Background

1. Four Northern Territory (NT) Land Councils are established under the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) to represent the interests of Aboriginal people within their respective regions and assist them with the management of Aboriginal land. The four NT Land Councils are corporate Commonwealth entities and must comply with the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule).

2. The Native Title Act 1993 (NTA) provides for the Land Councils’ responsibilities as native title representative bodies. The NTA provides a mechanism for the recognition of the rights and interests of Aboriginal and Torres Strait Islander people in land and waters according to their traditional laws and customs. The Central Land Council (CLC) was established in 1973 to represent the Aboriginal people of the central region of the NT. The Council has 90 members and an Executive Committee comprised of 11 members. In 2021–22, the CLC received $34.4 million from the Aboriginals Benefit Account for its operations and $15.9 million from specific purpose contracts (primarily from the Australian Government). It also received $82.8 million from land use rents and royalties in trust for distribution to its constituents.

Rationale for undertaking the audit

3. This performance audit is part of a series of audits of the governance of the NT Land Councils. It was conducted to provide independent assurance to Parliament that the Land Councils’ governance arrangements are effective in meeting legislative obligations under the ALRA, the NTA and the PGPA Act.

4. Land Councils play an important role in securing rights and realising benefits for Aboriginal constituents. Many external stakeholders, including government entities, non-government organisations, and Indigenous and non-Indigenous businesses, rely on the efficient and effective operation of the Land Councils.

Audit objective and criteria

5. The objective of the audit was to assess the effectiveness of the governance of the Central Land Council under the Aboriginal Land Rights (Northern Territory) Act 1976, the Native Title Act 1993 and the Public Governance, Performance and Accountability Act 2013.

6. To form a conclusion against this objective, the following high-level criteria were applied.

• Has the CLC appropriately exercised its decision-making authority under the Aboriginal Land Rights (Northern Territory) Act 1976, the Native Title Act 1993 and the Public Governance, Performance and Accountability Act 2013?
• Is the CLC effectively governing its legislative functions under the Aboriginal Land Rights (Northern Territory) Act 1976 and the Native Title Act 1993?
• Has the CLC established appropriate arrangements to promote the proper use and management of resources?

Conclusion

7. The Central Land Council’s governance arrangements under the Aboriginal Land Rights (Northern Territory) Act 1976, Native Title Act 1993 and Public Governance, Performance and Accountability Act 2013 are largely effective.

8. Land Council decision-making authority is exercised under multiple pieces of legislation. The delegation of functions and powers under this legislative framework is complex. While the CLC has an instrument of delegation for functions and powers under the ALRA, there is a lack of specificity and inappropriate reference to sub-delegation. Accountable Authority Instructions relating to PGPA Act powers and functions lack specificity. Greater clarity is required for the Northern Territory (NT) Land Councils in relation to how accountable authority delegations are meant to be implemented under the two Acts.

9. The CLC’s governance arrangements under the ALRA and NTA are largely effective. The establishment and governance of the Council and its Executive Committee are largely appropriate and comply with legislative requirements. Governance arrangements for the exercise of the CLC’s statutory functions (comprising negotiating and assisting with land use; assisting with commercial activities; consulting and obtaining informed consent; and distributing royalties and rents) are largely appropriate. There could be greater monitoring of land use agreements.

10. The CLC’s arrangements to promote the proper use and management of resources are largely appropriate, except for arrangements to identify and manage fraud risks and conflicts of interest. A largely fit for purpose policy and risk management framework is in place. Public reporting in the form of the corporate plan and annual report are largely consistent with legislative requirements. Significant attention is paid to performance measurement. Audit and Risk Committee member composition and rotation is consistent with its Charter, although the Audit Committee could improve its reporting and consideration of performance measures. The main deficiencies in the CLC’s arrangements to promote the proper use and management of resources are in relation to measures to support the integrity of operations: the system of fraud control is not fully effective and conflict of interest management is developing.

Supporting findings

Exercise of decision-making authority

11. The CLC has a delegation instrument for powers and functions that belong to the Council under the ALRA. Greater specificity in the delegation instrument in relation to the functions and powers that are being delegated would improve the instrument and provide greater clarity to delegates. The instrument sub-delegates ALRA functions where there is no legislative power for sub-delegation.

12. A document titled ‘Accountable Authority Instructions’ has been established by the CLC Chief Executive Officer (CEO). The Accountable Authority Instructions contain authorisations; however, the authorisations lack specificity in places. There is no governance document regarding how the CEO and Chair of the Land Council (the joint accountable authority) expect to manage their joint responsibilities. There is a lack of clarity as to whether the accountable authority of the CLC has any power to delegate under the PGPA Act and ALRA.

Governance under the Aboriginal Land Rights (Northern Territory) Act 1976 and the Native Title Act 1993

13. The CLC has an approved method of choice, which is largely followed. There is clear guidance on the roles and responsibilities of Council and Executive Committee members. There are approved meeting rules, which are followed. Council meetings and processes are designed to support informed decision-making by members although until April 2023 the CLC did not promote the accessibility of rules and minutes to its constituents. The reporting to the full Council by the Executive Committee, which has broad delegations, is insufficient and not consistent with the full Council’s accountability for all decisions made under the ALRA.

14. The CLC’s governance arrangements to exercise its statutory functions under the ALRA and the NTA are largely appropriate.

• Negotiating land use and access — There are established processes for negotiating and assisting with land use and access, although more could be done to monitor Part IV agreement terms and conditions. There is a backlog in processing Part IV agreements.
• Assisting with commercial and other activities — Mechanisms to assist with commercial activities are established and the CLC has a Community Development Program that is primarily funded by land use agreements and which is regularly evaluated. Procurement processes for the delivery of Community Development Program projects could be more transparent.
• Consulting with Aboriginal people and obtaining consent — Processes for consulting with and obtaining informed consent from Traditional Owners and Native Title holders are fit for purpose. Complaints handling processes (which were the subject of a 2021 external review recommendation) are developing.
• Distributing royalties and payments — Distribution processes are well established and comply with the requirements of the ALRA and NTA. Transparent accounting of the distributions from the Land Use Trust Account to the CLC for Community Development Program projects can be improved. The existing mechanisms to reconcile the distributions made to or for the benefit of Traditional Owners against the distributions specified in the land use agreements could be enhanced.

Arrangements to promote proper use and management of resources

15. The CLC Risk Management Plan is largely aligned with the Commonwealth Risk Management Policy. Approximately one-third of management level staff have received non-mandatory training in risk management. CLC commissioned a review of its risk management processes in 2022. The CLC has an extensive policy framework. Some policies could be more detailed and require endorsement at an appropriate level, and some key governance policies do not exist.

16. The CLC is not actively implementing its Fraud and Corruption Plan. There are no regular fraud risk assessments. There is no general register of Council member interests, however Council meeting rules and a Code of Conduct contain provisions for dealing with conflicts during meetings. These provisions are weakened by a lack of consistency in how conflicts are meant to be managed and a lack of transparency in meeting minutes as to how conflicts are managed in practice. There is also a lack of transparency over how potential employee conflicts are managed.

17. The CLC 2021–2025 Corporate Plan and Annual Report complied with PGPA Rule requirements except that they do not contain accountable authority certification that the annual performance statements accurately present CLC’s performance in the reporting period. Performance measures are clearly defined, with appropriate targets. Performance measures predominantly measure activities or outputs, with little performance information provided in relation to outcomes and the achievement of purpose. There is a clear line of sight between performance measures outlined in the corporate plan and performance results in the annual report. The CLC accountable authority and Council were engaged in the production of the corporate plan.

18. The CLC has a developing internal audit function. The Audit and Risk Committee member composition and rotation is consistent with the Charter. However, Audit and Risk Committee members do not comply with Charter requirements to annually declare material personal interests. CLC’s Audit and Risk Committee could improve its reporting to the accountable authority. The Audit and Risk Committee has not documented a substantive review of the CLC’s performance reporting.

Recommendations

Summary of entity response

19. The CLC’s summary response is provided below and its full response is included at Appendix 1. An extract of the draft report was also provided to PricewaterhouseCoopers (PwC). PwC’s response can be found at Appendix 1. The improvements observed by the ANAO during the course of this audit are at Appendix 2.

The Central Land Council (CLC) welcomes the opportunity to participate in this performance audit by the Australian National Audit Office (ANAO), and the opportunity to respond to the draft performance audit report provided on 17 April 2023. The CLC notes that this response is prepared in advance of the ANAO’s finalisation of the report contents.

The Central Land Council was established by the Aboriginal Land Rights (Northern Territory) Act 1976, and is guided by the strong governance of its council of 90 Aboriginal people elected by their communities to represent them. The CLC is committed to effectively fulfilling its statutory functions and has been representing, protecting and advocating for Aboriginal peoples’ rights and interests since its establishment. The CLC is committed in principle and practice to accountability and transparency, and seeks to model this throughout its work and particularly for its Aboriginal constituents.

Overall, the CLC agrees with the ANAO’s recommendations, with some clarifications on scope or implementation which are included in the CLC’s response to the recommendations. The CLC has reported on actions already undertaken or planned in order to address the recommendations. In addition, the CLC has also actioned several suggested opportunities for improvement.

The CLC consider this a worthwhile exercise to support it in its continuous improvement in ensuring that its governance arrangements support it in the delivery of positive outcomes for Aboriginal people across our region.

Introduction

1.1 Four Northern Territory (NT) Land Councils are established under the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) to represent the interests of Aboriginal people within their respective regions and assist them with the management of Aboriginal land: the Central Land Council (CLC), the Northern Land Council (NLC), the Tiwi Land Council (TLC) and the Anindilyakwa Land Council (ALC).

Legislative framework

1.2 In addition to the ALRA, the NT Land Councils operate under two key legislative frameworks:

• the Native Title Act 1993 (NTA), which provides for the Land Councils’ responsibilities as Native Title Representative Bodies; and
• the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule), which set the Land Councils’ requirements as corporate Commonwealth entities.¹

Aboriginal Land Rights (Northern Territory) Act 1976

1.3 The ALRA was the first legislation in Australia that enabled Aboriginal and Torres Strait Islander people to claim land rights for Country where traditional ownership could be proven. The ALRA recognises Aboriginal people’s spiritual affiliation and traditional responsibility for Country as the basis for ownership of land.

1.4 The Aboriginal Land Commissioner undertakes inquiries into traditional land claims in the NT.² Upon the Aboriginal Land Commissioner’s satisfaction that the Traditional Owners³ have been correctly identified according to Aboriginal law, he or she provides a report to the Commonwealth minister responsible for the administration of the ALRA and the Administrator of the NT.⁴ The Commonwealth minister decides whether to recommend to the Governor-General of Australia to grant all or part of the land under claim.

1.5 Once land has been granted, it is held by a Land Trust⁵, and Traditional Owners manage their land with the help of their Land Council. Aboriginal land is a form of ‘inalienable’ freehold, which means it cannot be bought or sold, and Traditional Owners of the land have the right of exclusive access and the power to veto proposals to access or use land. As at 2016 Aboriginal people held freehold title to approximately 50 per cent of the NT land mass and 85 per cent of its coastline.⁶

Native Title Act 1993

1.6 Determinations of native title recognise the ongoing connection of Aboriginal and Torres Strait Islander peoples to specific areas of land and waters. Successful claims under the NTA give Aboriginal and Torres Strait Islander peoples a collection of rights, which may include exclusive possession or such rights as the right to camp, hunt, use water, hold meetings, perform ceremony and protect cultural sites.⁷ As at 2023 native title has been recognised over 358,402 square kilometres (25 per cent) of land and waters in the NT.⁸

1.7 Under the ALRA, land rights usually comprise a grant of freehold title to Aboriginal peoples. By contrast, native title arises as a result of recognition, under Australian common law, of pre-existing Indigenous rights and interests according to traditional laws and customs. It does not provide for a process to grant ownership of the land as the ALRA does.⁹

Public Governance, Performance and Accountability Act 2013

1.8 The four NT Land Councils are corporate Commonwealth entities¹⁰ and as such also must comply with the requirements of the PGPA Act and Rule. The four NT Land Councils are also registered as charities with the Australian Charities and Not-for-profits Commission (ACNC).¹¹

Governance structures under the ALRA and NTA

Northern Territory Land Councils

1.9 The CLC and NLC were established in 1973 as part of the Australian Government’s Aboriginal Land Rights Commission (Woodward Royal Commission) to inquire into the appropriate way to recognise Aboriginal land rights in the NT. The function of the Land Councils at that time was to represent the views of Aboriginal people to the Woodward Royal Commission. The CLC and NLC are responsible for the southern and northern parts of the NT, respectively.

