, knowledge, skills or experience of those members
  • information about each of those members; attendance at meetings of the audit committee during the period
  • the remuneration of each of those members.

RMG-202 Audit committees provides additional guidance on the reporting requirements and is also available under Resource Management Guides.

External scrutiny 

The annual report must include information on the most significant developments in external scrutiny of the entity, that has occurred within the reporting period and the entity's response to that scrutiny.

This must include:

• judicial decisions, or decisions of administrative tribunals or the Australian Information Commissioner, made during the period that have had, or may have, a significant effect on the operations of the entity; and
• any report on the operations of the entity given during the period by:
  • the Auditor-General, other than a report under section 43 of the PGPA Act (which deals with the Auditor-General’s audit of the annual financial statements for Commonwealth entities); or
  • a Committee of either or both Houses of the Parliament; or
  • the Commonwealth Ombudsman.
• any capability reviews of the entity that were released during the period. 
   

Management of human resources 

Annual reports must include information about the entity’s effectiveness in managing and developing its employees, and certain statistics on the entity’s human resources, as set out below.

The requirements for these items are set out within:

Managing and developing employees

The annual report must include an assessment of the entity's effectiveness in managing and developing its employees to achieve its objectives.

The content of this assessment is at the discretion of the accountable authority; however, it is suggested that it may include:

• workforce planning and staff retention and turnover
• the main features of enterprise or collective agreements, individual flexibility arrangements, determinations made under the Public Service Act 1999 (subsection 24(1)), common law contracts, any remaining Australian Workplace Agreements, and developments regarding agreement making and the impact of making agreements
• the entity’s key training and development strategies, the outcomes of training and development, and an evaluation of effectiveness
• the entity’s work health and safety performance, noting specific information is also required pursuant to the Work Health and Safety Act 2011
• productivity gains.

Entities should take care to ensure that any information provided on individual terms and condition arrangements does not, or cannot be used to, identify individual employees. The Australian Bureau of Statistics have published a Data confidentiality guide that offers guidance on the Five Safes framework, confidentiality techniques and confidentialising your own data.
 

Employee statistics 
 

Annual reports must include statistics on the number of employees of the entity (with reference to ongoing employees and non ongoing employees), at the end of the reporting period and the previous reporting period, in relation to each of the following:

• full-time employees, as identified by your entity’s employment arrangements. As a guide, the Fair Work Ombudsman provides general employment definitions.
• part-time employees as identified by your entity’s employment arrangements.
• gender, consistent with advice from the Attorney-General's Department, to describe gender in line with the Australian Bureau of Statistics' Standard for Sex, Gender, Variations of Sex Characteristics and Sexual Orientation Variables (2020). Categories are:
  • Man/Male
  • Woman/Female
  • Non-binary
  • Prefers not to answer
  • Uses a different term.

• location, based on the State or Territory of employment.

All human resources statistics are to be calculated and reported on an actual head count basis (number of employees) as at the end of each reporting period. Full-time equivalent statistics (for example, 1.5 FTE) are not to be reported.

If an entity believes the level of disaggregation of employee data could result in significant risk of unintentional identification and consequential harm to a specific employee, then the entity has the discretion to report that employee’s data at a higher level without further disaggregation. It is important when considering this, that the level of aggregation of information doesn’t make the reporting “meaningless” or be seen to complicate other details.

APS employee statistics 
 

The annual report must include statistics on the number of APS employees of the entity (including by reference to ongoing APS employees and non-ongoing APS employees) in relation to each of the following:

• each APS classification level of the entity 
  • full-time employees, as identified by your entity's employment arrangements. As a guide, the Fair Work Ombudsman's website provides a general employment definitions.
  • part-time employees as identified by your entity's employment arrangements.
  • gender, consistent with advice from the Attorney-General's Department, to describe gender in line with the Australian Bureau of Statistics' Standard for Sex, Gender, Variations of Sex Characteristics and Sexual Orientation Variables (2020). Categories are:
    • Man/Male
    • Woman/Female
    • Non-binary
    • Prefers not to answer
    • Uses a different term
  • location, based on the State or territory of employment.
  • employee who identifies as Indigenous.

Workplace agreements

Annual reports must include information about the arrangements under which employees are employed in the entity. This may include information on any enterprise or collective agreements, individual flexibility agreements, determinations made under subsection 24(1) of the Public Service Act 1999, common law contracts or Australian Workplace Agreements. This information must include:

• the number of APS employees covered by enterprise or collective agreements, individual flexibility agreements, subsection 24(1) determinations, common law contracts and Australian Workplace Agreements by Senior Executive Service (SES) employees and non-SES employees
• the salary ranges available for APS employees by classification level (the range should reflect the full span of salaries available under an enterprise or collective agreement, individual flexibility agreement, subsection 24(1) determination, common law contract and/or Australian Workplace Agreement)
• a description of the range of non-salary benefits provided by the entity to employees.

For those entities subject to a determination made under subsection 24(3) of the Public Service Act 1999, it would be appropriate to include a discussion of the effect of that determination when responding to this requirement. This discussion should include the number of employees covered by the determination, any supplementary arrangements entered into via subsection 24(1) determinations or common law contracts, and progress towards replacement of the determination with an enterprise or collective agreement. 
 

Performance pay 
 

Annual reports must include information about performance pay, which can also be known as performance-linked bonuses, and usually taking the form of a one-off payment in recognition of performance. Note that this is a separate requirement to the reporting of bonuses as part of executive remuneration reporting.

