Can Annual Reports be Believed or Improved?

With the release of 70 Annual Reports by the Queensland Government on the eve of a long weekend a cynic might ask are they hiding something or is it just a coincidence that the time set under the legislation for publication is the end of September which happened to coincide with a long weekend where attention of most is focused on football finals and not what the government has been doing over the last financial year.   

Can  tax payers and users of the various services of the government be  assured what they read is the full story and  the government is  open and accountable as our political representatives tell us, and these reports can be trusted. But can  we be sure that they meet recognised bench marks for open and accountable reporting. As the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has shown the short comings in this sector’s reporting, it is not unreasonable  to ask if all that is reported by government can be believed or are  we in the same situation as investors who once put their trust in the  banking and insurance organisational reports.  While the Queensland Government has stringent guidelines for departmental reporting  issued each year (www.forgov.qld.gov.au/sites/default/files/annual-report-requirements.pd) as do all three levels of  governments the question is are they followed and are these guidelines appropriate.  Very few Queensland agencies submit their reports for external scrutiny.

Last year only   8 Queensland agencies entered their reports for review by the Australasian Reporting Awards Limited (ARA), which is an independent not-for-profit organisation concerned with the quality of financial and business reporting. The ARA  has been reviewing and contributing to ensuring the quality and transparency of annual reports for the  last 60 years and have developed a set of well-respected reporting standards.   

It contributes to the ongoing improvement in the quality of reporting by preparing and widely distributing criteria based on world best practice aimed at improving the standards of annual reports which are  an essential mechanism of accountability and a  vital element in the governance process.

Entries for the 2019 ARA awards are now open for the 2017/18 financial year reports and close on 7 December 2018 and it will not only be interesting to see how many Queensland Government agencies enter and how many receive awards. Last year there were 3 gold award winners from Queensland Government Departments or agencies being the Department of Transport and Main Roads, Urban Utilities and the Gold Coast Hospital and Health Service.   The Children's Health Queensland Hospital and Health Service, the Crime and Corruption Commission and Department of Employment, Small Business and Training achieved a silver standard while the Motor Accident Insurance Commission and Cabinet and Queensland Treasury achieved a Bronze award.

One must applaud these authorities who are willing to submit their reports for scrutiny  but what of the others it will be interesting to see what happens this year. Paul Williams reported in the Courier Mail on 2 October that “40 per cent of Australians are dissatisfied with our democracy – the highest figure ever recorded, and one usually found in sham democracies and “banana republics”. Similarly, “trust in government”, at just 26 per cent, is the lowest ever, with just 12 per cent believing government is run in everybody’s interest.” A perceived lack of open reporting  or a belief in what government says is the full story could contribute to this.

If agency annual reports truly reflect  what is happening in achieving outcomes for the benefit of the community and they are produced in accordance with acknowledged standards of transparency this may allay the  mistrust in the various levels of  government and their agencies which currently exist.  

Let’s see how many are willing to submit their reports to the ARA for review this year and how many stack up to the criteria for excellence in reporting.

Further  information on the ARA is available at https://aranew.azurewebsites.net/