1.10 On 26 January 1977 the Woodward Royal Commission’s recommendations were realised through the enactment of the ALRA, which established the CLC and NLC as independent statutory authorities with powers and responsibilities to assist Aboriginal people to acquire and manage their traditional land and seas. The ALRA also made provision for the establishment of other Land Councils in the NT. This led to the creation of the TLC in 1978 (representing the Aboriginal people of Bathurst and Melville Islands) and of the ALC in 1991 (representing the Aboriginal people of the Groote Archipelago).

1.11 The structure of the Land Councils consists of representatives chosen by Aboriginal people living in the region, referred to as ‘members of the Council’, and an administrative arm managed by a Chief Executive Officer (CEO), who is appointed by the Council. The accountable authority of the CLC is defined in the PGPA Rule (section 7A) as the group of persons made up of the Chair of the Land Council and the CEO of the Land Council.

1.12 The Aboriginals Benefit Account was established under the ALRA in 1976 and is the primary source of revenue for the Land Councils. Aboriginals Benefit Account distributions include funding for the administration of Land Councils, royalty payments for distribution to Traditional Owners, and grants to benefit Aboriginal people living in the NT.

Native Title Representative Bodies

1.13 Once a native title determination is made, the NTA prescribes that native title holders must establish a prescribed body corporate¹² to manage and protect their native title rights and interests. Native Title Representative Bodies are organisations appointed under the NTA and funded by the National Indigenous Australians Agency (NIAA) to assist Indigenous people with all aspects of their native title claims, and in some cases the management of native title rights once a claim has been determined. There are 14 Native Title Representative Bodies in Australia, including two in the NT. The NLC is the Native Title Representative Body for the northern region, including the Tiwi Islands and Groote Archipelago, and the CLC represents those within the NT’s southern region.

National Indigenous Australians Agency

1.14 The NIAA was established as an executive agency in May 2019 to provide advice to and support the Minister for Indigenous Australians (the Minister), including in relation to Land Councils and the exercise of his or her powers under the ALRA and the NTA.¹³ These functions were previously undertaken by the Department of the Prime Minister and Cabinet. The NIAA advised the ANAO that:

While [NIAA] is not involved in the daily operations of land councils, it does provide support where required, performance monitoring and some administrative oversight. A range of branches within the [NIAA] provide information and support on various issues, including land and native title programs, Indigenous Portfolio Bodies Section, environment and rangers programs, specific policy and program areas for grants activities, and finance teams.

1.15 Land Councils engage with the NIAA in relation to the administration of funds for operational and capital expenses (from the Aboriginals Benefit Account), land management programs and annual reporting obligations.

Functions of the Land Councils

1.16 The Land Councils’ key functions, under subsection 23(1) of the ALRA, are to:

• negotiate and enter into Aboriginal land use and access agreements with third parties on behalf of Traditional Owners and of other Aboriginal persons interested in the land;
• assist in carrying out commercial activities;
• assist with traditional land claims and the protection of sacred sites;
• consult with Aboriginal people in the Land Council area about the management of land, and protect their interests; and
• supervise, and provide administrative or other assistance for, Land Trusts in the area.

1.17 Section 35 prescribes how Land Councils must distribute the money received from Aboriginal land use and access.

1.18 The key functions of Native Title Representative Bodies are set out in section 203B of the NTA. They are: facilitation and assistance; certification; dispute resolution; notification; agreement making; and internal review. The powers and duties of Native Title Representative Bodies in respect of money received under the NTA arise from the general law and the terms of the relevant agreement.

1.19 The ALRA prescribes that, in carrying out its functions, a Land Council must not take any action unless it is satisfied that Traditional Owners understand the nature and purpose of the action and consent to it; and any Aboriginal group that may be affected by the proposed action has been consulted. The NTA prescribes that the Native Title Representative Body must consult with native title holders and for some of the functions, be satisfied that they consent to the course of action being taken on their behalf. Given that the vast majority of claims to land under the ALRA are settled as at March 2023¹⁴, facilitating the benefits that can be derived from land rights has been identified by the larger NT Land Councils as an increasing focus and priority.

1.20 A core objective of both the ALRA and the NTA is to establish and support land rights of Traditional Owners (under the ALRA) and native title holders (under the NTA). Land Councils are required to have the capability to confirm the identity and traditional connection of specific individuals to particular areas of land. To this end, Land Councils may collect anthropological data and engage specialist expertise.

1.21 Appendix 3 provides more detail on the Land Councils’ powers, functions and duties under the ALRA, the NTA and the PGPA Act.

Land use and access arrangements

1.22 The main types of arrangements for land use and access under the ALRA and NTA, and how the monies received from these arrangements are distributed, are shown in Table 1.1.

Table 1.1: Land use and access arrangements

Note a: Payment arrangements are made as per instructions from Traditional Owners and native title holders.

Note b: In this table Township leases are voluntary agreements between Traditional Owners and the Australian Government, established by the Executive Director of Township Leasing under ALRA section 19A. The Executive Director of Township Leasing manages the land in the township on behalf of the Traditional Owners and the community for up to 99 years, including sub-leases to business and governments and the protection of sacred sites.

Source: ANAO analysis.

About the Central Land Council

1.23 The CLC’s jurisdiction covers the south of the NT, from Kalkaringi and Tennant Creek, to the South Australian border. The CLC represents around 24,000 Aboriginal people across 777,000 square kilometres.

Figure 1.1: Map of Central Land Council jurisdiction

Source: Central Land Council.

1.24 The full Council has 90 members and elects an Executive Committee. The Executive Committee is comprised of the Council Chair, the Deputy Chair and one Council member from each of the CLC’s nine regions.

1.25 As at 30 June 2022 the CLC had 266 employees (246.5 paid full time equivalent over 2021–22), of which 98 were rangers.¹⁵ It has eight offices across the NT, with its head office located in Alice Springs.

1.26 In 2021–22 the CLC received $50.2 million, comprising a $34.4 million appropriation from the Aboriginals Benefit Account for its operations and $15.9 million from specific purpose contracts (primarily from government and including $0.9 million from the Aboriginals Benefit Account). The CLC also received $14.7 million under the NT Indigenous Economic Stimulus Package in 2021–22 and $22 million in 2020–21.¹⁶ In 2021–22 royalties, rents, lease monies and native title compensation of $82.8 million were paid into the CLC’s Land Use Trust Account for distribution to land owners and community members. The CLC holds property and other non-financial assets valued at $37.5 million.

Rationale for undertaking the audit

1.27 This performance audit is part of a series of audits of the governance of the NT Land Councils. It was conducted to provide independent assurance to Parliament that the Land Councils’ governance arrangements are effective in meeting legislative obligations under the ALRA, the NTA and the PGPA Act.

1.28 Land Councils play an important role in securing rights and realising benefits for Aboriginal constituents. Many external stakeholders, including government entities, non-government organisations, and Indigenous and non-Indigenous businesses, rely on the efficient and effective operation of the Land Councils.

Audit approach

Audit objective, criteria and scope

1.29 The objective of the audit was to assess the effectiveness of the governance of the Central Land Council under the Aboriginal Land Rights (Northern Territory) Act 1976, the Native Title Act 1993 and the Public Governance, Performance and Accountability Act 2013.

1.30 To form a conclusion against this objective, the following high-level criteria were applied:

• Has the CLC appropriately exercised its decision-making authority under the Aboriginal Land Rights (Northern Territory) Act 1976, the Native Title Act 1993 and the Public Governance, Performance and Accountability Act 2013?
• Is the CLC effectively governing its legislative functions under the Aboriginal Land Rights (Northern Territory) Act 1976 and Native Title Act 1993?
• Has the CLC established appropriate arrangements to promote the proper use and management of resources?

Audit methodology

1.31 The audit involved:

• reviewing legislation, regulations, policies and best practice standards;
• reviewing CLC documentation, including charters, meeting papers and minutes, policies and procedures, annual reports, corporate plans and correspondence;
• observing meetings of the Council, Audit Committee, Traditional Owners and Aboriginal corporations;
• visits to the NT including Alice Springs, Hermannsburg, Kings Canyon (Watarrka) and Tennant Creek;
• meetings with Council members and CLC staff;
• meetings with constituents of the CLC;
• meetings with officers from relevant business areas within:
  • Australian Government entities (including the NIAA, Office of Township Leasing and Office of the Registrar of Indigenous Corporations)
  • NT Government
  • NT local government;
• meetings with Aboriginal corporations, a business, peak bodies and non-government organisations; and
• 12 submissions from businesses, Aboriginal corporations, members of the public, and a peak body.

1.32 The audit was conducted in accordance with ANAO Auditing Standards at a cost to the ANAO of approximately $547,300.

1.33 The team members for this audit were Tony Varnes, Dr Isabelle Favre, Eliza Glascott, Weinnie Zhou, Grace Sixsmith, Kai Swoboda, Sean Brindle, Sam Hayward, Graeme Corbett, Katiloka Ata, Andrew Grice, Daniel Whyte and Christine Chalmers.

2.1 Authorisations and delegations are a fundamental part of good governance. They play an important role in ensuring that the entity is acting in accordance with the legal framework that applies to it. An entity needs to put in place arrangements to devolve decision-making power from the ultimate repository of that power to the relevant officers of the entity, as the ultimate repository of that power cannot do everything.¹⁷

2.2 Appendix 4 shows how Land Council decision-makers are defined under the ALRA, NTA and PGPA Act. Under the ALRA, the members of the Council, including an elected Chair and Deputy Chair, are the decision-makers. Under the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule), the accountable authority of the Land Council is defined as the Chair of the Council and the Chief Executive Officer (CEO). The former is to be elected by the Council and the latter is to be appointed by the Council under section 27 of the ALRA, which states that the Council may employ staff.

2.3 Whether the Council, Native Title Representative Body or accountable authority has decision-making authority depends upon the decision that is being made and whether that decision relates to powers and functions under the ALRA, NTA or PGPA Act, respectively. Appendix 3 outlines the Councils’, Native Title Representative Bodies’ and accountable authorities’ respective powers and functions under the ALRA, NTA and PGPA Act. In summary: the Land Council is the primary decision-maker in relation to the land; Native Title Representative Bodies have the power ‘to do all things necessary or convenient to be done for or in connection with the performance of its functions’; and the accountable authority is the primary decision-maker in relation to performance and proper use of resources under finance law.

2.4 Under the ALRA and PGPA Act, the Land Council and accountable authority’s functions are distinct except for the preparation of budget estimates (ALRA section 34 and PGPA Act section 36) and the preparation of the annual report (ALRA section 37 and PGPA Act section 46). Although functions are clearly distinct with these two exceptions, in practice powers and responsibilities may overlap.

Has the Land Council appropriately delegated its functions and powers under the ALRA?

2.5 The Australian Government Solicitor has noted that when enabling legislation establishes a board or Council as having ultimate control over the operations of the entity, most commonly the enabling legislation prescribes the CEO or director as the officer responsible for the day-to-day management of the entity.¹⁸ This may result in the CEO having ‘implied authority’, although the Australian Government Solicitor advises that even so it is generally better that decision-making power be expressly delegated.¹⁹ The ALRA is silent on the role of the CEO (in both their capacity as a CEO and as one of the accountability authorities) or other officials, and an instrument of delegation for functions and powers under the ALRA is therefore required.

2.6 If there is a power to delegate, it will usually be found in the enabling legislation. Appendix 5 shows the ALRA provisions in relation to delegation of powers and functions from the Council to: the Chair of the Council; committees of the Council; and Land Council staff, including the CEO. These delegations must be made in writing under the Land Council’s common seal. The ANAO examined whether the decision-making authority as defined in the ALRA is properly exercised by the CLC through the Land Council’s delegation of powers and functions.

2.7 The CLC made its first instrument of delegation in 1978 and this was amended 10 times. On 13 September 2022 the Council ratified under common seal the most recent instrument to delegate its powers under sections 27 and 28 of the ALRA and subsection 5(4) of the Aboriginal Land Act 1978 (NT).

2.8 Powers and functions were delegated to the Executive Committee of the Council or the CEO of the CLC.

• Non-delegated ALRA powers (that is, those retained by the Council) are clearly set out in the instrument of delegation and include the power to request the Minister for Indigenous Australians (the Minister) vary the method of choice for Council members; the power to elect the Chair and Deputy Chair of the Council; the power to make Council meeting rules; the power to co-opt members; and powers which cannot be delegated under subsection 28(2) of the ALRA.
• The delegation instrument delegates all other powers under the ALRA (except those expressly delegated to the CEO) to the Executive Committee. The devolution of power to the Executive Committee is broad.
• The delegation instrument delegates specified powers under the NTA to the Executive Committee. These relate to the certification of native title determination applications, to the certification and ability to enter into Indigenous land use agreements, and to internal review functions.
• The delegation instrument delegates to the CEO powers and functions relating to either the ALRA or NTA. For example, it delegates the ‘supervision and control of organizational procedures and management’; and the powers to apply for grants, execute Community Development agreements, execute funding agreements related to the Indigenous Economic Stimulus Package and issue permits.

