Australian Prudential Regulation Authority

Chapter 9 - Statutory report
 
Statutory reporting requirements
 
APRA reports in accordance with the following Commonwealth legislation and other requirements:
APRA's financial arrangements are also subject to the Financial Management and Accountability Act 1997.
 
Australian Prudential Regulation Authority Act 1998 (APRA Act)
 
Section 59 of the APRA Act requires APRA to report on:
APRA did not appoint any ADI statutory managers or persons to conduct an investigation under Division 2 of Part II or section 61 of the Banking Act 1959 during 2010/11. There were no continuing appointments during the year.
 
There were no schemes in operation under Division 2AA of Part II of the Banking Act 1959.
 
On 15 October 2009, the Minister made a declaration under section 62ZZC of the Insurance Act 1973 that Division 3 of Part VC of that Act applied in relation to a general insurer1. Payments totaling $72,968 were made to claimants out of the Financial Claims Scheme Special Account in 2010/11.
 
APRA did not exercise its powers under Part 15 of the RSA Act in 2010/11.
 
APRA exercised its powers under Part 29 of the SIS Act as set out below:
 
Exemption number Date Provision of SIS Act/regulations exempted
A19 of 2010 10/08/2010 Regulation 13.17A
A20 of 2010 29/07/2010 Regulations 9.29A and 9.30
A21 of 2010 03/08/2010 Regulation 7.04
A22 of 2010 30/08/2010 Regulations 9.29 and 9.30
A23 of 2010 31/08/2010 Regulation 9.04D(1)
A25 of 2010 21/09/2010 Regulation 9.04D(1)
A26 of 2010 21/12/2010 Regulation 9.04D(3)
A27 of 2010 11/11/2010 Regulation 13.17A(1)(b)
A1 of 2011 25/02/2011 Section 36
A2 of 2011 09/02/2011 Regulation 9.04D(1)
A3 of 2011 04/03/2011 Regulations 9.29A and 9.30
A5 of 2011 01/03/2011 Regulation 9.04D
A6 of 2011 18/03/2011 Regulations 9.29 and 9.30
A7 of 2011 18/03/2011 Regulation 9.04D
A8 of 2011 23/03/2011 Regulation 7.04(1)
A10 of 2011 30/03/2011 Regulation 6.34
A11 of 2011 18/04/2011 Regulation 6.34
A12 of 2011 29/06/2011 Regulation 9.30(2)
A14 of 2011 29/06/2011 Regulations 9.08, 9.09, 9.17, 9.23, 9.24, 9.25 and 9.30
 
Modification declaration
number - particular entity
Date Provision of SIS regulations modified
A3 of 2010 27/07/2010 Section 332 and Regulations 8.02A, 8.03 and 8.04
A4 of 2010 04/08/2010 Section 29CC(1)
A5 of 2010 21/09/2010 Regulation 6.17(2)(a)(i)
A6 of 2010 29/10/2010 Section 29CC(1)
A1 of 2011 17/02/2011 Regulation 6.17(2)(a)(i)
A2 of 2011 04/03/2011 Regulation 1.03
A3 of 2011 01/03/2011 Regulation 1.03
A4 of 2011 04/03/2011 Regulation 7A.03H
A5 of 2011 15/04/2011 Regulation 6.17
A6 of 2011 03/05/2011 Regulation 1.03
A7 0f 2011 24/06/2011 Regulation 1.03
A8 of 2011 24/06/2011 Regulation 1.03
 
Environment Protection and Biodiversity Conservation Act 1999
 
Ecologically sustainable development and environmental performance
 
APRA's Environmental Policy Statement reinforces its commitment to operating in an ecologically sustainable manner and APRA continues to take practical steps to reduce its environmental impact. Measures include zone-controlled lighting; energy-efficient power management settings on office equipment; recycling of paper, cardboard and printer cartridges; and staff awareness.
 
During 2010/11, APRA's Environmental Issues Subgroup (EIS) investigated 'going green' issues in APRA's day-today operations referred by staff, as well as areas where APRA could reduce wastage and carbon emissions. The EIS has been active in encouraging recycling activities and in providing education about environmental alternatives.
 
APRA will continue to make improvements in its environmental management and, where possible, adopt environmentally friendly options.
 
