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Commonwealth Authorities and Companies Orders 1998

Orders/Other as amended, taking into account amendments up to Commonwealth Authorities and Companies Amendment Orders 2001 (No. 1)
Administered by: Finance
Registered 10 Sep 2010
Start Date 08 Nov 2000

Commonwealth Authorities and Companies Orders 1998

as amended

made under section 48 of the

This compilation was prepared on 2 July 2001
taking into account amendments up to Commonwealth Authorities and Companies Amendment Orders 2001 (No. 1)

Prepared by the Office of Legislative Drafting,
Attorney-General’s Department, Canberra

 


 

Contents

Page

                        1  Citation [see Note 1]                                                                               3

                        2  Commencement [see Note 1]                                                                   3

                        3  Interpretation                                                                                          3

                        4  Report of operations                                                                                3

Schedule 1 — Report of Operations                                                                                  4

Part 1 — Preliminary                                                                                                           4

                        1  Purpose                                                                                                 4

                        2  Interpretation                                                                                          4

                        3  Exemptions                                                                                            5

                        4  Certification                                                                                            5

Part 2 — Form and content of the Report of Operations                                                          5

                        5  Content                                                                                                  5

                        6  Standards of presentation                                                                        5

                        7  Obtaining information from subsidiaries                                                     6

                        8  Enabling legislation and responsible Minister                                             6

                        9  Outline of organisational structure                                                             6

                       10  Review of operations and future prospects                                                 6

                       11  Judicial decisions and reviews by outside bodies                                       7

                       12  Effects of Ministerial directions                                                                 7

                       13  Disclosure requirements for GBEs                                                            8

                       14  Directors                                                                                                9

                       15  Audit committee                                                                                     9

                       16  Indemnities and insurance premiums for officers                                        9

                       17  Other statutory requirements                                                                  10

Notes                                                                                                                               11

 

 

 


  

  

  

1              Citation [see Note 1]

                These Finance Minister’s Orders may be cited as the Commonwealth Authorities and Companies Orders 1998.

Note   The requirements for the financial statements prepared by the directors of a Commonwealth Authority and included in its annual report, under subitem 2 (1) of Schedule 1 to the Act are specified in separate Orders made under subsection 48 (1) of the Act for each financial year.

2              Commencement [see Note 1]

                These Orders apply to Commonwealth authorities in relation to financial years ending on or after 30 June 1999.

3              Interpretation

                In these Orders CAC Act means the Commonwealth Authorities and Companies Act 1997.

                Unless the contrary intention appears, an expression that is used in these Orders and in the CAC Act generally, or in a particular provision of the CAC Act mentioned in these Orders, has, in these Orders, the same meaning as in the CAC Act generally or in that particular provision of the CAC Act, as the case requires.

4              Report of operations

                Schedule 1 of these Orders specifies the requirements for the report of operations required to be prepared by the directors of a Commonwealth authority and included in its annual report under clause 1 of Schedule 1 of the CAC Act.

 


Schedule 1 — Report of Operations

Part 1 — Preliminary

1              Purpose

                This Schedule specifies the requirements for the report of operations required to be prepared by the directors of a Commonwealth authority and included in its annual report under clause 1 of Schedule 1 of the CAC Act.

2              Interpretation

                In this Schedule, unless the contrary intention appears:

 

Commonwealth authority means a Commonwealth authority or a parent authority and each of its subsidiaries, as the case requires.

effectiveness means the extent to which a Commonwealth authority has achieved the objectives or discharged the functions, as the case requires, set out in its enabling legislation.

efficiency means the extent to which a Commonwealth authority has maximised the outputs produced from a given level and quality of inputs or minimised the inputs used to produce a given level and quality of outputs.

financial results means the results shown in the financial statements of a Commonwealth authority.

financing activities means those activities which relate to changing the size and composition of the financial structure of a Commonwealth authority.

investing activities means those activities which relate to the acquisition and disposal of non-current assets, including property, plant and equipment and other productive assets and investments such as securities which are not cash or cash equivalents.

operations means activities and processes performed in pursuing the objectives or discharging the functions, as the case requires, of the Commonwealth authority.

outcomes means the results, impacts or consequences of actions by the Commonwealth public sector on the Australian community.

outputs means the goods or services produced by the Commonwealth authority for external organisations or individuals. Outputs include goods and services produced for other areas of the Commonwealth public sector external to the authority. Goods and services produced by an authority for consumption within that authority are not regarded as outputs.

parent authority means a Commonwealth authority that has a subsidiary.

period covered by the report means the period from the first day of the financial year to the date on which the report of operations was certified by the directors as being made in accordance with clause 4.