2.9 Although there is a delegation instrument, it could be improved in several ways.

• It does not always clearly identify which specific sections of the ALRA are being delegated to the CEO and this can create ambiguity (for example, the delegation of the authority to execute on behalf of the Council any applications for grants and acceptance of grants for funds lacks specificity).
• Administrative functions such as ‘all powers relating to the supervision and control of organisational procedures and management’ are not something that would normally be referred to in a delegation instrument, but rather in Accountable Authority Instructions.
• The delegation instrument allows for the CEO to sub-delegate powers by written authorisation to the General Manager of the CLC during periods of absence.²⁰ Typically it is not possible for a delegate to ‘sub-delegate’, unless there is a specific legislative power to sub-delegate.

Has the accountable authority appropriately delegated its functions and powers under the PGPA Act?

2.11 The accountable authority (that is, the Chair and CEO) of the CLC established procurement and expenditure Accountable Authority Instructions (AAIs) under section 20A of the PGPA Act in July 2022. The AAIs state that the CEO — as ‘the officer appointed to administer the CLC’ and ‘on behalf of accountable authority’ — authorises various officials to perform specific financial functions within specified approval limits.

2.12 The heading of the document refers to ‘Accountable Authority Instructions’, however the body of the document refers to authorisations. The document is not in accordance with the Department of Finance’s model AAIs for corporate Commonwealth entities in that they are worded as instruments of authorisation and do not provide officials with instructions that the accountable authority expects them to follow.²¹

2.13 The AAIs authorise certain officials to make ‘commitments to spend money within the authorised limits’. The instrument also authorises: specific officials to dispose of specific assets that do not exceed a specified amount; specific officials to sign cheques or authorise electronic funds transfers on behalf of the CLC for specific accounts; and specific officials who may receive and deposit money, process purchase orders, approve payroll, or authorise domestic travel bookings. Each authorisation includes a statement that no authorisation is given that is inconsistent with the ALRA, NTA or PGPA Act.

2.14 As with the ALRA / NTA delegation instrument (see paragraph 2.9), the AAIs do not refer to the specific provisions of the PGPA Act when describing the authorisation. Some of the authorisations are very broad. Some of the authorisations appear to relate to ALRA functions, although this is difficult to determine given the lack of specificity. For example, the Executive Manager Professional Services Division is given the authority ‘to negotiate mining agreements’. The accountable authority has no authority to authorise ALRA functions and powers.

2.16 The Department of Finance advised the ANAO in February 2023 that how the accountable authority is required to operate is a matter for the accountable authority to determine between themselves (noting that they are jointly responsible for fulfilling the duties and legal obligations under the PGPA Act) and that the PGPA Act provides flexibility to accountable authorities to establish systems of internal control most appropriate to their operating environment (noting that this must be consistent with the proper use and management of public resources).

2.17 It is usual practice for an accountable authority made up of multiple individuals, such as boards, to have an operational charter setting out how the accountable authority operates. The CLC does not have such a document.

2.20 The Finance Minister delegates some of his or her functions and powers to the accountable authority of an entity under section 107 of the PGPA Act. Section 110 of the PGPA Act indicates when an accountable authority may delegate to an official of a non-corporate Commonwealth entity. This provision does not apply to corporate Commonwealth entities, which are legally separate from the Commonwealth. In the case of corporate Commonwealth entities, the delegation requirements should be specified in the enabling legislation — in this case the ALRA. However, the ALRA is silent regarding delegations by the Land Council accountable authority as defined by the PGPA Act. It appears that the accountable authority of a Land Council is not able to delegate his or her functions and powers under existing legislation.

2.21 Auditor-General Report No. 25 of 2022–23 Governance of the Tiwi Land Council made a recommendation to the National Indigenous Australians Agency to, in consultation with relevant stakeholders, clarify the conditions and requirements under which a Land Council accountable authority may delegate its functions and powers. The National Indigenous Australians Agency agreed to the recommendation.

3.1 The Northern Territory (NT) Land Councils’ key purpose is to assist in claiming Aboriginal land and once a claim has been granted, to manage Aboriginal land on behalf of Traditional Owners and other Aboriginal people living in the area of the Land Council. To achieve this purpose, the ALRA prescribes that specific governance arrangements must be in place for Land Councils to manage their operations. The arrangements relate to: appointments to key governance positions; the establishment and conduct of Council and committee meetings; and the establishment of registers of Council and Land Trust members, and of Traditional Owners.²²

3.2 Land Councils must also establish governance arrangements to support the delivery of their key legislative functions, which pertain to three main types of activities.

• Negotiation and assistance — Land Councils must assist Traditional Owners and Aboriginal people with land claims²³, negotiate on behalf of Traditional Owners and other Aboriginal people with third parties wanting to use or access Aboriginal land; and assist Aboriginal people to carry out commercial activities and protect sacred sites.²⁴
• Consultation and consent — Land Councils must consult with Traditional Owners and Aboriginal people in the area of the Land Council about the management of land and endeavour to protect their interests.²⁵
• Distribution of royalties and payments — Land Councils must distribute royalties and other payments, such as rents, to, or on behalf of, Traditional Owners.²⁶

3.3 Land Councils and Land Trusts are exempt from compliance with the Freedom of Information Act 1982.²⁷ There are also no appeal or review mechanisms in the ALRA. This reinforces the importance of effective governance arrangements to support the management of Land Councils’ key activities.

Has the Land Council established and implemented appropriate governance arrangements to manage its operations?

Appointment of key governance positions

3.4 The ALRA prescribes how Council, including the Chair and Deputy Chair of the Council, must be appointed (see Appendix 6). The ALRA specifies that Council members shall be chosen by Aboriginal people living in the area of the Land Council in accordance with a ‘method of choice’, which is to be approved by the Minister.

Development of the Central Land Council’s method of choice

3.5 The CLC method of choice as at March 2023 was approved by the Minister for Indigenous Australians (the Minister) on 31 January 2019, and replaced a previous method of choice approved in 2016. The 2019 method of choice reflected changes in population numbers in various small communities and outstations, in line with a Council resolution from November 2018. The 2019 method establishes the composition of the Council and the selection process.

3.6 Ninety members are nominated, comprised of seven to 15 members from the nine regions. Within each region, members are: nominated from discrete communities or locations which are allocated one or two members each (76 positions); or nominated by a formal resolution of a ‘recognised entity’ (14 positions). Across the nine regions, there are 64 specified communities and 11 recognised entities.

3.7 A ‘recognised entity’ is an incorporated Aboriginal association or Aboriginal corporation that has been recognised by resolution of the Council.²⁸ The board of the recognised entity must have members who are Traditional Owners or Aboriginal people living in the area of the recognised entity. The CLC does not have criteria or guidelines for selecting which entities to recognise. The method of choice provided to the Minister for approval did not specify any criteria or list the names of the recognised entities.

3.8 The method of choice does not prescribe in detail how specified communities or recognised entities are to select a nominee, and the method for nomination may differ depending on the community or entity. For communities, nominations are usually made during a location-specific meeting facilitated by CLC staff. While the CLC staff usually attend and record minutes and resolutions of the meetings at which community members are nominated, the CLC does not scrutinise the mechanism adopted by recognised entities to nominate a member to the Council.

3.9 Under the method of choice, a valid nomination can be received either by:

• for community nominations — signed confirmation from a CLC staff member that a community meeting was held to receive a nomination and signed acceptance of that nomination by the nominee; or
• for recognised entity nominations — a signed nomination from an office holder, contact person or public officer of the recognised entity.

3.10 The method of choice that is approved by the Minister is partly accessible to the community. The CLC website includes information about which communities have nominated or elected members.²⁹ The map does not show the names or locations of the ‘recognised entities’. The method for nominating or electing members from communities or recognised entities is not described on the website.

Council member appointments

3.12 The CLC ran a nomination process in February 2022. The CLC method of choice is silent on how the nomination process should be promoted. For the February 2022 nomination process, the process was promoted through: posters; an advertisement in Land Rights News³⁰; and television and radio announcements in four local Aboriginal languages and English.³¹

3.13 Council member appointments were made in February 2022 largely in accordance with the approved method of choice.

• Nominations were not all received by the due date and 14 vacancies remained on the Council as of April 2022. Seven of these positions were filled by temporary appointments by recognised entities at the April 2022 Council meeting, with seven community nominations remaining pending at that time. The CLC advised the ANAO that the decision to appoint a temporary member is at the discretion of the community or recognised entity.
• ANAO sampled 17 Council positions (comprising seven recognised entities and 10 communities) for a closer examination of nomination processes.³²
  • Of the 17 sampled positions, 13 were filled in April 2022.³³
  • The ANAO was able to locate the required nomination documentation for all the sampled filled positions.
  • Of the four sampled unfilled positions as at April 2022, three (all recognised entity positions) were temporarily filled. A subsequent permanent appointment was made, in one instance by the recognised entity following a formal resolution of the recognised entity’s governing body, and in another instance by the CLC holding a community meeting on the request of the recognised entity. One of the unfilled positions as at April 2022 (a community position) remained vacant as at March 2023.³⁴

3.14 The full list of confirmed Council members is published on the CLC website.³⁵ Members are listed by region, and a short biography is included for each. As at March 2023, 20 of the 86 members were women (23 per cent).

Election of the Chair and Deputy Chair

3.15 Other than stating that the Chair holds office on a full-time basis, the CLC method of choice is silent about how the Chair and Deputy Chair are to be selected. The Chair and Deputy Chair were elected in April 2022 by Council members through secret ballot³⁶, in a process managed by the Northern Territory Electoral Commission.

Remuneration of Council Chair and members

3.16 The remuneration of Council members is determined by the Remuneration Tribunal.³⁷ As at March 2023 the prescribed remuneration of the Chair as a full-time office holder was $227,800. The prescribed daily fees for Council members when engaged on the general functions or duties of the Land Council were $344, and $520 if Council members were engaged in functions or duties as a member of the Executive Committee.³⁸

Guidance and training for Council members

3.17 The CLC method of choice and Council meeting rules are silent on member induction and training. The Executive Committee meeting rules state that:

Staff will ensure that appropriate induction training and materials are provided for members at the beginning of each term, including training on the responsibilities of Executive members and the CLC Code of Conduct. Staff will ensure that ongoing training is provided to the Executive to ensure members can fulfil their responsibilities.

3.18 The CLC has developed guidance for new Council and Executive Committee members. A handbook titled Governance at the Central Land Council - your guide to being a council member (2022 handbook) was first produced in 2016 and re-published in 2022. The 2022 handbook outlines the roles and responsibilities of Council members, including the Chair and Deputy Chair and Executive Committee. It also outlines the requirements of the ALRA, the NTA and the Public Governance, Performance and Accountability Act 2013; the role of the CEO and senior managers; the CLC Code of Conduct; and the rules and procedures that apply to Council meetings.

3.19 Under subsection 7(11) of the Remuneration Tribunal Act 1973, a full-time public office holder is prohibited from receiving remuneration for holding, or performing the duties of, another public office. The CLC advised that, as at March 2023, the CLC Chair did not hold any other paid public positions, and held two unpaid board positions.³⁹ The ANAO did not examine whether the Chair’s performance of duties for other entities impact on his capacity to complete his duties for the Council as a full-time remunerated public office holder.

3.20 The CLC provides governance training for Council members, including the Executive Committee. A training provider was contracted in April 2022 to provide mentoring and support for the Chair and Deputy Chair. Newly appointed Council members were provided with an induction which includes information about governance.

Figure 3.1: Council members at the Council induction, April 2022

Source: CLC Council News April 2022.

Establishing and implementing meeting and committee rules

Establishment of committees

3.21 The CLC established the Executive Committee in accordance with the ALRA (see Appendix 5). The Executive Committee is comprised of 11 members (one representative from each of the nine regions, plus the Chair and Deputy Chair of the Council). Executive Committee members are nominated by members from their region at the Council meeting following the election of the Chair and Deputy Chair. The CLC advised the ANAO that this can be done using a method selected by the region and can be either a secret ballot or a show of hands. Each region nominates one Executive Committee member and an alternate. Nominations are recorded in the Council meeting minutes and passed by resolution of the full Council.

Establishment and communication of Council and committee meeting rules

3.22 The CLC has largely complied with the requirements of the ALRA in relation to the establishment and communication of Council and committee meeting rules (see Appendix 6).