EEO staff data - staff diversity as at 30 June 2011*
Level Female Male ATSI NESB1 NESB2 PWD
Level 1 23 10 0 7 0 0
Level 2 76 29 0 28 0 1
Level 3 70 95 0 58 3 2
Level 4 76 135 1 43 3 2
Senior 17 78 0 10 2 1
Executive 0 7 0 1 0 0
Total 262 354 1 147 8 6
* Includes permanent and fixed-term staff but excludes casuals.
ATSI Aboriginal and Torres Strait Islander
NESB1 Non-English-speaking background, first generation
NESB2 Non-English-speaking background, second generation
PWD People with disability
 
Equal Employment Opportunity (Commonwealth Authorities) Act 1987 (EEO Act)
 
Workplace diversity program report
 
APRA has taken a proactive and innovative approach to meeting its responsibilities under the EEO Act by establishing a comprehensive workplace diversity strategy. This includes flexible and inclusive employment that values and utilises the contribution of people of different backgrounds, experiences, perspectives and abilities. The strategy retains the essential EEO principles in relation to non-discrimination and equal employment opportunity, and also recognises the broader concept of diversity in ensuring a tolerant workplace free from all forms of harassment.
 
Each year, members of APRA's Staff Consultative Group and selected human resources staff receive detailed training by a specialist diversity provider, Diversity Council Australia, in order to perform the important role of Contact Officer. APRA's Contact Officers are available to provide confidential and impartial assistance to any staff with workplace diversity concerns at APRA.
 
APRA is committed to ensuring staff are given appropriate assistance in balancing their work, home, family and other personal commitments. In line with this, APRA offers a range of flexible work arrangements including coreless variable hours, a compressed work week and purchased additional leave, job-sharing, telecommuting, and leave options for the purpose of family responsibilities and career/personal development. APRA also provides a range of 'family friendly' benefits including 14 weeks paid maternity leave, two weeks paid partner's leave and a 'Keep-in-Touch' program for women on maternity leave. In recognising that staff with dependents may require further assistance, APRA has services available to assist such staff in making care arrangements. In addition, APRA is committed to retaining the skills, expertise and corporate knowledge of staff approaching retirement age through a 'Transition to Retirement' program and other measures.
 
Freedom of Information Act 1982 (FOI Act)
 
The FOI Act provides the public with a general right of access to documents held by Commonwealth agencies, including APRA. This general right is limited by exceptions needed to protect essential public interests or the privacy and business affairs of those who give information to APRA or the Commonwealth.
 
In 2010/11, APRA dealt with 18 applications for access to documents under the FOI Act and one application for internal review. Of the 18, two were on hand at the beginning of the period and the other 16 were new applications. One applicant disagreed with APRA's decision on access to documents and applied to the Information Commissioner for review under Part VII of the FOI Act. This application for review has not been determined by the Commissioner.
 
During the year, the FOI applications for access were dealt with as follows:
 
Granted in full 5
Granted in part 3
Access refused 6
Withdrawn 2
Transferred to another agency 0
On hand at 30 June 2011 2
Total 18
 
Charges collected were $1,060 and the estimated cost of handling initial FOI requests and internal review requests in 2010/11 was approximately $28,727. The estimated cost of handling external review applications was $2,052.
 
Section 8 statement for the period 1 July 2010 - 30 April 2011
 
As a result of recent reforms to FOI legislation, the Annual Report publication requirements in section 8 of the FOI Act ('section 8 statement') were amended with effect from 1 May 2011. The section 8 statement has been replaced by the publication requirements of the Information Publication Scheme.
 
The following section 8 statement covers the period 1 July 2010 to 30 April 2011:
 
Initial contact for requests under FOI Act
 
Requests under the FOI Act should be made in writing, together with the prescribed fee, to:
 
The FOI Coordinator
Australian Prudential Regulation Authority
GPO Box 9836
Sydney NSW 2001
Phone: 02 9210 3000
Fax: 02 9210 3424
Email: foi@apra.gov.au
 
Access to documents
 
APRA makes its publications available to the public on the APRA website, free of charge. The website contains application forms, regulatory information, prudential statements, circulars and guidelines covering the types of entities that APRA regulates.
 