3              Exemptions

         (1)   In special circumstances, the Finance Minister, or a delegate of the Finance Minister, may grant a written exemption to the directors of a Commonwealth authority, or a class of Commonwealth authorities, from any requirement specified in this Schedule.

         (2)   An exemption under subclause (1) may be granted subject to conditions.

         (3)   Particulars of an exemption granted under subclause (1) must be given in the reports of operations to which the exemption applies.

4              Certification

         (1)   The report of operations must:

                (a)    be made in accordance with a resolution of the directors; and

               (b)    be signed by a director; and

                (c)    specify the date on which the report is made; and

               (d)    state that the directors are responsible under section 9 of the CAC Act for the preparation and content of the report of operations in accordance with Finance Minister’s Orders.

         (2)   If the Commonwealth authority has only one director, the report of operations must:

                (a)    be signed by the director; and

               (b)    specify the date on which the report is made; and

                (c)    state that the director is responsible under section 9 of the CAC Act for the preparation and content of the report of operations in accordance with Finance Minister’s Orders.

Part 2 — Form and content of the Report of Operations

Division 1 — Overview

5              Content

                The report of operations must include:

                (a)    the general information required by Division 2; and

               (b)    the specific information required by Division 3; and

                (c)    any other information required by Division 4.

6              Standards of presentation

         (1)   The report of operations must be constructed having regard to the interests of users.  Information included in the report must be relevant and reliable and should be concise, readily understandable and balanced.

         (2)   The text of the report of operations should be free of ambiguity, jargon and excessive use of acronyms and technical terms.

         (3)   Use should be made in the report of operations of appropriate tables, graphs, diagrams and charts to illustrate and explain matters dealt with in the report.

         (4)   The report of operations may be accompanied by, or incorporate, other reports (for example, a chief executive officer’s report) not inconsistent with the report of operations, which meet the standards required by this clause.

         (5)   This Schedule should not be construed as specifying a particular structure for the report of operations, nor as limiting the directors as to any additional matters they may consider appropriate to report upon.

7              Obtaining information from subsidiaries

                If, having taken all reasonable steps as are available to them, the directors of the Commonwealth authority are unable to obtain information from a subsidiary that is required for the purposes of the report of operations within the time necessary to enable the presentation of the annual report to the responsible Minister within the period required under section 9 of the CAC Act, the directors should:

                (a)    prepare the report of operations without incorporating the information; and

               (b)    include such qualifications and explanations in the report of operations as are necessary to prevent the report from being misleading.

Division 2 — General information about operations and activities

8              Enabling legislation and responsible Minister

                The report of operations must specify:

                (a)    the Commonwealth authority’s enabling legislation and the objectives and functions, as the case requires, set out in that legislation; and

               (b)    the name of the responsible Minister at the date of the report and the names of any other responsible Ministers during the period covered by the report.

9              Outline of organisational structure

                The report of operations must provide an outline of the organisational structure of the Commonwealth authority (including subsidiaries) and the location of major activities and facilities.

10            Review of operations and future prospects

         (1)   The report of operations must include the following information:

                (a)    a review of how the Commonwealth authority has performed during the financial year in relation to:

                          (i)    its statutory objects and functions, as the case requires; and

                         (ii)    its corporate plan, where applicable; and

                         (iii)    its principal outputs and contribution to outcomes; and

               (b)    factors, events or trends influencing its performance over the financial year and in the future, including the risks and opportunities that it faces and the strategies adopted or proposed to be adopted to manage those risks and opportunities;[1] and

                (c)    significant events referred to in section 15 of the CAC Act that have taken place during the financial year; and

               (d)    the operational and financial results of the authority during the financial year, including:

                          (i)    its principal outputs; and

                         (ii)    major investing and financing activities; and

                         (iii)    key financial and non-financial performance indicators; and

                (e)    significant changes in the authority’s state of affairs or principal activities that have occurred during the financial year; and

                (f)    developments since the end of the financial year, giving particulars of any matter or circumstance that has arisen and has significantly affected or may significantly affect:

                          (i)    the authority’s operations in future financial years; or

                         (ii)    the results of those operations in future years; or

                         (iii)    the authority’s state of affairs in future financial years.

         (2)   The assessment of performance required under paragraph (1) (a) should;

                (a)    address both the efficiency and effectiveness of the operations of the Commonwealth authority in producing its principal outputs; and

               (b)    make clear links between outcomes, strategies for achieving those outcomes and the principal outputs.[2]

11            Judicial decisions and reviews by outside bodies

                The report of operations must include particulars of:

                (a)    judicial decisions and decisions of administrative tribunals that have had, or may have, a significant impact on the operations of the Commonwealth authority; and

               (b)    reports on the operations of the authority by the Auditor-General (other than the report on the financial statements), a Parliamentary committee or the Commonwealth Ombudsman.