In compiling the information about performance pay, entities should:

• include all eligible ongoing and non-ongoing APS staff
• include staff who left the entity during the reporting period, even if the performance payment was made after their departure
• include staff on leave of any kind at the end of the reporting period
• report the aggregate of actual payments, not payments before moderation. In the case of a small entity, or a small number of employees at a given classification level (e.g. 5 employees or fewer), a lesser disaggregation maybe necessary to ensure that individuals cannot be identified
• include each employee under one classification only. If an employee was promoted during the year and received performance pay at the lower classification only, include that employee in the report for the lower classification. If the promoted employee received performance pay at both classifications or at the higher level only, include the employee in the report for the higher level only and include the total payment in the aggregated payment report for that classification. Do not include the same employee in both classifications and do not break up the payment when aggregating the total payments for the various classifications
• not include performance-linked advancement (advancement to a higher pay point which then becomes the employee’s nominal salary). If an employee receives a performance bonus and a performance-linked advancement, only the bonus element should be reported;
• not include payments in the nature of retention payments, job loadings or skills and responsibilities loadings
• not include bonuses that accrued wholly in a previous reporting period, even if they were paid in the reporting period to which the report relates. For example, if a payment was made in the 2019–20 financial year for performance in respect of the period 1 July 2018 to 30 June 2019, it should not be included in the 2019-20 annual report. However, if a significant number of payments fall into this category, consideration should be given to correcting the information in the previous year’s annual report.

Entities that do not pay, or no longer pay, performance pay should include a statement to that effect in their annual report.

Executive remuneration

The annual report must include information about executive remuneration as required by Subdivision C of the PGPA Rule, which includes:

• the requirements for reporting remuneration details for:
  • key management personnel (KMP)
  • senior executives
  • other highly paid staff (OHPS).
• the requirements for reporting the policies and practices of the entity regarding the remuneration of the above.

RMG-138 Commonwealth entities Executive Remuneration Reporting Guide for Annual Reports provides additional guidance and is also available under Resource Management Guides.

Assets management

Annual reports must include an assessment of the effectiveness of the entity’s asset management practices during the reporting period. This requirement is only necessary where asset management (including assets of which the day-to-day management has been outsourced) is a significant aspect of the strategic business of the entity.

Entities may wish to include a discussion of their asset management plans, particularly if a significant portion of their asset base has a life of 50 years or greater.

Purchasing

The annual report must include an assessment of the entity’s performance during the period against the Commonwealth Procurement Rules.

Consultancy and non-consultancy contract expenditure reporting

There are reporting requirements for any contract published on AusTender with respect to:

• the number of and expenditure on, new and ongoing reportable consultancy and non-consultancy contracts; and
• organisations receiving amounts under reportable consultancy contracts or reportable non-consultancy contracts during the reporting period.

Entities are required to report on contract expenditure in both the body of the annual report, and in the associated data templates.  Please note, when preparing your Annual Report for publication on the Transparency Portal using DART, that the data templates require these amounts to be expressed as $000, and not in whole dollars. Please make sure you note this requirement when completing these data templates.

Further guidance can be found in the Consultancy and Non-Consultancy Reporting Guidance under Tools and templates.

Australian National Audit Office access clauses

Entities must provide details of any contract entered into during the reporting period of $100,000 or more (inclusive of GST) that does not provide for the Auditor-General to have access to the contractor’s premises.

The annual report must include:

• the name of the contractor
• the purpose and value of the contract
• the reason why a clause allowing such access was not included in the contract. 

The inclusion of standard access clauses provides the Australian National Audit Office with access to various types of information held by contractors and third party subcontractors for the purpose of audits, including access to records, information and assets directly relevant to the contract performance. The clauses do not enable access to information that is outside the scope of the specific contract. 

Exempt contracts

The PGPA Rule requires that if any contract in excess of $10,000 (inclusive of GST) or a standing offer has been exempted by the accountable authority from being published on AusTender on the basis that it would disclose exempt matters under the Freedom of Information Act 1982 (FOI Act), the fact that the contract has been exempted and the value of the contract or standing offer must be reported, to the extent that doing so does not in itself disclose the exempt matters. 

The exempt contracts provision addresses the requirement to document, in entities’ annual reports, any contracts entered into during the reporting period, where the contract details were not published in AusTender. This requirement also covers standing offers.

An accountable authority may direct in writing that contract details are not to be reported on AusTender if they would be subject to an exemption under the FOI Act and the accountable authority considers that the information is genuinely sensitive and harm is likely to be caused by its disclosure.

Small business

Procurement initiatives to support small business

The Commonwealth Procurement Rules (Paragraphs 5.5 to 5.8) deal with the requirements for procurement practices of Commonwealth entities to support small and medium enterprises.

The Australian Government is committed to entities sourcing at least 20% of procurement by value from SMEs. The Commonwealth Procurement Rules state that, to ensure that SMEs can engage in fair competition for Australian Government business, officials should apply procurement practices that do not unfairly discriminate against SMEs and provide appropriate opportunities for SMEs to compete.

Annual reports must include a statement that refers readers to the statistics on SMEs’ participation in Commonwealth Government procurement available on the Statistics on Australian Government Procurement Contracts page. 

This statement may include some of the following initiatives or practices:

• the Commonwealth Contracting Suite for low-risk procurements valued under $200,000
• Australian Industry Participation plans in whole-of-government procurement where applicable
• the Small Business Engagement Principles (outlined in the government’s Industry Innovation and Competitiveness Agenda), such as communicating in clear, simple language and presenting information in an accessible format
• electronic systems or other processes used to facilitate on-time payment performance, including the use of payment cards.

Entities that are considered material in nature, as characterised by the Department of Finance in the PGPA Flipchart must include a statement in their annual reports referring readers to the on-time payment performance results, which will be available on the website of the Department responsible for small business. This is currently the Department of the Treasury.