Questions about publications should be made to:
 
Media and Communications
Australian Prudential Regulation Authority
GPO Box 9836
Sydney NSW 2001
Phone: 02 9210 3000
Fax: 02 9210 3170
 
Categories of documents
 
APRA maintains the following categories of documents covered by section 8(1)(a)(iii) of the FOI Act available to the public free via APRA's website at www.apra.gov.au:
Information Publication Scheme
 
From 1 May 2011, APRA was required to publish on its website 10 categories of information, including information about its structure, functions and statutory appointments; 'operational information' that guides its decisions or recommendations that affect members of the public; and information about how the public can comment on its prudential policy proposals.
 
APRA's information publication plan shows the information APRA publishes in accordance with these Scheme requirements and is accessible from the APRA website.
 
Occupational Health and Safety Act 1991 (OHS Act)
 
Details of investigations and other matters as prescribed
 
In compliance with reporting obligations under section 74 of the OHS Act, there were:
Measures taken to ensure health, safety and welfare of employees and contractors
 
Responsibilities imposed by the OHS Act were identified and allocated to individual staff members. They included the identification and training of two new health and safety staff representatives in Melbourne and Sydney.
 
Procedures for dealing with health and safety issues are published on APRA's intranet site and are included in staff induction programs.
 
During 2010/11, a new online ergonomic assessment tool was piloted across a small group of Sydney staff. This tool helps to identify any OHS risk with respect to desk-based work through the completion of a short online survey completed by staff. Following the successful pilot, the product was rolled-out to the Adelaide, Brisbane, Perth and Canberra Offices. The roll-out to Melbourne and Sydney offices will take place early in 2011/12.
 
First-aid services for the treatment of work-related injury or illness, including appropriately trained first-aid officers, are situated at all work locations. Rehabilitation services and support are provided to injured employees. Four new first-aid/deputy first-aid officers were trained in 2010/11.
 
Comprehensive health assessments continue to be provided to staff at senior levels as well as to those aged 50 and over. Shorter health checks are provided to staff aged 40-49 and a 15-minute 'cardiac risk assessment' check to all other staff. These assessments are not compulsory and APRA is provided with statistical data only (not personal details or results of the assessments). As in previous years, all staff are offered an annual influenza vaccination; in 2010/11, 45 per cent of staff accepted this offer compared with 53 per cent the previous year.
 
OHS policies including establishment of staff committees and selection of health and safety representatives
 
APRA has arrangements for consultation on all occupational health and safety issues, including maintenance of the OHS Committee with four staff and four management representatives.
 
The OHS Committee satisfies legislative requirements, including meeting at least every three months and providing all staff with access to minutes of the meetings.
 
Statistics requiring the giving of notice under section 68
 
During the year, two incidents on APRA's premises were notified to APRA, neither of which required a report to Comcare under section 68 of the OHS Act.
 
Other reporting
 
Advertising and market research
 
The Commonwealth Electoral Act 1918 requires Commonwealth agencies to report annually on the amounts paid to advertising agencies, market research and media advertising organisations. In 2010/11, APRA paid $190,948 to Adcorp Australia Ltd for recruitment advertising and $51,647 to Australian Survey Research Pty Ltd for the Stakeholder Survey. APRA conducted no advertising campaigns during 2010/11.
 
Auditor-General's activities
 
The Australian National Audit Office (ANAO) undertook the required statutory financial audits of APRA for 2010/11. APRA was not subject to any performance audits by the ANAO during the year.
 
Certified Employment Agreements
 
On 1 July 2011, the APRA Employment Agreement, 2008 was replaced by the APRA Employment Agreement, 2011. As at 30 June 2011, 526 staff were covered by the APRA Employment Agreement, 2008. One hundred and one senior staff were covered by common law agreements.
 
All staff are appointed under the APRA Act. APRA applies a total remuneration approach whereby all salary, superannuation and 'salary sacrifice' benefits are included in an employee's total remuneration package (TRP).
 
The TRP pay ranges for non-executive staff as at 30 June 2011 were:
 
Level 4 $110,600 - $184,300
Level 3 $77,500 - $129,100
Level 2 $52,800 - $88,000
Level 1 $36,800 - $61,300
 
Commonwealth Disability Strategy
 
Since 1994, Commonwealth departments and agencies have reported on their performance as policy adviser, purchaser, employer, regulator and provider under the Commonwealth Disability Strategy. In 2007/08, reporting on the employer role was transferred to the Australian Public Service Commission's State of the Service Report and the APS Statistical Bulletin. These reports are available at www.apsc.gov.au. From 2010/11, APRA is no longer required to report on its performance under these various roles.
 