12            Effects of Ministerial directions

         (1)   The report of operations must provide particulars of any notifications of:

                (a)    any directions by the responsible Minister, or other Minister, under the enabling legislation of the Commonwealth authority or other legislation:

                          (i)    during the financial year; and

                         (ii)    since the end of the financial year; and

                         (iii)    continuing from previous financial years; and

               (b)    general policies of the Government by the responsible Minister under section 28 of the CAC Act:

                          (i)    during the financial year; and

                         (ii)    since the end of the financial year; and

                         (iii)    continuing from previous financial years.

         (2)   Where a notification reported under subclause (1) has not been fully complied with, the report should include an explanation of the extent of, and reasons for, the non-compliance.

13            Disclosure requirements for GBEs

         (1)   Subject to subclause (2), and to the extent that they are not covered by clause 10 of this Schedule, the following matters must be included in the report of operations of a Commonwealth authority that is a GBE:

                (a)    an assessment of:

                          (i)    any significant changes in overall financial structure and condition over the financial year; and

                         (ii)    any material events and uncertainties that would cause reported financial information not to be necessarily indicative of future operating results or financial condition; and

               (b)    the amount of dividends paid or recommended in relation to the financial year; and

                (c)    a description of any community service obligations, including:

                          (i)    an outline of the strategies and policies that the GBE adopted to achieve those obligations;

                         (ii)    an assessment of the cost of those obligations over the financial year.

         (2)   If the directors of the GBE believe, on reasonable grounds, that relevant information referred to in subclause (1) is commercially sensitive and, if it were included in the report of operations, would be likely to result in unreasonable commercial prejudice to the GBE:

                (a)    the information need not be included; and

               (b)    if the information is not included, the report of operations must state that some or all, as the case requires, of the information required has not been included.

Division 3 — Specific information

14            Directors

         (1)   The following particulars must be given in the report of operations with respect to the directors of the Commonwealth authority:

                (a)    each director’s name, qualifications, experience and special responsibilities and whether he or she is an executive director or a non-executive director; and

               (b)    the number of meetings of the board of directors held during the financial year and each director’s attendance at those meetings; and

                (c)    the number of meetings of each board committee held during the financial year and each director’s attendance at those meetings.[3]

         (2)   The particulars required by subclause (1) should be given for each director who was in office at the date of the report of operations or during the period covered by it, distinguishing between directors at the date of the report and those who ceased to be directors during the period covered by the report.

         (3)   The particulars required by paragraphs (b) and (c) of subclause (1) do not apply in the case of a Commonwealth authority which has only one director.

15            Audit committee

                The following particulars must be given in the report of operations with respect to the audit committee of the Commonwealth authority:

                (a)    each members’ name, position held within the Commonwealth authority and special responsibilities; and

               (b)    the number of meetings of the audit committee held during the financial year and each member’s attendance at those meetings.

16            Indemnities and insurance premiums for officers

         (1)   The report of operations must include details of:

                (a)    any indemnity that is given to a current or former officer against a liability, or any relevant agreement under which an officer may be given an indemnity of that kind; and

               (b)    any premium that is paid, or agreed to be paid, for insurance against a current or former officer’s liability for legal costs.[4]

         (2)   The details required under subclause (1) are:

                (a)    for an officer — their name or the class of officer to which they belong or belonged; and

               (b)    the nature of the liability; and

                (c)    for an indemnity given — the amount the authority paid and any other action the authority took to indemnify the officer; and

               (d)    for an agreement to indemnify — the amount that the relevant agreement requires the authority to pay and any other action the relevant agreement requires the authority to take to indemnify the officer; and

                (e)    for an insurance premium — the amount of the premium.

         (3)   The report of operations need not give details of the nature of the liability covered by, or the amount of the premium payable under, a contract of insurance to the extent that disclosure of those details is prohibited by the insurance contract.

Division 4 — Miscellaneous

17            Other statutory requirements

         (1)   The report of operations must include any matters required to be included in the annual report of the Commonwealth authority by:

                (a)    the authority’s enabling legislation; and

               (b)    any other legislation.

         (2)   Any requirements referred to in subclause (1) must include any such matters carried out by or through a subsidiary of the Commonwealth authority.

 


Notes to the Commonwealth Authorities and Companies Orders 1998

Note 1

The Commonwealth Authorities and Companies Orders 1998 (in force under section 48 of the Commonwealth Authorities and Companies Act 1997) as shown in this compilation is amended as indicated in the Tables below.