• The CLC established meeting rules for the Council, which were approved by the Minister on 26 June 2021.
• The rules for the Executive Committee were resolved by the Council in November 2015. The Executive Committee meeting rules address the conduct of meetings, the required quorum, management of conflicts, attendance and the management of vacancies, among other matters.
• It is not clear if the CLC has complied with the ALRA requirement to make Council meeting rules and minutes, and Executive Committee meeting minutes, available to Traditional Owners and any Aboriginal people living in the area of the Land Council. The CLC advised the ANAO that meeting rules and minutes are available to constituents for inspection upon request and the 2022 handbook states that ‘All Aboriginal people in the CLC area are allowed to see the minutes at the CLC office and at no cost’. However, prior to April 2023 the CLC had not promoted the fact that meeting rules and minutes are available, which reduces the transparency of the process. As the CLC has not maintained a register of requests, it is not possible for the ANAO to confirm whether any requests for access have been made and if meetings rules and minutes were provided as required under the ALRA.

3.25 The Executive Committee meeting rules do not address the focus and purpose of the Executive Committee (which are more clearly set out in the 2022 handbook), and do not specify the powers and functions delegated to the Executive Committee by the Council. As described in paragraph 2.8, the Council has delegated broad powers to the Executive Committee, including the confirmation of consultation and negotiation outcomes and entering into land use agreements on behalf of the Council. Neither the Council rules nor the Executive Committee meeting rules require that the Executive Committee report back to the full Council, nor do they establish a process whereby the member representing a region must report back to constituents.

Implementation of meeting rules

3.26 The CLC held three Council meetings and seven Executive Committee meetings in 2021–22.⁴⁰ The ANAO analysed the minutes of the Council and Executive Committee meetings in 2021–22 to determine if the meeting rules and ALRA had been complied with. Overall, the meeting rules were implemented appropriately in relation to: meeting frequency; quorum; that decisions are formally resolved; and that minutes are kept and subsequently confirmed.

3.27 The Council meeting rules are silent on the preparation of meeting papers, however do prescribe that members must be ‘given reasonable opportunity to speak’ about matters and that the Council will ‘attempt to address issues or complaints’ raised at the meeting. The ANAO observed a CLC Council meeting on 1 to 3 November 2022 in which discussion largely centred on policy and legislative issues concerning CLC constituents and an explanation by CLC staff of work being undertaken in their business areas. The ANAO observed that CLC staff employed several techniques to ensure members were fully informed of agenda items and could participate in discussion, including allocation of a full day for members to read and discuss the full pack of meeting papers in small groups on the first day, prior to formal discussion on subsequent days.

3.28 As noted in paragraph 2.8, the full Council delegates a wide range of substantive functions to the Executive Committee. The 2022 handbook states that the role of the Council is to check if CLC staff have properly consulted with the Traditional Owners; the right people have made the decisions; and the agreement is fair and reasonable. It further states that the full Council meets three times yearly to develop and review policy; set directions for the organisation; check the organisation is on track and being well managed; and advocate for the rights and interests of Aboriginal people and the CLC. The 2022 handbook does not clarify, for the benefit of Council members, that the full Council remains accountable for all the decisions made on its behalf by the Executive Committee.

3.29 The ANAO observed that in practice, resolutions in relation to land use under the ALRA and NTA are decided by the Executive Council, which provides brief reports to the Council (as part of the CEO’s or Chair’s reports). The minutes of Council meetings do not contain a report from the Executive Committee as a standing item, nor does the Council consider or review the decisions made on its behalf by the Executive Committee. Instead, Council meetings deal mainly with high level policy matters, including for example: confirming Council positions regarding water rights; potential amendments to the cultural heritage legislation; alcohol restrictions; the referendum for an amendment to the Constitution; and housing, roads and health issues impacting constituents such as dialysis access. Given the substantive nature of decisions being made by the Executive Committee, the brevity of its reporting to the full Council is not consistent with transparency or the accountability for decisions that are retained by the full Council.

Compiling and maintaining registers

3.33 The CLC complies with the ALRA (see Appendix 6) in maintaining a register of Council members; and maintaining a record of Land Trusts, the membership of each trust and the land to which each Trust relates.

3.34 The CLC method of choice allows for Council members to be either Aboriginal people living in the area of the Land Council, or whose names are set out in the register of traditional Aboriginal owners of Aboriginal Land in the area of the CLC. The CLC does not maintain a register of Traditional Owners, which is consistent with the non-mandatory nature of ALRA (section 24). To support the method of choice, the CLC instead holds a repository of genealogical and related anthropological information which it can access in order to confirm traditional ownership and connection to specific land within the CLC region.

Has the Land Council established and implemented appropriate governance arrangements to exercise its key legislative functions?

Negotiating and assisting

Negotiating Aboriginal land use and access

3.35 The ANAO examined the CLC processes in relation to section 19 (s19) agreements, Part IV agreements and permits (see Table 1.1). S19 agreements cover primarily non-mining land use arrangements, Part IV agreements primarily relate to mining and exploration and permits enable access to Aboriginal land or roads.

Section 19 agreements

3.36 There were 480 active s19 agreements as at October 2022. The CLC has a documented process for establishing and monitoring s19 agreements. It maintains a database of s19 agreements, their duration and term, and the permitted land use under the agreement. The CLC monitors the renewal and completion dates of s19 agreements via the database.

Part IV agreements

3.37 Part IV agreements relate to exploring for the purpose of mining and mining Aboriginal land. Agreements are established with mining companies. There are approximately 100 active Part IV agreements in the CLC region. The CLC has a documented process for establishing Part IV agreements.

3.38 There is some monitoring of Part IV agreements by the CLC. However, the quality and completeness of information to facilitate monitoring that is available to the CLC varies (including on-site observations, searches of the public record, published financial reports, documents provided by the mining company and information provided by Traditional Owners who live and work near the sites). An agreement clause requiring mining companies to provide detailed activity reports for the previous twelve-month period is a standard provision within Part IV agreements. An internal audit in November 2022 noted that the CLC had no internal control mechanisms in place to ensure that progress reports due from mining companies were requested or received. There is no systematic process for the CLC to comprehensively monitor mining activity or compliance with all the terms and conditions across all agreements. The CLC advised the ANAO that staff levels limited the extent to which Part IV agreements could be monitored, and that while some agreements provided for the CLC to audit mining activity, this was not typically done.

3.42 Between July 2018 and June 2022 the CLC received 217 applications for Part IV agreements (Table 3.1). In that timeframe the CLC resolved 63 applications. A 2022 internal audit report identified that as at 30 June 2022 there were 206 active applications pending processing or resolution.

Table 3.1: Part IV applications, 2018–19 to 2021–22

Source: ANAO analysis of CLC Annual Report 2021–22 and internal audit report: Mineral and Energy Unit, November 2022.

3.43 CLC staff advised the ANAO that limited staff resources with the required expertise impacts on the CLC’s ability to meet the demand arising from applications for Part IV agreements, and that delays in processing applications can be caused by the applicant, project complexity and remoteness, among other factors.

Permits

3.44 Under ALRA section 70, unless a person holds a lease or a license, they cannot enter or remain on Aboriginal land, or use a road on Aboriginal land, without a permit.⁴¹

3.45 Several categories of permit exist: entry permits; transit permits; mining permits; several types of media permits; and special purpose permits for research, tourism and community and ecological projects.⁴² There were 5395 permits issued in 2021–22 (Table 3.2). The CLC does not generally charge for permits, except permits requiring rehabilitation to the land or extensive negotiations.

Table 3.2: Number of permit types, 2021–22

Note a: Total of individuals covered excludes transit permits.

Source: ANAO adaptation of table in CLC Annual Report 2021–22.

3.46 The CLC has an online permit application system. The CLC does not report on its timeliness in processing permit applications or on backlog and advised the ANAO that staff prioritise urgent applications and those with shorter lead times. The CLC stated in its 2021–22 Annual Report that there had been an ‘increase in work-related permit applications’, and a subsequent ‘increased workload for the permit officer’. In response to this increased demand, in 2021–22 the CLC issued nine organisation-wide permits covering multiple individuals.

Native title agreements

3.47 As part of its functions prescribed under the NTA, the CLC represents native title claimants to make applications to the Federal Court for determinations of native title. A search of the National Native Title Register as at May 2023 for the Southern Northern Territory (the CLC region) returned 34 determinations for native title.

3.48 The NTA does not require Native Title Representative Bodies (NTRBs) such as the CLC to administer the financial and compliance activities of Prescribed Bodies Corporate (PBC) formed by native title holders after the Federal Court makes a native title determination. However, the CLC has established a PBC support unit to assist new and emerging PBCs with complex legislation and other challenges. The CLC advised the ANAO that its objective is to enhance the capability of PBCs to become self-sufficient.

3.49 When a native title interest has been registered with the National Native Title Tribunal, the CLC is responsible for assisting PBCs or native title holders in response to ‘future acts’ and for supporting negotiation of agreements made under the NTA.⁴³ The CLC has documented procedures for when an exploration or mining company expresses interest in mining an area that is subject to a native title claim or determination.

3.50 Under the NTA (section 203DF) the Minister may appoint a person to investigate an NTRB’s performance of its functions and exercise of its powers. In 2020 the National Indigenous Australians Agency (NIAA) commissioned the Nous Group to undertake a review of the performance of CLC’s functions as an NTRB between 1 July 2016 and 30 June 2019. Nous Group findings (March 2021) included the following.

• Overall, the CLC had been able to achieve native title outcomes for its clients.
• The CLC progressed small, localised claims, resulting in claims that were generally smaller than those progressed in other NTRB areas. This approach had proven effective in achieving native title outcomes.
• The CLC had a clear and documented policy in place for assessing and prioritising native title claims.
• The CLC had a strong focus on dealing respectfully, transparently and in a culturally appropriate manner with clients through its regional ‘on the ground’ model.
• The CLC’s native title responsibilities were managed effectively. Its policies and procedures provided the Council, Executive Committee and staff with structure and clarity over their roles, responsibilities and decision-making authority. The management of native title finances was undertaken within a sound overall financial management approach.
• The CLC had not received any formal complaints from its constituents in relation to native title. Informal feedback was tracked and used to improve performance on an office-by-office basis. Nous suggested that the CLC create a consistent approach to tracking feedback and implement an easy to access online complaints mechanism.
• The CLC’s strategic planning for post-determination was relatively under-developed and the organisation did not have a formal post-determination strategy for its native title functions.⁴⁴

3.51 Nous Group made six recommendations to the CLC in relation to the regular monitoring of client satisfaction; making its internal review process available online; more clearly communicating its prioritisation process and ‘key decision-making factors’ for claims assessment; creating an online complaints and feedback channel and recording informal complaints and feedback; considering the appropriate role of the PBC support unit; and ensuring that strategic planning consider the role of the CLC in a post-determination native title environment. Although the CLC did not specifically indicate whether it agreed or disagreed with each of the six recommendations, its responses outlined planned or ongoing activities to address the recommendations.

Assisting with commercial activities

3.52 Under the ALRA, the Land Councils are to assist Aboriginal people in the area of the Land Council to carry out commercial activities in a manner that will not cause the Land Council to incur financial liability or enable it to receive financial benefit; and may provide administrative or other assistance to an Aboriginal corporation that received an amount of money from the Council.

3.53 In 1985 and 2009 respectively, two companies were formed to assist Aboriginal people in the CLC region with commercial activities.

• Centrecorp Aboriginal Investment Corporation Pty Ltd (Centrecorp) — As part of a 1985 negotiated lease of land to accommodate a gas pipeline, the CLC had rights to purchase shares in N.T. Gas Pty Ltd. Because the ALRA (subsection 23(1)) prevents a Land Council from deriving a financial benefit from its activities, Centrecorp was established to hold the N.T. Gas Pty Ltd shares.⁴⁵ Centrecorp has interests in a range of commercial activities within and outside of the CLC region, facilitates the provision of services to CLC constituents via the Centrecorp Foundation and supports various investments and joint ventures with Aboriginal people.
• Centrefarm⁴⁶ — Centrefarm was ‘established as a developer of viable commercial economies on Aboriginal lands for the benefit of Traditional Owners and communities’.⁴⁷ The Aboriginal Land Economic Development Agency (ALEDA) was incorporated in 2018. ALEDA is described by Centrefarm as a ‘core feature’ of the Joint Land Council Economic Development Strategy, which was developed by Centrefarm in association with the Northern Land Council and the CLC.⁴⁸ The CLC was provided $2.05 million from the Aboriginals Benefit Account during 2019–20 and 2021–22 for the specific purpose of the distribution of the funds to Centrefarm for the expansion of ALEDA.⁴⁹

3.54 In response to CLC constituents identifying a need for support for their participation in economic activities, the CLC established two internal units to assist with commercial activities.

