6.1.1 Introduction

Monitoring of GBE performance by the Government is achieved by each GBE providing performance reports against agreed performance indicators. Performance reporting assists the Government in assessing the efficiency and effectiveness of each GBE’s operations and allows for the timely detection of adverse financial performance changes in GBEs.

6.1.2 Timing

Section 57 of the GBE Act requires the Board of each GBE to prepare a quarterly performance report for the first three quarters of each financial year and submit it to the Portfolio Minister and the Stakeholder Minister by:

• 31 October (first quarter);
• 30 January (second quarter); and
• 30 April (third quarter) each financial year.

6.1.3 Responsibility of the Board

The Board’s responsibility is to prepare a quarterly performance report in accordance with the Treasurer’s Instructions and submit the report to the Portfolio Minister and the Stakeholder Minister by the required deadline.

In preparing each quarterly performance report, it is the responsibility of the Board to:

• review trends in the financial performance of the GBE;
• seek information from the CEO where the actual financial performance of the GBE differs materially (at least ten per cent) from budgeted levels, including reasons for the changes in financial performance, any action taken or that will be taken in the future and the long-term effects of any changes in financial performance;
• include in the quarterly performance report any future events which are expected to impact on the future operations of the GBE, such as industry competition, economic trends and legislation review programs affecting the GBE and, if possible, information on the magnitude of the impact and the likelihood of the change occurring; and
• provide advice to the Portfolio Minister and the Stakeholder Minister on the reasons for any changes in financial performance and the long-term effects of such changes, particularly in terms of likely changes in future payments to the Consolidated Fund and levels of return on equity in respect of the Government’s investment in the GBE.

The Board’s responsibility to prepare the quarterly performance reports of the GBE is usually delegated to the CEO. Where this is the case, the CEO has the responsibility for ensuring that the quarterly performance reports are prepared and submitted by the required deadlines and in accordance with the Treasurer’s Instructions.

The CEO must provide sufficient detail in each quarterly report and must properly explain significant variations between budgeted and actual financial performance, including future implications of any significant variance between budgeted and actual financial performance on the Government’s investment in the GBE, in order for Treasury to assess the efficiency and effectiveness of the GBE’s operations and provide advice to the Stakeholder Minister.

6.1.5 Role of Treasury

Treasury monitors each GBE’s Quarterly Report to ensure compliance with Treasurer’s Instruction 08-57-01 or 08-57-01P. Treasury also analyses each GBEs Quarterly Report to determine trends in the financial performance of the GBE, and provides a summary of the analysis to the Stakeholder Minister.

6.1.6 References

Further detail in relation to the preceding section can be found in the following references:

• GBE Act - section 57
• Treasurer’s Instruction GBE 08-57-01, Quarterly Reports,October 1995
• Treasurer’s Instruction GBE 08-57-01P, Quarterly Reports (HEC, HECEC and Tascorp), September 1995

6.2.1 Introduction

Financial statements are a necessary source of information for monitoring the financial performance of each GBE. Financial statements include an operating statement, a statement of financial position and a statement of cash flows.

6.2.2 Timing

Section 52 of the GBE Act requires that, by 29 August each financial year, the Board must:

• prepare and certify the financial statements of the GBE to be in accordance with the current applicable Treasurer’s Instructions; and
• provide the Auditor-General with the GBE’s financial statements and consolidated financial statements, where appropriate.

6.2.3 Responsibility of the Board

The Board’s responsibility is to ensure that the financial statements are completed by the due date. Under section 52 of the GBE Act, the financial statements should include:

• a profit and loss statement;
• a balance sheet;
• a cash flow statement;
• a statement of income tax equivalence;
• statements, reports and notes, attached to, or intended to be read in conjunction with, the financial statements;
• a statement of compliance; and
• any other information required by the Treasurer’s Instructions.

6.2.4 Responsibility of the CEO

The Board’s responsibility to prepare financial statements is usually delegated to the CEO. Accordingly, the CEO must ensure the financial statements are prepared by 29 August each year.