The Commonwealth Disability Strategy has been overtaken by a new National Disability Strategy that sets out a ten-year national policy framework for improving life for Australians with disability, their families and carers. A high level report to track progress of people with disability will be produced by the Standing Council on Community, Housing and Disability Services for the Council of Australian Governments and will be available at www.fahcsia.gov.au. The Social Inclusion Measurement and Reporting Strategy agreed by the Government in December 2009 will also include some reporting on disability matters in the regular How Australia is Faring report and, if appropriate, in strategic change indicators in APRA's Annual Reports. More detail on social inclusion matters can be found at www.socialinclusion.gov.au.
 
Commonwealth Fraud Control Guidelines
 
The Chairman of APRA certifies that he is satisfied that:
Commonwealth Ombudsman
 
In 2010/11, the Commonwealth Ombudsman conducted investigations into 35 matters, 31 of which related to applications for early release of superannuation benefits. At 30 June 2011, three of these matters were still to be finalised. As a result of these investigations, the Commonwealth Ombudsman made no adverse findings regarding APRA's operations.
 
Commonwealth Procurement Guidelines
 
The APRA Chairman's Finance Instructions and Financial Policies, and associated operational procedures, ensure that APRA's procurement process complies with the Commonwealth Procurement Guidelines (CPGs). In particular, they ensure that the core procurement principle of value for money is observed.
 
As an FMA Act agency, APRA conducts its procurement processes within the CPGs, including but not limited to:
In 2010/11, APRA had no AusTender-exempt contracts and all APRA competitively tendered contracts over $100,000 provided for the Auditor-General to have access to the contractor's premises.
 
Consultancies
 
APRA's Chairman's Finance Instructions and Financial Policies, and associated operational procedures, include specific provisions on consultants. Considerations prior to engagement include whether in-house resources are available; the cost-effectiveness of the operation and whether the project is essential; availability of funds; a selection and evaluation process resulting in fair competition, effective services and value for money; project definition and outcomes; and superannuation implications.
 
The main purposes for which consultants were engaged in 2010/11 were financial and accounting services, IT consultancies, legal advice, litigation services and professional services.
 
During 2010/11, APRA entered into 24 new consultancy contracts each valued at over $10,000, involving total expenditure of $3.9 million. In addition, 25 other consultancy suppliers were active during the year, involving total expenditure of $1.64 million. Total expenditure on consultancies in 2010/11 was $5.54 million, including $0.66 million of capitalized expenses.
 
Annual Reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website www.tenders.gov.au.
 
Consultative arrangements
 
APRA consults extensively with regulated entities, industry bodies and other interested parties prior to formulating or amending prudential policies or finalising prudential standards.
 
APRA complies with the Government's policy on best practice regulation. During 2010/11, APRA fully met the requirements of the Office of Best Practice Regulation (OBPR) for Regulation Impact Statements on new legislative instruments (two in number). In addition, APRA completed 16 preliminary assessments for other regulations made or tabled during this period, for which the OBPR advised that no further regulation analysis was required.
 
Courts and tribunals
 
Over 2010/11, there were no judicial decisions that had or may have a significant effect on APRA's operations.
 
APRA's supervisory activities in 2010/11 section of this Report contains details of court and tribunal decisions relating to enforcement action taken by APRA during the year.
 
Executive and consultative committees from 1 July 2010 to 30 June 2011
 
Management Group
 
This Group comprises the APRA Members and the Executive General Managers and is responsible for high-level information-sharing and decisions on more routine supervisory and organisational matters. It meets weekly or more frequently as required.
 
Leadership Team
 
The Leadership Team, which comprises APRA Members, Executive General Managers and General Managers, meets twice a year to develop APRA's strategic and business plans, to monitor performance against plans and to discuss major operational issues.
 