For application, saving or transitional provisions see Table A.

Table of Instruments

Title

Date of notification
in Gazette

Date of
commencement

Application, saving or
transitional provisions

Commonwealth Authorities and Companies Orders 1998

27 Aug 1998

27 Aug 1998

 

Commonwealth Authorities and Companies Orders (Amendment) 1998

(a)

Commonwealth Authorities and Companies Amendment Orders 1999 (No. 1)

1 Sept 1999 (see Gazette 1999, No. GN35)

1 Sept 1999

Commonwealth Authorities and Companies Amendment Orders 2000 (No. 1)

8 Nov 2000 (see Gazette 2000, No. GN44)

8 Nov 2000

O. 3

Commonwealth Authorities and Companies Amendment Orders 2001 (No. 1)

27 June 2001 (see Gazette 2001, No. GN25)

(b)

(a)        The Commonwealth Authorities and Company Orders 1998 were amended by the Commonwealth Authorities and Companies Orders (Amendment) 1998, order 1 of which provides as follows:

These Orders apply to Commonwealth authorities in relation to financial years ending on or after 30 June 1999.

(b)       The Commonwealth Authorities and Company Orders 1998 were amended by the Commonwealth Authorities and Companies Amendment Orders 2001 (No. 1), order 2 of which provides as follows:

These Orders commence on the commencement of the Commonwealth Authorities and Companies (Financial Statements 2000–2001) Orders.

The Commonwealth Authorities and Companies (Financial Statements 2000–2001) Orders commenced on 27 June 2001.

 

Table of Amendments

ad. = added or inserted      am. = amended      rep. = repealed      rs. = repealed and substituted

Provision affected

How affected

Note to o. 1.............................

ad. 2001 No. 1

O. 5 .........................................

ad. 1998

 

rep. 2001 No. 1

Note to o. 5 ............................

ad. 1999 No. 1

 

rep. 2001 No. 1

Schedule 2 ............................

ad. 1998

 

rs. 1999 No. 1; 2000 No. 1

 

rep. 2001 No. 1

Table A                Application, saving or transitional provisions

Commonwealth Authorities and Companies Amendment Orders 2000 (No. 1)

3              Application

                These Orders apply to the preparation of financial statements under section 9 of the Commonwealth Authorities and Companies Act 1997 in relation to financial year ending on or after 30 June 2001.

 

Commonwealth Authorities and Companies (Financial Statements 2000—2001) Orders

3              Financial statements for financial years ending on or after 30 June 2001 but before 30 June 2002

 

                For subitem 2 (1) of Schedule 1 to the Commonwealth Authorities and Companies Act 1997, Schedule 1 sets out the requirements for the preparation of financial statements for the financial year ending on 30 June 2001, or a financial year ending after that date but before 30 June 2002.

Note   Schedule 1 is identical to Schedule 1 to the Financial Management and Accountability (Financial Statements 2000–2001) Orders.  The purpose of having identical requirements is to achieve uniformity in financial reporting across the Commonwealth public sector which will assist in the preparation of annual financial statements in relation to the Commonwealth by the Finance Minister under section 55 of the Financial Management and Accountability Act 1997.  Accordingly, certain terms, requirements and references contained in Schedule 1 to these Orders apply to Commonwealth Authorities and not to Agencies while other terms, requirements and references apply to Agencies and not to Commonwealth Authorities.

Schedule 1          Annual financial statements

(section 3)

 

 


 



[1]In addressing paragraph 10(1)(b) directors should have particular regard to the ‘Year 2000 problem’ and provide an estimate of the expenditure likely to be incurred by the authority in addressing that issue.

[2] For Reports of Operations relating to financial years commencing on or after 1 July 1999, the presentation of outcome and output information for Commonwealth authorities in the ‘General Government Sector’ should be consistent with the relevant Portfolio Budget Statements under the arrangements for accrual budgeting.

[3] The reference in paragraph 14(1)(c) to each director’s attendance at meetings of each board committee is intended to refer, with respect to a particular board committee, to the attendance of only those directors who are, or were, members of that particular committee.

[4]At the time of the making of these Orders, sections 26 and 27 of the CAC Act contained general prohibitions against giving certain indemnities and paying certain insurance premiums.  If the Corporate Law Economic Reform Bill 1998 is enacted those sections will be omitted and replaced by sections 27M and 27N respectively.  Subclause 16(1) requires transactions that are exceptions to the prohibitions in sections 26 and 27, or sections 27M and 27N, as the case requires, to be reported.