• Economic Participation Unit (EPU) — The EPU was established in 2019. The EPU’s objective is to support CLC constituents to access training, employment and enterprise opportunities. The EPU also works with the applicants of development proposals on Aboriginal land to find opportunities for Aboriginal employment and training and business contracting.
• Aboriginal Associations Management Centre (AAMC) — The AAMC is a discrete unit within CLC which provides administrative services on a cost-recovery basis to entities that receive regular distributions from Part IV agreements.⁵⁰ The AAMC also facilitates distributions from s19 agreements, which provide income streams to Indigenous groups, such as from grazing licenses and gravel pits. The AAMC-administered corporations include 34 Aboriginal corporations (regulated by the Office of the Registrar of Indigenous Corporations), two Australian Securities and Investments Commission regulated corporations and two charitable trusts. The AAMC also has responsibility for managing the compliance activities of 75 Aboriginal corporations and six native title associations whose compliance obligations had previously been supported by other CLC units.⁵¹ The AAMC’s activities are split into two main functions — to manage the books and records of the Aboriginal corporations who are the beneficiaries of disbursements and to run meetings with Traditional Owners to assist them as members and directors of Aboriginal corporations.

3.55 In 2020–21 and 2021–22 the CLC received, on behalf of its constituents, $36.7 million in funding from the NT Indigenous Economic Stimulus Package (see paragraph 1.26).⁵² The CLC disclosed in its 2021–22 Annual Report that the focus of the EPU had been to allocate stimulus funding. The CLC developed an ‘Economic Stimulus Funding Guide’ (Stimulus Guide) that outlines the procedures and documents involved in assessing applications for stimulus funding and developing a contract and payment schedule for successful applicants. The Stimulus Guide documents the approval process and is consistent with an implementation plan submitted to the NIAA on 21 January 2021 and subsequently approved by the NIAA. The implementation plan stated that projects receiving stimulus funding had been identified through ‘existing and ongoing engagement and relationships with constituent communities and local Aboriginal businesses …’.

3.56 The ANAO sampled 21 stimulus funded projects⁵³, including four for which the CLC was the project proponent (three with a project partner) on behalf of a community project, and found that all 21 sampled projects were assessed against the criteria specified in the Stimulus Guide; and received endorsement by the General Manager, and were approved by the CEO or their delegate, as required under the implementation plan. Risk was discussed in relation to all non-exempted medium-large size projects, as required under the implementation plan.⁵⁴

3.57 The implementation plan did not set out a required date for disbursement of the stimulus funds, however it noted that the CLC expected that the funds would be ‘spent’ by ‘mid-2022’. CLC’s 2021–22 financial statements disclosed that as at 30 June 2022, $20.5 million (56 per cent) of the NT Indigenous Economic Stimulus Package funding had been contractually committed and $4 million had been released. As at September 2022 the CLC had approved 63 applications (valued at $30.9 million; 84 per cent) for funding.

Assisting with community development

3.58 Since 2005 the CLC has coordinated a Community Development Program which applies Aboriginal funds to social, cultural and economic development projects.⁵⁵ In 2009 the CLC developed a Community Development Framework, which was updated in 2021 (CD Framework). The CD Framework identifies four strategies that guide the CLC’s involvement in community development: governance support; planning and project management; partnerships and networks; and lobbying and advocacy.

3.59 In its 2021–22 Annual Report, the CLC describes the process for the delivery of Community Development Program projects. The Annual Report sets out that the CLC’s Community Development Unit collaborates with Aboriginal groups to prioritise, plan and develop projects that are to benefit the Aboriginal community or Traditional Owners. In 2022 an internal audit identified that, consistent with the CLC’s Community Development processes, Traditional Owners made decisions over projects and working groups were established to identify community interests, establish project scope and select projects. The internal audit also found that CLC staff assisted in developing proposals, reported to working group members, and sought feedback on project outcomes.

3.60 The 2021–22 Annual Report indicates that, in consultation with Aboriginal groups, partner organisations are identified that have the capacity to deliver the projects. The CLC’s CEO signs off on the project consultation process, proposal details and funding. The CLC then negotiates funding agreements with the provider of goods and services (the delivery partner) and manages the projects. There are no documented guidelines or framework for the identification and procurement of delivery partners, which the 2022 internal audit found to be an ‘informal process’ that carried governance risks. The same section of the Annual Report discloses that in 2021–22, 217 new projects valued at $21.6 million were commenced.

3.64 The Community Development Program has been monitored and evaluated by La Trobe University (commissioned by the CLC) since 2011. The 2020–21 La Trobe University review found the Community Development Program was delivering on its key objectives to maximize opportunities and generate outcomes which benefit Aboriginal people; and there was continued growth in funding allocated and number of projects funded. A March 2018 internal review had noted a lack of standardised procedures for project evaluation and monitoring, and the 2020–21 La Trobe University review noted that the CLC had received NIAA funding to develop a new monitoring and evaluation strategy and create a monitoring and evaluation coordinator position. The La Trobe University review identified gaps in outcome reporting; challenges in balancing immediate and longer-term needs; and a shortage of quality delivery partners; as some challenges to be addressed as a priority. The recommendations included that the CLC:

• develop more tailored project monitoring, evaluation and learning strategies;
• form partnerships with all levels of government to trial new ways of working to address a decline in government funding of Community Development projects; and
• use examples of successful Aboriginal corporations who have run their own Community Development Program projects as a template for Aboriginal groups unable to attract quality project partners.

Assisting with the protection of sacred sites

3.65 The ALRA prescribes that the Land Councils must take measures to assist in the protection of sacred sites on land in the area of the Land Council.

3.66 In fulfilling its statutory responsibilities under the ALRA, the CLC issues Sacred Site Clearance Certificates (CLC Certificates). CLC Certificates are requested in relation to: exploration and mining; construction projects such as buildings and roads; Telstra telecommunication construction; work by the CLC’s ranger groups that involves traditional burning of vegetation, feral animal control, and fencing; and miscellaneous activities such as military exercises, pipelines, or cabling projects. The CLC Certificates set out conditions in relation to working near sacred sites to protect the sites.

3.67 The CLC website identifies the procedure to obtain clearance for work to be carried out on Aboriginal and non-Aboriginal land. For work clearances on Aboriginal land, the CLC website states that the CLC can issue a CLC Certificate. For work on non-Aboriginal land, the CLC directs applicants to the Aboriginal Areas Protection Authority (AAPA) to obtain an Authority Certificate.⁵⁶ The CLC has documented its work procedures around the protection of sacred sites in a guide developed and updated by the CLC’s Anthropology Unit. The Anthropology Unit researches and produces reports at the request of other sections within the CLC, including Work Area Clearance Reports. The Work Area Clearance Report contains advice necessary to produce a CLC Certificate. The CLC’s Anthropology Unit maintains a sacred site database.

Consulting and obtaining consent

3.68 The ALRA determines that, in carrying out its functions, a Land Council shall have regard to the interests of, and shall consult with, the Traditional Aboriginal Owners of the land in its area and any other Aboriginal people interested in the land. The ALRA further specifies that a Land Council shall not take any action unless it is satisfied that:

• the Traditional Owners of that land understand the nature and purpose of the proposed action and, as a group, consent to it⁵⁷; and
• any Aboriginal community or group that may be affected by the proposed action has been consulted and has had adequate opportunity to express its view to the Land Council.⁵⁸

3.69 The NTA describes NTRB functions in relation to assistance to Indigenous people for: native title applications; future acts; Indigenous land use agreements or other agreements in relation to native title; rights of access; and any other matters relating to native title or to the operation of the NTA. Section 203BC describes how in performing its facilitation and assistance functions a NRTB must:

• consult with, and have regard to the interests of any registered native title bodies corporate, native title holders or persons who may hold native title who are affected by the matter; and
• if the matter involves the representative body representing such bodies corporate, native title holders or persons — be satisfied they understand and consent to any general course of action that the representative body takes on their behalf in relation to the matter.

3.70 The parts of the CLC involved in consultation include the Professional Services Division (comprising the Legal, Anthropology, Native Title and Mining and Energy units) and the Regional Services Unit. A key function of the Regional Services Unit is to manage the logistics of, and effectively facilitate, consultation and consent meetings.

3.71 The resourcing and processes established by the CLC to consult with Aboriginal people and obtain consent from Traditional Owners are fit for purpose and allow the CLC to meet the dual requirements of the ALRA and NTA.

• Officials from the Professional Services Division are assigned to each of the nine CLC regions.
• The Native Title Unit consists of 26 employees — 10 operate centrally under the Native Title Manager and 16 are deployed through other CLC business units across the CLC regions.
• NTA and ALRA requirements are addressed in staff guidelines, including in the procedures guiding the work of the Professional Services Division and the conduct of meetings. The aim is to facilitate informed decision-making by the relevant Traditional Owners or native title holders.
• Resources have been developed to improve understanding of the rights, opportunities and impacts relating to Aboriginal Land and registered native title claims and determinations. The CLC has developed booklets explaining native title, Prescribed Body Corporates and the ALRA. The CLC has developed resources in various local languages.
• The Mining Meeting Procedure establishes a process for CLC anthropologists, mining officers and lawyers to receive instructions from Traditional Owners after considering proposals by mining companies.

3.72 The ANAO observed a meeting on 26 October 2022, which was held for the purpose of making a decision regarding several proposed mineral exploration activities. The meeting was conducted in a manner that was fully aligned with CLC Mining Meeting Procedure and included the identification of relevant attendees and decision makers, discussion of information presented by the applicant and a decision made by the attendees.⁵⁹ Meeting records demonstrate that Traditional Owners were mostly adequately briefed on the benefits, risks and costs of the proposals.

• Traditional Owners were provided explanations about the environmental process and impact of the proposed exploration. Maps were distributed and explained to Traditional Owners, who had the opportunity to discuss and ask questions about the affected area.
• Traditional Owners were informed that if consent was given for exploration activity, and the exploration led to mining activity, they would be able to negotiate terms of a mining agreement but would not be able to subsequently withdraw their consent for mining activity.
• CLC staff explained concepts and at times corrected things said by the mining company.

Figure 3.2: Mining exploration consent meeting, October 2022

Source: ANAO with participant consent.

3.73 The outcome of the 26 October 2022 meeting was that consent for mining exploration on two areas of land was conditionally granted by meeting attendees. The ANAO did not observe or monitor the subsequent implementation of the decisions or related negotiations between the CLC, Traditional Owners and the applicant.

Disputes and complaints

3.74 The ALRA establishes a duty of Land Councils to attempt conciliation of disputes with respect to land in the area of the Council.⁶⁰ The ALRA does not include requirements for complaints management, however in order to ensure the Land Council is representing the interests of its constituents effectively and transparently, complaints should be handled effectively. The Commonwealth Ombudsman’s Better Practice Complaint Handling Guide identifies attributes of a strong complaints system, including: actively encouraging complaints; supporting early resolution; communicating outcomes; and feeding back systemic issues.⁶¹ Under the NTA, NTRB functions include to promote agreement and mediate disputes between NTRB constituents in relation to the making of native title applications, future acts, native title agreements and rights of access.

3.75 The CLC advised the ANAO that external complaints and issues are responded to by various teams across the organisation including the regional offices, although since February 2023 oversight of this function has been centralised. Email records demonstrate that the CLC has received, triaged and managed external and internal complaints. The CLC has partly implemented the 2021 Nous Group recommendation (see paragraph 3.51) that the ‘CLC could make providing feedback and complaints more accessible online’; and ‘should also consistently record informal complaints or feedback made to regional offices to support continuous improvement.’⁶²

• The CLC developed a Dispute Management Framework in 2015 that distinguishes between disputes about land, resources, family matters and disputes between individuals. The Dispute Management Framework outlines the CLC’s approach to external disputes including relating to land and traditional ownership.
• The CLC has a Complaints Policy dated May 2023 which outlines staff responsibilities with respect to complaints received from external parties. The Strategy and Performance Manager is responsible for ensuring a complaint register is maintained and that monitoring is undertaken.
• The CLC added a dedicated complaints form for external stakeholders to its website in November 2022. Prior to 2022 the CLC had a combined feedback and complaints form on its website. There is no evidence that the CLC has a systematic way of recording informal complaints or feedback made to regional offices to support continuous improvement.
• The management of complaints made to or about the CLC’s staff or performance is not covered by the Dispute Management Framework. The CLC’s Human Resources area manages and monitors internal complaints in a centralised process, as documented in a Grievance Handling Policy. The audit has not examined the resolution of internal complaints.

Distributing royalties and other payments

3.76 The CLC receives monies from the agreement types set out in Table 1.1 into the Land Use Trust Account (LUTA) on behalf of Aboriginal people and corporations. Figure 3.1 describes how the payments received in 2021–22 by the CLC in respect of the use or occupation of Aboriginal land in the CLC region were distributed. In 2021–22 the LUTA received $82.8 million, and distributions from the LUTA were $80.2 million. The LUTA had an opening value for the year of $35.0 million and a closing balance of $35.6 million.