Steering Groups
 
To strengthen its efficiency and effectiveness and to coordinate decision-making across its different divisions, APRA has three Steering Groups responsible for the prioritisation and implementation of a range of initiatives. These Groups comprise an APRA Member as Chair and relevant Executive General Managers and General Managers. The Groups are:
Industry groups
 
There are four industry groups, comprising representatives of the various divisions of APRA. They cover APRA's four regulated industries:
These groups are important fora for identifying and seeking an APRA-wide assessment of emerging industry issues. Their main roles are to liaise with industry so as to identify emerging trends and to act as a sounding board for prudential policy issues in the different industries, prior to presentation of these issues to the Executive Group.
 
Cross-Divisional Licensing Committee
 
This Committee, comprising representatives from across APRA, seeks to assist supervisors considering licence applications and ensure consistency in licensing practice and application across all APRA-regulated industries. It provides APRA-wide guidance on issues that need to be considered in licensing submissions and, after consideration of an application, recommends to the relevant Executive General Manager action to be taken.
 
Enforcement Committee
 
This Committee comprises an APRA Member as Chair, an Executive General Manager and representatives of Supervision, Enforcement and Legal. It ensures that a whole-of-APRA perspective is brought to potential, and actual, investigation and enforcement actions. The Committee monitors ongoing enforcement actions and provides a forum to ensure a consistent approach is taken to any significant use of coercive powers by areas within APRA.
 
International committees
 
APRA has two committees that coordinate its involvement with international bodies, one for banking and one for insurance. Their purpose is to prioritise resource allocation for APRA's involvement in international activities, coordinate consistent and timely responses to issues raised in the relevant international fora and ensure information from international sources is communicated effectively within APRA. Membership includes senior APRA staff involved in international committee work and also draws on other APRA staff with relevant expertise.
 
Occupational Health and Safety Committee
 
This Committee, which includes both staff and management representatives, focuses on issues to do with the health, safety and wellbeing of staff and ensures that these are integrated into broader management systems and practices.
 
Staff Consultative Group
 
This Group facilitates communication and consultation with all APRA staff below the senior management level on the terms and conditions of their employment (including the Human Resources Policy Manual) and the impact of these on APRA's organisational culture and values.
 
Security Group
 
This Group is the key forum for maintaining strategic and operational oversight of APRA's security policy, initiatives and their implementation. Its main priority is to develop an over-arching policy and governance strategy on all security matters affecting APRA and to take the measures necessary to implement the strategy.
 
Grant programs
 
Grant programs, including discretionary grant programs, that APRA either jointly administers or participates in are the:
Information on the Brian Gray Scholarship program and a list of previous winners is on APRA's website (www.apra.gov.au/AboutAPRA/WorkingAtAPRA/Pages/briangray-scholarship-program.aspx. Information on other grants awarded by APRA is available on APRA's website at: www.apra.gov.au/AboutAPRA/Pages/grants-and-scholarships.aspx.
 
Indemnities and insurance premiums
 
APRA Members and officers are covered by the professional indemnity insurance cover of the Commonwealth-managed insurance scheme, Comcover. The generic terms and conditions of the insurance cover provided by Comcover to Commonwealth agencies are available on the Comcover website www.finance.gov.au/comcover. Under the conditions of the cover, APRA is prohibited from disclosing the specific nature and limit of the liabilities covered and the amount of the premium.
 
Legal Services Directions 2005
 
The Legal Services Directions 2005 require Commonwealth agencies to make available publicly information on records of their legal services expenditure for the previous financial year.
 
During 2010/11, APRA's total expenditure on external legal advice and litigation services was $2.83 million (including GST).
 
Parliamentary committees
 
Avenues through which APRA is accountable to the Parliament include Parliament's ad hoc and standing committees, and specific references on legislation or issues of particular interest to Parliamentary committees.
 
During 2010/11, APRA Members and officers made themselves available for public hearings before the:
In November 2010, APRA made a submission to the Senate Economics References Committee's Inquiry into Competition into the Banking Sector.
 
In February 2011, APRA also made a submission to the Joint Committee on Corporations and Financial Services in its inquiry into Access for Small Business to Finance.
 
Transcripts of APRA's appearances before, and copies of its submissions to, parliamentary committees may be downloaded from its website www.apra.gov.au.
 