The CEO must, as soon as possible, advise the Board if the financial statements cannot be prepared by the due date. In such a case, the CEO should explain to the Board the reasons for the inability to complete financial statements within the due date. The Board must prepare a submission to the Stakeholder Minister by 15 August for an extension of time in which to prepare the financial statements of the GBE.

6.2.5 References

Further detail in relation to the preceding section can be found in the following references:

• Australian Institute of Company Directors, 50 Matters to be Considered by Directors Prior to Signing a Company's Financial Statements
• GBE Act - Sections 52 and 53
• Treasurer’s Instruction, GBE 08-51-02, Application of Accounting Standards, June 1996
• Treasurer’s Instruction, GBE 08-52-01, Financial Statements, May 1997
• Treasurer’s Instruction, GBE 08-52-02, Certification of Financial Statements, June 1996
• Australian Accounting Standards:
• AAS 1, Profit and Loss or other Operating Statements, October 1995
• AASB 1034, Information to be Disclosed in Financial Reports, December 1996
• AAS 28, Statement of Cash Flows, December 1991

6.3 ANNUAL REPORTS

6.3.1 Introduction

The GBE annual report contains the achievements and financial results of a GBE during the financial year to which the report relates.

6.3.2 Timing

Section 56 of the GBE Act requires the Portfolio Minister to table before Parliament the GBE’s annual report within five months after the end of the financial year (30 November for all GBEs except the Totalizator Agency Board, which has until 31 December to table its Annual Report each financial year).

6.3.3 Responsibility of the Board

The Board is to prepare the GBE annual report each financial year and provide it to the Portfolio Minister, Stakeholder Minister and the Auditor-General. The statutory disclosure requirements of the annual report are detailed in section 55(2) of the GBE Act. The annual report must be accompanied by a Statement of Corporate Intent for the following financial year, which must be signed and dated by at least two Directors.

In addition to the statutory disclosure requirements the Board can report additional information in the GBE’s annual report. Such additional information could include:

• highlights of the financial year to which the annual report relates, including any developments in financial performance, pricing policies, customer relations and other information;
• an overview of the financial year to which the annual report relates, written by the Chairman of the GBE;
• an overview of the key operational areas of the GBE;
• a five year summary, containing key elements of the balance sheet, profit and loss statement and cash flow statement as well as a statement of key performance indicators (including financial and non-financial performance indicators), both in tabular and graphical form;
• forward projections for key performance objectives beyond the subsequent financial year to which the annual report relates such as Net Profit, Return on Assets, Return on Equity and non-financial performance measures relating to the efficiency and effectiveness of each GBE’s operations, for example staff turnover and accident free work days;
• any information relating to activities of the Board of the GBE, such as Corporate Governance Practices followed by GBEs, Board composition, types of Board committees and activities of each Board committee and number of attendances of the GBE Board and each Board committee;
• information relating to the employees of the GBE; and
• any other information which the Board wishes to include in the GBE’s annual report.

6.3.4 Responsibility of the CEO

The Board usually delegates the preparation of the Annual Report to the CEO . The CEO has the responsibility of ensuring that the annual report is completed in sufficient time so as to enable the tabling before Parliament of the annual report by 30 November each financial year.

6.3.5 Role of Treasury

Treasury reviews each GBE’s Annual Report and monitors each GBE’s achievement of Key Performance Objectives such as Net Profit, Return on Assets, Return on Equity and non-financial performance measures relating to the efficiency and effectiveness of each GBE’s operations. Treasury provides a report to the Stakeholder Minister summarising the financial and non-financial performance of each GBE against the targets set in the corporate plan and prior year results.

6.3.6 References

Further detail in relation to the preceding section can be found in the following references:

• GBE Act - sections 55 and 56;
• Treasurer’s Instruction GBE 06-41-01, Statement of Corporate Intent, September 1995
• Treasurer’s Instruction, GBE 08-55-01, Statement of Compliance, June 1996