Figure 3.3: Distribution of rents, royalties and other payments, 2021–22a

Note a: Payments received may vary from payments distributed given that payments received in one financial year may have been paid in the following financial year.

Note b: GMAAAC — Granite Mine Affected Area Aboriginal Corporation; HBAC — Haasts Bluff Aboriginal Corporation; KAC — Kurra Aboriginal Corporation; JAC — Janganpa Aboriginal Corporation; MCMAC — Mistake Creek Malngin Aboriginal Corporation; MAC — Mamangirri Aboriginal Corporation; NAC — Ngampelerre Aboriginal Corporation; SEARAC — South East Arrernte Region Aboriginal Corporation; TRAC — Tennant Region Aboriginal Corporation; YKAC — Yangkuntjatjarra Kutu Aboriginal Corporation; WAC — Warlpiri Aboriginal Corporation; and WOCDAC — Western Outstation City Development Aboriginal Corporation.

Note c: Some other monies, totaling approximately $1 million, received by CLC are not depicted in this figure.

Source: ANAO analysis of CLC documentation.

3.77 There is a two-stage process for the distribution of the majority of funds received by the CLC from s19, Part IV and native title agreements. The two-stage approach facilitates compliance with ALRA and NTA requirements on the timeliness of distributions.

• Stage 1: Distribution from LUTA — Transaction processing is guided by a Land Use Trust Procedure Manual. The distribution instructions are established at the time the Executive Committee ratifies or confirms the relevant land use agreement. The transfer of funds is made from the LUTA to the bank accounts of recipients based on the information provided by the CLC Legal Unit and following a resolution of the Executive Committee. The LUTA team retain this information in a spreadsheet and rely on it to raise invoices and calculate the distribution amounts to recipients. Once the funds are received by the Aboriginal corporation or other beneficiary organisation, they are administered by the AAMC (see paragraph 3.54) under a service agreement. Some distributions are made from the LUTA directly to the CLC to fund Community Development Program projects, as authorised by the Executive Committee, or directly to individuals. Where payment is to an individual, the Executive Committee resolution contains a direction to hold a distribution meeting and for the money to be distributed in accordance with instructions from senior Traditional Owners of the area.
• Stage 2: Distribution from Aboriginal corporations administered by AAMC — The second stage of the distribution process is administered by AAMC by facilitating a distribution meeting of the respective Aboriginal corporation at which a formal decision is recorded confirming specific distribution instructions to the end recipient. End recipients are typically individuals, families (via a nominated family member) or another agreed purpose such as a funeral fund scheme. AAMC records the distribution resolution and relevant bank account details and facilitates the funds transfers in line with the intermediary organisation’s instructions. To recover the cost of its administration services, the AAMC charges whichever is lower of either a fixed fee capped at $150,000 (GST exclusive) per entity per annum, or five per cent of the funds redistributed.

3.78 ALRA (subsection 35(4)) prescribes that when a Land Council receives payment in respect of Aboriginal land, that money can be paid directly to or for the benefit of the traditional Aboriginal owners of the land. As noted at paragraph 3.58, the CLC’s Community Development Unit administers and manages projects that are funded with Aboriginal funds, including funds provided directly from the LUTA. A monthly payment is made from the LUTA to the CLC to cover project costs. During 2021–22, $2.7 million was transferred from the LUTA to the CLC for Community Development Program projects.

3.79 The various CLC units which calculate, receipt and distribute funds have their own controls and processes. Each step leading up to the final distribution is reliant on the accuracy of the preceding step. The CLC does not conduct a systematic reconciliation of the final distributions against the beneficiaries’ entitlements under various agreements. The funds transferred from the LUTA to the CLC for Community Development projects are not separately disclosed in the accounts. The accounts of Aboriginal corporations administered by AAMC are audited by PricewaterhouseCoopers.

4.1 Under the PGPA Act, Commonwealth entities are accountable to the Parliament and the public for the proper use and management of public resources to deliver programs and services and achieve outcomes. Effective management of risk, fraud and probity; a robust policy framework; a corporate plan and annual report, including performance statements; and an audit committee are key mechanisms under the PGPA Act to implement this duty.⁶³

Has the Land Council established a system of risk oversight and management and a policy framework that are appropriate?

Risk oversight and management

4.2 The PGPA Act (section 16) requires accountable authorities of Commonwealth entities to establish and maintain appropriate systems and internal controls for the oversight and management of risk. The Commonwealth Risk Management Policy supports the PGPA Act.⁶⁴ As a corporate Commonwealth entity, the CLC is not required to comply with the Commonwealth Risk Management Policy, however the Policy states that corporate Commonwealth agencies ‘should align their risk management frameworks and systems with this policy as a matter of good practice’.⁶⁵

4.3 The Commonwealth Risk Management Policy specifies that entities should establish a risk management policy. The policy should define the entity’s approach to the management of risk and how this approach supports its strategic plans and objectives; establish a risk appetite and tolerance; and contain an outline of key accountabilities and responsibilities for managing risk.

4.4 The CLC has a ‘Risk Management Plan 2020–2023’ (Risk Management Plan), dated December 2020, which serves as its risk management policy. The Risk Management Plan states that it is distinct from, and not to be substituted for, the CLC Risk Management Framework. The Risk Management Framework is also cited in other CLC governance documents. There is no evidence that the ‘Risk Management Framework’ exists.

4.5 The December 2020 Risk Management Plan states that it was endorsed by the Executive Committee of the Council on 11 December 2013, and subsequently revised in 2015, 2016, 2018, 2019 and 2020. There is no evidence that the revisions were endorsed by the Executive Committee or the accountable authority. The Risk Management Plan notes that it will be reviewed annually, with the next review due in 2021. The Risk Management Plan has not been reviewed since December 2020.

4.6 The Risk Management Plan largely complies with Commonwealth Risk Management Policy requirements. The Risk Management Plan provides generic guidance on the management of risk and defines the CLC’s approach to managing risk. It establishes the method used to establish the risk appetite and provides a risk appetite statement, which is that:

CLC senior management has a conservative approach to risk events and a willingness to avoid major or extreme risk events that would place the CLC under adverse economic or political circumstances.

4.7 A key artefact appended to the Risk Management Plan is the CLC Risk Profile, which identifies and assesses risks. Key accountabilities and responsibilities for managing risk are not outlined in the Risk Management Plan, although the Risk Profile assigns risk owners for specific risks. The Risk Management Plan requires that risks are monitored on an ongoing basis, and at a minimum bi-annually, and that certain events should trigger a review of the Risk Profile, including:

• material changes to CLC (new systems, such as change of accounting system, processes, activities);
• material organisational restructure;
• material control breakdowns that are identified through either internal/external assurance reviews or significant loss events; or
• lessons learned from a material external event or scenario analysis.

4.9 The Risk Profile was not updated between 2020 and July 2022, despite significant events such as the COVID-19 pandemic, although some work was done in 2021 to support the development of the Corporate Plan (which mentions the pandemic as a risk for which the level of assurance was inadequate). A Corporate Risk Profile was developed in July 2022 and was prepared by the CLC and the internal audit provider, PricewaterhouseCoopers (PwC) (see paragraph 4.59), with information provided by CLC staff. The Corporate Risk Profile identifies nine enterprise risks. A single risk owner is identified for each risk. The Corporate Risk Profile identifies risk ‘drivers’ and controls however does not identify which risks are outside the CLC risk tolerance or additional treatments.

4.10 There was no indication that the accountable authority had reviewed or endorsed the 2020 Risk Profile. The 2022 Risk Profile was endorsed by the CEO in May 2023.

4.11 During 2022 CLC facilitated certificate level risk management training for management level staff and advised the ANAO that 13 (out of 35) management level staff completed the certificate. CLC risk management training is not mandatory.

4.12 In July 2022 PwC developed a ‘Risk Management Roadmap’ for the CLC. The Risk Management Roadmap recommends six ‘milestones’ needed to embed risk management within CLC: finalise and execute an internal audit plan; dedicate a resource responsible for implementing the risk management framework; identify the gaps in risk management documentation; review organisational capabilities and resources; establish a formal documented operational risk management process; and implement risk management training. CLC engaged PwC in August 2022 to progress the first of these recommendations: the internal audit work plan.

Policy framework

4.16 Policies and procedures are an important part of an entity’s system of internal controls. The CLC has a range of policies and procedures across the various functions of the organisation. There is no central repository or index which identifies the set of polices formally endorsed by the Council or accountable authority, and the respective review dates. The CLC created, for the purposes of the ANAO performance audit, a list of policies that contains links to 80 policies. The 80 policies are all accessible to staff on the CLC’s internal system.

4.17 The ANAO selected eight governance policies for deeper examination. Table 4.1 provides an overview of ANAO’s assessment of these policies, focusing on whether the policies are sufficiently detailed and clear and are consistent with the PGPA Act’s requirements for proper use of resources. Of the sample of eight CLC governance policies, one was not endorsed. The remainder were signed by the CLC CEO (five policies) or a CLC Director (two policies). The ANAO notes that the CLC does not have an asset management, credit card use or gifts and benefits policy, which would be considered core governance areas requiring a policy.

Table 4.1: Selected CLC governance policies^a

Key: ◆ Fully demonstrated ▲ Partly demonstrated ■ Not demonstrated N/A — Not relevant to the PGPA Act

Note a: Risk management and fraud policies are examined in separate sections of this report.

Note b: Assists the reader to clearly understand their obligations and the actions required of them.

Source: ANAO analysis.

4.18 The examined policies are mostly clear and detailed, and consistent with the PGPA Act. Exceptions are described below.

• Code of Conduct for Council Members — The Code of Conduct provides that for less serious offences, members may be given a warning and more serious or repeated breaches will be dealt with by the Executive Committee. The Code of Conduct does not define what constitutes a ‘less’ or ‘more’ serious offence potentially leading to inconsistent application.
• Induction Policy — The Induction Policy provides that employees must sign ‘a specified form’ stating that they have participated in the required inductions. The name of the specified form, or a link to the form, is not provided.
• Information Management Policy — The Information Management Policy, dated 2016 provides that it was ‘scheduled for a comprehensive review by 2020’. The policy was reviewed in May 2023. The policy is not endorsed.

4.19 In addition to corporate governance policies, the ANAO examined operational policies. Three of the five key operational policies being used by staff were in draft format. The ANAO assessed three key operational policies: Legal (draft), Anthropology (draft) and the Aboriginal Association Management Centre Guidelines (AAMC; see paragraph 3.54). The assessed policies were largely fit for purpose in terms of providing clarity, instruction and context to staff. The policies reference the primary legislative requirements, however the policies do not always reference all the current relevant legislation. For example, the Anthropology Policy references the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) and the Native Title Act 1993 (NTA), but not the PGPA Act, even though the commitment of funds (a PGPA Act function) is addressed in the document. A recent review of the Mineral and Energy Unit noted that: there was a large number of procedure documents that staff were required to follow, most of which were updated within the last two to three years; however, one key manual was out of date and referred to a superseded (2006) version of the ALRA.

Are there appropriate arrangements to support the integrity of the Land Council’s operations?

Fraud control

4.22 Under section 27 of the PGPA Act and under section 10 of the PGPA Rule, an official of a Commonwealth entity must not improperly use his or her position to gain, or seek to gain, a benefit or an advantage for himself or herself or any other person, and the accountable authority of a Commonwealth entity must take all reasonable measures to prevent, detect and deal with fraud relating to the entity. Requirements for fraud control by Commonwealth entities are contained in the 2017 Commonwealth Fraud Control Framework, which consists of three tiered documents — the fraud rule, fraud policy and fraud guidance.⁶⁶ As a corporate Commonwealth entity, the CLC must comply with the fraud rule, which ensures a minimum standard for managing the risk and incident of fraud. While Land Councils are not bound by the fraud policy or fraud guidance, the government ‘considers both documents as better practice for corporate Commonwealth entities and expects that these entities will follow the fraud guidance and fraud policy where appropriate in meeting the requirements of the fraud rule’.⁶⁷

4.23 Although the CLC has mechanisms for preventing, detecting and recording fraud, the CLC’s fraud control arrangements fall short of the minimum requirements established in the fraud rule (see Appendix 7). The CLC’s Fraud Policy requires: fraud risk assessments to be conducted; and then, in the event a fraud risk is identified, a specific plan to be developed to manage that identified risk. The CLC advised the ANAO that no fraud risk assessments had been conducted since at least 2018. As no fraud risk assessments have been conducted, there is no fraud control plan that deals with identified risks, as required under the Commonwealth fraud rule.