Performance pay
 
APRA has a performance bonus system, designed in consultation with staff and management and covering all employees. For 2010/11, the aggregate bonus pool was $4.52 million. Under deferred bonus arrangements introduced in the APRA Employment Agreement, 2010/11 bonuses will be paid in December 2011 to eligible staff still in APRA's employ at that date.
 
Privacy Commission
 
There were no investigations by the Privacy Commissioner under section 40 of the Privacy Act 1988 during 2010/11. No reports were served under section 30 of the Act. The Privacy Commissioner made no determinations under section 52, nor did APRA seek any under section 73.
 
There were no adverse or favourable comments made by the Privacy Commissioner in respect of APRA's operations.
 
Privacy inquiries relating to APRA should be addressed to:
 
The Privacy Officer
Legal Group
Australian Prudential Regulation Authority
GPO Box 9836
Sydney NSW 2001
Phone: 02 9210 3000
Fax: 02 9210 3424
 
Responsible Ministers
 
The Hon Wayne Swan MP, Deputy Prime Minister and Treasurer of the Commonwealth of Australia, has portfolio responsibility for APRA.
 
He is assisted in this role by the Hon Bill Shorten MP, Assistant Treasurer and Minister for Financial Services and Superannuation.
 
Staff statistics
 
Staff by location and full-time/part-time as at 30 June 2011*
Location Full-time Part-time Total
Adelaide 5 0 5
Brisbane 15 1 16
Canberra 3 0 3
Melbourne 65 5 70
Perth 3 2 5
Sydney 475 42 517
Total 566 50 616
 
Staff by division and full-time/part-time as at 30 June 2011*
Division Full-time Part-time Total
Corporate 112 15 127
Diversified Institutions 106 6 112
Policy, Research and Statistics 84 8 92
Specialised Institutions 132 12 144
Supervisory Support 132 9 141
Total 566 50 616
* Includes permanent and fixed-term staff but excludes casuals.
 
Full-time equivalent (FTE) staff strength as at 30 June 2011
Permanent 591.8
Fixed-term 7.6
Casual 2.9
Total 602.3
 
List of requirements
 
The following list of mandatory annual reporting requirements, as outlined in the Requirements for annual reports for departments, executive agencies and FMA Act bodies approved by the Joint Committee of Public Accounts and Audit, has been annotated with either 'not applicable' or the location of the information in this Report.
Part of Report Description
  Letter of transmittal
  Glossary
  Contact officer(s)
  Internet home page address and internet address for report
Review by Chairman  
Overview of Authority Overview
Role and functions
Organisational structure
Outcome and program structure
Report on performance Review of performance in relation to programs and contribution to outcomes
Actual performance in relation to deliverables and KPIs
Narrative discussion and analysis of performance
Trend information
Performance against service charter customer service standards
Discussion and analysis of the Authority's financial performance
Authority's resource statement and summary resource tables by outcomes
Developments since the end of the financial year that have affected or may significantly affect the Authority's operations or financial results in future
Corporate governance Statement of the main corporate governance practices in place
Compliance with the Commonwealth Fraud Control Guidelines
External scrutiny Significant developments in external scrutiny
Judicial decisions and decisions of administrative tribunals
Reports by the Auditor-General, a Parliamentary Committee or the Commonwealth Ombudsman
Management of human resources Assessment of effectiveness in managing and developing human resources to achieve the Authority's objectives
Statistics on staffing
Enterprise or collective agreements, determinations, common law contracts and AWAs
Performance pay
Assets management Assessment of effectiveness of assets management
Purchasing Assessment of purchasing against core policies and principles
Consultants Summary statement detailing consultancy arrangements and confirming that information on contracts and consultancies is available through the AusTender website
Australian National Audit Office access clauses Absence of provisions in contracts allowing access by the Auditor-General
Exempt contracts Contracts exempt from the AusTender process
Financial statements  
Other information Occupational health and safety (section 74 of the Occupational Health and Safety Act 1991)
Freedom of Information (subsection 8(1) of the Freedom of Information Act 1982)
Advertising and market research (Section 311A of the Commonwealth Electoral Act 1918) and statement on advertising campaigns
Ecologically sustainable development and environmental performance (Section 516A of the Environment Protection and Biodiversity Conservation Act 1999)
Grant programs
Correction of material errors in previous annual report

1. Australian Family Assurance Limited (in liquidation)