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Annual Report 2010-2011

Published: December, 2011

Perfomance Report

Strategic Planning and Performance Framework


The Central Land Council is aligning its strategic planning approach by integrating longer-term objectives and the outputs/outcomes-driven performance information framework with medium and long term financial planning and annual resource allocation.
In December 2010 various processes were commenced to develop a new strategic plan to guide the CLC’s efforts. It is anticipated the next five-year plan will be finalised by the Council and presented to the Minister later in 2011. During the year:
•   Management conducted a strategic planning workshop to review and develop the organisation’s goals and strategies
•   Management teams undertook action planning to develop detailed action plans for each for the strategies which will be aligned with the outputs and outcomes
•  Organisation structure review was commenced to determine the best way for CLC to organise itself to achieve its objectives
•  A performance measures review project was begun using a performance information framework known as the ‘performance dimension’ to assess and categorise suggested performance measures
•  A long-term financial model was developed to be used for forecasting the impact of growth and changes in the CLC’s operations.
Performance
2010-2011 was a growth year with CLC operations increasingly providing support and advocacy services to traditional owners.


The key achievements are described in the output chapters, but can be broadly described as -
•  Working with traditional owners to manage their land and resources, protect sacred sites and to progress economic development (Outputs 1.2, 3.1, 3.2, 3.3, and 3.4)
•  Pursuing traditional owners’ native title interests (see Output 6)
•  Guiding traditional owner community development aspirations (see Output 4.4)
•  Negotiating commercial agreements with parties interested in the use of Aboriginal land and the management of income arising from land use agreements
•  Representing the land interests and aspirations of Aboriginal people in Central Australia
•  Managing community-based ranger groups delivering a range of land management services.


Land use agreements, land management, and economic and community development benefits to traditional owners are increasing. This is evidenced by CLC’s 72 per cent growth from 123 employees at June 2007 to 211 employees today, even though the work associated with acquiring Aboriginal freehold title has diminished over the past 30 years.


Financial Performance


The CLC is funded on a cash basis with annual estimates of revenue less expenditure being ‘break even’.
The actual net revenue and expenditure results for the financial year ended 30 June 2011 against sources of funding was close to break even after accounting for capital commitments (effectively $nil – refer to Note 5 in the CLC and Native Title financial statements).


The CLC’s operational sources of revenue are detailed below. Continuing the trend of previous years, CLC has been successful in securing additional funds to perform services furthering outputs and outcomes. Broadly, the mix of income is similar to the previous year, with the exception of a grant secured for the purchase of land on behalf of the Huckitta Aboriginal Corporation.


Outputs classified under Natural Resource Management ($6.718m; 20 per cent) were the largest area of expenditure in 2010-2011. There has been an increase in this output group through the land management efforts of the CLC Ranger program, funded primarily through the Department of Sustainability, Environment, Water, Population and Communities (Federal) and the Indigenous Land Corporation (ILC).
As well as achieving land management objectives, significant elements of these programs also relate to employment, education and training (Output 3.2). Although funding for this program has been secured for the next three years, there is little flexibility in funds for growth, despite increased demand from communities to support additional ranger groups.
Economic development and commercial services incorporating land use agreements, employment, education and training, mining and commercial assistance accounts for the next largest expenditure output group: $6.321m or 19 per cent of the CLC’s total expenditure. This includes CLC’s core
statutory mining and land use agreement assistance functions; applications for consent to explore on Aboriginal land; costs relating to the CLC employment unit; tourism development; and pastoral development projects.
Advocacy and community development ($5.989m;
18 per cent) is another growing area of operations for the CLC. There continues to be unmet demand for community development resources. Further details on work performed within each of these output groups is contained elsewhere in this report.
The CLC is proactive in identifying cost recovery opportunities in accordance with relevant Commonwealth guidelines to mitigate any reduction in the level of and/or quality of service delivery in the performance of its functions. Productivity gains and cost recoveries have not kept pace with increasing costs, particularly in remote office management, services and salary costs.
Although an accounting surplus of $4.119m is reported in the CLC Statement of Comprehensive Income, this is mainly the net result of depreciation charged (expense) and revenue recognition accounting policies (resulting in extra revenue recognised). The Statutory Financial Statements have been subjected to the requirements of an Australian Accounting Standard which requires that all receipts for special purpose programs must be recognised as current year revenue although services remain unperformed and matching expenditure is to occur in future years. As with other government entities, CLC is not funded on an annual basis for non-financial asset depreciation or leave liabilities accrued. Within the CLC accounts, Note 16 provides some further detail of commitments against recognised revenue, which will be expensed in future years, likely resulting in an accounting deficit in those years.
Indigenous population growth and increasing traditional owner awareness of land use opportunities increases demand for CLC resources and services. Most of the CLC’s constituents reside in remote communities and the “costs of doing business” continue to increase faster than the growth in approved operational funding. In the mining sector applications for consent of
exploration titles continue to remain high despite the recent global downturn and federal resources taxation discussions.
In the 2010-2011 years, significant resources and attention were directed at the exploration consultation process in order to maximise the rate of processing of licences and permits, detailed elsewhere in this report.

 

SOURCE OF REVENUE 2010-2011

 

The Northern Territory Emergency Response by the Australian Government continues to draw heavily on the CLC’s resources, particularly around the issue of township leasing where a large number of community meetings have been required.

Capital Expenditure


The CLC moved into its Alice Springs office in May 2009, and has now identified some improvements needed to ensure the building meets growing and changing demands. Building works were completed during the year on three new houses for staff ranger program coordinators in Lajamanu, Yuendumu and Ti-Tree. Community Development is also facilitating significant capital investments on behalf of traditional owners. These are described in Output 4.4.


Estimates setting


The CLC effectively accounted and reported against 62 active funding agreements in 2011/2012. Funding agreements continue to often be presented with a one- or two-year timeframe, sometimes mid-way through the first year, with all levels of government. The timeframes and reporting requirements fail to recognise the significant lead times and commitment necessary for effective relocation, recruitment and training into the CLC region. The Australian National Audit Office published a view on Indigenous program management (AuditFocus May 2011, page 2) highlighting the disadvantages of using an annual funding cycle to minimise risk. The ANAO criticises such an approach because of the high level of administrative burden it creates for grantees and responsible agencies.


Improvements were made with some agencies, notably the Department of Sustainability, Environment, Water, Population and Communities, in consolidating requirements across a number of contracts. For ongoing programs, and for effective staff recruitment and retention, employment contracts must be longer term. CLC looks forward to working with all its partner agencies to give certainty into future years to allow best value from multi-year funding programs.


Staff costs account for around 60 per cent of the CLC’s expenditure. Retention and recruitment of quality staff continues to be a pressing issue. The recruitment costs of professional and experienced staff necessary to carry out CLC’s statutory
functions range from 15 per cent to 40 per cent of first year salary.
Budgetary pressures continue to mean important opportunities are missed in the performance of CLC’s statutory functions. There continue to be significant cost increases in Central Australia, including accommodation cost increases imposing additional cost pressure on recruitment. Where possible CLC has kept pace with increasing demand through increased productivity and efficiency, however given ongoing uncertainty in other income, further engagement and flexibility will be required to enable satisfactory performance of CLC’s functions.


With engagement on these issues, the CLC is well placed to continue its record of enhancing the social, political and economic participation and equity of its constituents.