4.24 The CLC did not state in its annual reports for 2020–21 and 2021–22 whether there were any instances of fraudulent activity identified in the reporting periods. This audit did not examine potential instances of fraud.

Conflict of interest management

4.27 The Australian Commission for Law Enforcement Integrity’s guide on conflict of interest management states:

Agencies should provide clear and consistent guidance to employees on how to identify, declare and manage conflicts of interest. Agency executives and management should regularly communicate about the conflict of interest framework and how it is implemented.⁶⁸

Employees

4.28 The Code of Conduct for employees states that if the employee cannot do their job ‘fairly and impartially’ they have a conflict of interest. They are instructed to inform their manager immediately and to seek approval from the CEO to continue with the activity.

4.29 The CLC has a ‘secondary employment register’ to record CLC employees’ secondary employment arrangements, potential conflicts of interest, and the actions agreed by the CEO to manage any conflicts. There were seven individuals listed in the register (which is dated 2021) as at March 2023. Two conflicts were declared, both raised with the CEO in May 2021; the register does not record the CEO’s decision regarding the materiality of the conflict or a management plan. Although this register was provided to the ANAO as evidence of a central register for employee declarations of conflicts of interest, the register is not fit for purpose since it is limited to those who have secondary employment arrangements and it is incomplete. There is no further evidence that conflicted CLC employees inform their managers and seek approval from the CEO to continue with their work activity, as required under the Code of Conduct.

4.30 The CLC has a Conflict of Interest in the Workplace Policy dated May 2023 which outlines the requirements for staff, including that management plans be established where required. The policy requires the Human Resource Manager or delegate to maintain a register of all reported conflicts of interest.

Council members

4.31 The Code of Conduct for Council Members contains more expansive instructions regarding the declaration of interests. It reflects that the PGPA Act places a duty on officials of the Commonwealth to disclose details of material interests and clarifies that this duty does not apply to a member of a Land Council, if the interest arises because the official is a Traditional Owner or an Aboriginal person who has an entitlement, in accordance with Aboriginal tradition, to enter and use or occupy the land. The Code of Conduct for Council Members urges Council members to declare and manage conflicts.

4.32 Section 29AA of the ALRA requires that each member of a Land Council make written declaration of their direct or indirect pecuniary interests, in a register of interests kept by the Council which is required to be done in accordance with a determination made by the Minister for Indigenous Australians (the Minister). The CLC has not implemented a conflict of interest register for Council members on the basis that no ministerial determination had been made. The other three Northern Territory Land Councils have registers. The CLC advised the ANAO in May 2023 that it intends to implement a register.

4.33 The ALRA does not include provisions for the management of conflict of interest during the conduct of meetings. The CLC has established provisions through Council and Executive Committee meeting rules and a Code of Conduct for Council Members.

• Council Meeting rules — Meeting rules establish that members who have a conflict of interest in relation to a matter being discussed must: declare it, remove themselves if requested by the Chair, and not vote on the matter. The Council may pass a resolution allowing a member to participate in the consideration of (but not vote on) a matter for which a conflict has been declared.
• Executive Committee Rules — Meeting rules require that Executive Committee members who have a conflict of interest in relation to a matter being discussed must declare that conflict of interest before consideration of the matter and must remove themselves from the meeting while the matter is discussed. Members who have a conflict of interest in relation to a matter being discussed may not participate in the discussion and voting on that particular matter. The Council may pass a resolution allowing a member to participate in consideration of, but not vote on, a matter where a conflict of interest has been declared.
• Code of Conduct for Council Members — The Code of Conduct for Council Members requires that the member must ‘absent themselves from the meeting while discussion takes place’. The Code of Conduct states that a member need not disclose a conflict of interest which relates to land over which the member is an owner or native title holder. This is consistent with subsection 12(2) of the PGPA Rule.

4.34 The Rules for Council Meetings and the Code of Conduct for Council Members were updated in June 2021. There is an inconsistency between the two documents over whether a member with a declared conflict must leave the discussion or is only required to do so if the Chair so requires.

4.35 The Council Meeting Rules (see paragraph 3.26) do not require that the CLC record in meeting minutes or elsewhere the details identifying the member who declares a conflict, the nature of the interest or whether the conflicted party let the room. The lack of information does not support transparency over conflicts of interest.

4.36 ANAO examination of the meeting minutes found that a conflict was declared and recorded in the minutes at one Council meeting and one Executive Committee meeting. The minutes of the Council meeting do not record if the Chair requested that the member absent themselves from the meeting or what actions were subsequently taken. The ANAO is therefore unable to assess whether meeting rules were followed in relation to conflict of interest management in full Council meetings. The minutes of the Executive Committee record that the conflicted member abstained from voting.

4.40 The CLC’s policies do not promote the consideration and management of interests that could be perceived by external parties or stakeholders as potential conflicts. For example, the CLC is the founding and largest shareholder of Centrecorp, a commercial entity (see paragraph 3.53). Under the NT Indigenous Economic Stimulus Package (see paragraph 1.26), the CLC allocated $3.6 million to organisations that Centrecorp fully or partly owns. Although the CLC cannot benefit from the operations of Centrecorp under Centrecorp’s constitution, this could create a perception of conflicted interests. PwC, which is contracted to provide CLC’s internal audit function (including over AAMC) is also contracted by CLC to be the external auditor of the organisations for which AAMC provides administration and accounting services. The second matter was raised at a CLC Audit and Risk Committee meeting in December 2022 and PwC undertook that it would consider its management of multiple roles to manage independence. Following this issue being raised during the audit process, PwC and CLC agreed that internal audit work relating to the AAMC was to be excluded from PwC’s internal audit services scope of work.⁶⁹ The CLC could do more, through robust conflict of interest policies and procedures, to minimise the risk of perception of conflicts of interest.

Are the corporate plan and annual report consistent with legislative requirements?

Corporate plan

4.41 The ANAO assessed the CLC’s compliance with requirements for its 2021–2025 Corporate Plan as set out in the PGPA Rule and Finance guidance (Appendix 8).⁷⁰ In summary the 2021–2025 CLC Corporate Plan met the requirements for content relating to its reporting period; introduction; explanation of entity purpose and key activities to achieve that purpose; as well as requirements relating to timeliness of publication. The remainder of this section discusses deficiencies in the 2021–2025 Corporate Plan in relation to the presentation of the operating context and performance reporting.

Operating Context

4.42 Item 4 of subsection 16E(2) of the PGPA Rule 2014 requires the corporate plan to set out (among other things): the environment in which the entity will operate; the strategies and plans the entity will implement to have the capability it needs to undertake its key activities and achieve its purposes; a summary of the risk oversight and management systems of the entity; and the key risks that the entity will manage and how those risks will be managed.

4.43 The 2021–2025 Corporate Plan provides the reader with a clear understanding of the entity’s environment, the strategies and plans that will be implemented to maintain or improve capability, and stakeholders the CLC engages with to reach its purpose. The 2021–2025 Corporate Plan outlines the key risks facing the CLC but does not convey to the reader how the CLC plans to manage those risks, other than a reference to updating the Risk Management Plan.

Performance

4.44 The 2021–2025 Corporate Plan separates performance measures into ‘metric’ and ‘non-metric’ performance measures. The ‘metric’ measures address established outputs that the CLC is confidently able to measure. The ’non-metric’ measures are ‘initiatives’ that the CLC plans to complete during the term of the plan. The 2021–2025 Corporate Plan also states that qualitative case studies will be published in the annual report, to reflect some work of the CLC which is not easily quantified, and the 2021–22 Annual Report includes links to case studies. Each metric performance measure is mapped to a ‘Strategic goal’, ‘Performance Criteria’, ‘[Key Performance Indicator] Number’, and ‘Strategy reference’. Actual performance results for each measure for the prior five reporting periods are provided, as well as a 2021–22 target and ‘Target Forecast’ for the next three reporting periods.

4.45 All of the metric measures have clear targets which allow for measurement of performance in achieving activities and outputs over time. For example, the CLC measures:

• the number of ‘land management committee’ meetings and consultative forums with ‘effective’ Traditional Owner representation (target of 60 per annum)⁷¹; and
• the number of ‘distribution committee’ meetings held regarding land use income (target of 85 in 2022–23).⁷²

4.46 The annual performance statements do not have efficiency, timeliness or outcome measures.

Annual report

4.48 The CLC’s 2021–22 Annual Report was largely compliant with PGPA and ALRA requirements, except for section 16F, as set out in Appendix 8.

4.49 Subsection 46(1) of the PGPA Act requires that ‘an entity’s annual report must be given to the responsible minister by the 15th day of the fourth month after the end of the reporting period’ (15 October for Land Councils).⁷³ The CLC met the 15 October timeframe between 2018–19 and 2021–22.

Annual performance statements

The ‘clear-read’ principle

4.50 A clear line of sight between an entity’s planning documents (corporate plan) and its key reporting document (annual report) is known as the ‘clear-read’ principle.⁷⁴ There is a clear line of sight between the 2021–2025 Corporate Plan and the 2021–22 Annual Report. The structure and wording of the performance measures in the two documents are identical and the targets remained consistent.

PGPA Rule section 16F requirements

4.51 The annual performance statements of an entity, published in the annual report, must provide information about the entity’s performance in achieving its purposes and comply with any requirements prescribed under section 16F of the PGPA Rule. The CLC’s 2021–22 Annual Report contains a statement that the performance statements are prepared for paragraph 39(1)(a) of the PGPA Act and a statement specifying the reporting period for which the performance statements are prepared (2021–22). The 2021–22 Annual Report does not contain a statement that, in the opinion of the CLC accountable authority, the performance statements accurately present CLC’s performance in the reporting period.

Development of the corporate plan and annual report

4.52 While a Land Council accountable authority is required to prepare and submit a corporate plan and annual report to the Minister under the PGPA Act, the Council has specific functions under the ALRA and should be involved in the development of the corporate plan and the annual report. The accountable authority should also gain assurance that the information published in the corporate plan and annual report, including in the performance statements, is complete and accurate.

Involvement of the Council

4.53 The CLC engaged the full Council and the Executive Committee in the development of the 2021–2025 Corporate Plan.

• At the April 2021 full Council meeting, members were separated into the nine regions they represent to be informed on and provide feedback on the draft corporate plan. This included a presentation of the draft corporate plan with visual and audio aids, including some content in Aboriginal languages for some of the CLC regions. CLC staff received feedback from the members, with discussion focusing on the members’ views on the seven CLC goals expressed in the corporate plan.
• The CLC advised that a similar exercise was conducted at the May and June 2021 Executive Committee meetings. The CLC CEO attended the May 2021 workshop and led some discussions.
• At the August 2021 full Council meeting, CLC staff reiterated to members the purpose of the corporate plan, summarised feedback received from previous sessions and explained the changes that had been made as a result of that feedback.

4.54 The 2021–2025 Corporate Plan reflects the priorities and feedback from the Council obtained at these sessions. The CLC also incorporated feedback from members as to how information should be visually presented and worded. Specific actions were also added to the 2021–2025 Corporate Plan to address issues raised by the Executive Committee.

4.55 The CLC engaged with the National Indigenous Australians Agency (NIAA) in preparing its corporate plans and annual reports and provided drafts of these documents to NIAA for review. The NIAA assisted the CLC to meet relevant requirements for the production of these documents and provided comments on drafts to improve their content and presentation.

Performance Statements Assurance

4.56 The metric measures are extracted from a performance ‘dashboard’. The dashboard contains 37 spreadsheets with around 700 business information and performance measures across the different business areas of the CLC. Metrics are updated half-yearly, with data provided by the respective business unit manager. A Planning and Performance Officer collates the data in the dashboard and is responsible for putting relevant metrics into the annual report. The dashboards allow for a visual representation of information and data, facilitating the monitoring and presentation of trends. The CLC has used the dashboard system since 2016.

4.57 The dashboard provides the accountable authority with visibility over the CLC’s performance. The CLC advised the ANAO that the Planning and Performance Officer reviews the data for reasonableness, however the data entered by business unit managers is not independently verified. The ANAO has confirmed that the metric measures reported in the performance statements align with those in the dashboard.

Do the Audit Committee and internal audit function provide adequate oversight and scrutiny of the Land Council’s operations?

Internal audit function

4.58 An internal audit function may be established, and is an important mechanism in relation to the accountable authority’s responsibility under section 16 of the PGPA Act to establish a system of internal control.⁷⁵ The CLC maintained an internal audit function between 2016 and 2020. Audits and reviews conducted over the period 2018 to 2020, which were provided to the Audit and Risk Committee (ARC), covered inventories, cyber resilience, procurement and payables, the ranger training program and Community Development Unit (see paragraph 3.59) activities.

4.59 In March 2021 the CLC commissioned a review of its internal audit function by PwC. Arrangements for an outsourced internal audit provider were finalised with PwC in August 2022.

4.60 Internal audits in 2022–23 included the operations of the Minerals and Energy Unit and Community Development Unit, the payroll function and information security. The CLC has established a two-year internal audit plan.

Establishment and composition of the Audit and Risk Committee

4.61 Appendix 9 summarises the ANAO’s assessment of the effectiveness of the CLC ARC Charter and composition against the PGPA Rule requirements and Department of Finance (Finance) guidance.

Charter

4.62 An ARC Charter was approved by the CEO on 5 May 2023 replacing the previous Audit Committee Charter dated 30 June 2020. The Charter contains the relevant requirements as set out in the PGPA Rule and associated Finance guidance. The 2020 and 2023 Charters provide that the ARC will review the Charter annually and that any substantive changes to the Charter will be recommended by the ARC and approved by the accountable authority.

Member characteristics

Skills and experience

4.64 The CLC ARC Charter requires the ARC to comprise a minimum of three independent members, with the ARC Chair appointed by the accountable authority. In 2021–22, the ARC comprised a Chair and three other members.

4.65 The ARC Charter does not include any requirements relating to the specific skills and experience of members. Of the four ARC members as at February 2023, two members are chartered accountants, one member is a lawyer with experience and knowledge of central Australia and the Chair is a former CEO of a not-for-profit entity that provides technology and technical training to Indigenous people living in remote communities.

Independence

4.66 As noted in the 2018 Independent Review into the operation of the Public Governance, Performance and Accountability Act 2013 and Rule, ‘[t]he independence of audit committees from the day-to-day activities of management is critical to the contribution that they can make to good governance in an entity’.⁷⁶ None of the four ARC members are Council members or employees of the CLC.

4.67 The CLC’s ARC Charter requires members to provide written declarations, once each year through the Chair to the accountable authority, declaring any material personal interests they may have in relation to their responsibilities and to declare any material personal interests at the beginning of each meeting that may apply to specific matters on the meeting agenda. As at January 2023 there was no record of any written annual declarations being made by CLC ARC members in the previous 12 months. A declaration of member interests is a standing item on the agenda at each ARC meeting. The minutes for CLC ARC meetings held in 2021–22 recorded one declaration of interest by members.

Remuneration

4.70 Finance guidance does not establish a standard for Audit Committee remuneration and indicates that the remuneration should be commensurate with the importance of responsibilities and the commitment required.⁷⁷

4.71 CLC ARC members are paid a set sitting fee for meetings attended (with the Chair paid a higher fee), and additional amounts for travel depending on the number of hours. The CLC increased its sitting fees paid to members in 2021–22, from $1000 per meeting for all members to $1500 for the Chair and $1250 for other members. This was the first increase in fees paid since the CLC’s ARC was established and was in response to advice from the CLC’s contracted internal audit partner. The CLC 2021–22 Annual Report noted that the ARC met five times and members were paid a total of $25,250 with individual members receiving between $6050 and $6700 depending on the number of meetings they attended.⁷⁸ Total remuneration for the Chair was $6700.⁷⁹

Rotation

4.72 The 2018 Independent Review into the operation of the Public Governance, Performance and Accountability Act 2013 and Rule recommended that accountable authorities ‘establish an audit committee membership rotation policy, with maximum appointment terms to ensure regular rotation of committee membership’.⁸⁰ Finance guidance indicates that the Finance Secretary wrote to all accountable authorities in August 2019 drawing their attention to this recommendation.

4.73 The CLC’s ARC Charter includes a term limit of three years for each member and an appointment may be extended on each occasion for a further two years. The Charter is silent on the reappointment of ARC members but includes a requirement that membership be reviewed periodically (at least every three years) ‘with the aim of ensuring an appropriate balance between continuity of membership, the contribution of fresh perspectives and a suitable mix of qualifications, knowledge, skills and experience’.

4.75 The ARC Chair was first appointed in 2010 and in November 2021 was reappointed until 31 December 2023. The other members were appointed in 2010 (current term expires September 2023), 2016–17 (current term expires May 2024) and 2021–22 (current term expires June 2024), respectively.

4.76 In November 2021 the CLC CEO requested the ARC seek out a further member of the ARC who is based in Alice Springs. As at May 2023 no additional member had yet been appointed to the CLC ARC.

Effectiveness of Audit and Risk Committee operations

4.77 Appendix 9 presents the ANAO’s assessment of the effectiveness of the CLC ARC’s operations against the PGPA Rule requirements and Finance guidance.

Mandatory functions

4.78 The PGPA Rule requires that the audit committee review the appropriateness of the accountable authority’s financial reporting, performance reporting, system of risk oversight and management and system of internal control. The CLC Audit Committee’s execution of its mandatory functions is partly compliant with requirements. The CLC Audit Committee’s review of performance reporting, including the annual performance statements required under the PGPA Act, was conducted as part of the preparation of the Corporate Plan and Annual Report. There is no evidence of substantive consideration of the appropriateness or completeness of the performance measures by the CLC ARC in 2021–22.

Audit and Risk Committee reporting

4.79 The ARC has mandatory and recommended requirements in relation to reporting in the annual report, and to the Land Council. The ARC’s reporting requirements were partly met.

• Charter and committee members — The CLC’s 2021–22 Annual Report included a direct electronic link to the ARC Charter, and information about the committee’s members including name, qualifications and remuneration. Specific information about the number of meetings attended by each member was not reported, although minutes for the five committee meetings held during 2021–22 record that all members attended all meetings.
• Written statement — The CLC ARC Charter requires the ARC to report at least once annually to the accountable authority as to whether all functions/responsibilities outlined in the Charter have been carried out. In 2021–22, while the CLC advised the ANAO that the ARC verbally reported to the CEO, the ARC did not provide a written statement to the accountable authority of its view on the appropriateness of the organisation’s financial reporting; performance reporting; system of risk oversight and management; and system of internal control.
• Assessment of ARC performance — The ARC Charter includes a provision that the Chair of the ARC will initiate a self-assessment of the performance of the ARC annually. A written record of a review of the ARC’s performance by the accountable authority was not made in 2021–22.

Appendix 1 Entity responses

ANAO comment on the PricewaterhouseCoopers response

See paragraph 4.40 including related footnote.

Appendix 2 Improvements observed by the ANAO

1. The existence of independent external audit, and the accompanying potential for scrutiny improves performance. Improvements in administrative and management practices usually occur: in anticipation of ANAO audit activity; during an audit engagement; as interim findings are made; and/or after the audit has been completed and formal findings are communicated.

2. The Joint Committee of Public Accounts and Audit (JCPAA) has encouraged the ANAO to consider ways in which the ANAO could capture and describe some of these impacts. The ANAO’s 2022–23 Corporate Plan states that the ANAO’s annual performance statements will provide a narrative that will consider, amongst other matters, analysis of key improvements made by entities during a performance audit process based on information included in tabled performance audit reports.

3. Performance audits involve close engagement between the ANAO and the audited entity as well as other stakeholders involved in the program or activity being audited. Throughout the audit engagement, the ANAO outlines to the entity the preliminary audit findings, conclusions and potential audit recommendations. This ensures that final recommendations are appropriately targeted and encourages entities to take early remedial action on any identified matters during the course of an audit. Remedial actions entities may take during the audit include:

• strengthening governance arrangements;
• introducing or revising policies, strategies, guidelines or administrative processes; and
• initiating reviews or investigations.

4. In this context, the below actions were observed by the ANAO during the course of the audit. It is not clear whether these actions and/or the timing of these actions were planned in response to proposed or actual audit activity. The ANAO has not sought to obtain assurance over the source of these actions or whether they have been appropriately implemented.

Appendix 3 Powers, functions and duties of the Land Councils

Land Councils’ powers

1. The Land Councils’ powers are mainly described in section 23AA, section 27 and Part IV of the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA). The Land Council has the power to determine priorities, allocate resources, employ staff, give directions to Land Trusts, receive moneys and grant licenses.

2. Section 203BK of the Native Title Act 1993 (NTA) establishes that a native title representative body has the power to do all things necessary or convenient to be done for or in connection with the performance of its functions.

3. Section 20A of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) indicates that the accountable authority has the power to give instructions to an official about a matter relating to finance law.

Land Councils’ functions

4. The Land Councils’ functions are mainly described in subsection 23(1) of the ALRA. In summary, these include to:

• ascertain and express the wishes of Aboriginal people living in the area of the Land Council regarding the management of Aboriginal land;
• protect the interests of relevant Aboriginal people;
• assist Aboriginal people to protect sacred sites;
• consult with relevant Aboriginal people regarding any proposal relating to the use of the land;
• negotiate with persons having interests in the land;
• assist Aboriginals living in the area of the Land Council to carry out commercial activities (so long as this is done in a manner that will not cause the Land Council to incur financial liability or receive financial benefit);
• assist Aboriginal people with traditional land claims; and
• keep registers of Council and Land Trust members.

5. Sections 34 and 37 also establish the Land Councils’ functions in relation to preparing estimates of administrative or capital costs for ministerial approval; and obligations in relation to preparing an annual report under the PGPA Act.

6. Under the NTA (section 203BB), Native Title Representative Bodies’ key functions are to facilitate and assist through research and preparation of native title applications; and assist Prescribed Body Corporates and native title holders in consultations, mediations, negotiations and proceedings relating to native title applications, future acts, Indigenous land use agreements and rights of access. Other functions include certification of applications for determination and registration of native title (section BE), dispute resolution (section BF), notifications (section BG) and agreement making (section BH).

7. Under the PGPA Act, accountable authority functions include to keep records (section 37), including those relating to the approvals of a commitment of relevant money (section 18) and those relating to financial transactions and position (section 41); prevent, detect and deal with fraud (Section 10); establish and determine the functions of an audit committee (sections 17 and 45); and prepare a corporate plan (sections 16E and 35), budget estimates (section 36), performance statements (sections 16F and 39), annual financial statements (section 42) and an annual report (section 46).

Land Councils’ duties

8. Under the ALRA, Land Councils’ primary duties relate to: consulting and obtaining consent from Traditional Owners and affected Aboriginal people (subsection 23(3) and section 23AA); attempting dispute conciliation (subsection 25(1)); disclosing pecuniary interests (section 29AA); spending money and disbursing royalties, and exploration and mining interest payments, within six months (section 35). The various provisions set out when the Land Council has a duty to seek the Minister’s approval and keep the Minister informed.

9. Under the NTA, the duties of the Land Councils as Native Title Representative Bodies relate primarily to financial management and access to information.

10. The duties applying to the Land Council accountable authority under the PGPA Act include: disclosing material personal interests that relate to the affairs of the entity (section 13); governing the entity to promote the proper use and management of public resources (section 15); establishing and maintaining systems relating to risk and control (section 16); encouraging cooperation of officials with others (section 17); taking account of the risk and effect of imposing requirements on others (section 18); and keeping the Minister informed (section 19). This is in addition to general duties prescribed in sections 25–29.

Appendix 4 Decision-making authority

Table A.1: Decision-makers under the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA)

Source: Extracts from the Aboriginal Land Rights (Northern Territory) Act 1976.

Table A.2: Decision-makers under the Performance and Accountability (PGPA) Act 2013 and the Public Governance, Performance and Accountability Rule 2014

Source: Extracts from the Public Governance, Performance and Accountability Act 2013 and the Public Governance, Performance and Accountability Rule 2014.

Table A.3: Decision-makers under the Native Title Act 1993 (NTA)

Source: Extracts from the Native Title Act 1993 (Cth), the Native Title (Recognition as Representative Body — Northern Land Council) Instrument and the Native Title (Recognition as Representative Body — Central Land Council) Instrument 2018.

Appendix 5 Delegation of ALRA powers and functions

1. Under section 28, the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) prescribes that the Land Council may delegate its functions and powers, with some exceptions: to the Chair or another member of the Council; or to a member of staff.⁸¹

2. Under subsection 28(2) and section 29A, the Council may also appoint one or more committees of its members to assist it in relation to the performance of any of its functions or the exercise of any of its powers, also with some exceptions.⁸²

Table A.4: Delegation under the Aboriginal Land Rights (Northern Territory) Act 1976

Source: Extracts from the Aboriginal Land Rights (NT) Act 1976.

Appendix 6 Requirements for governance arrangements

Appointment of key governance positions

1. The Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) prescribes how Council and Land Trust⁸³ members, including the Chair and Deputy Chair of the Council must be appointed.

• Land Trust members — ALRA (section 7) establishes that, unless the Minister for Indigenous Australians (the Minister) determines otherwise, the membership of Land Trusts will consist of a Chair and three other members, appointed by the Minister upon receiving from the Land Council nominations of Aboriginal people living in the area of the Land Council, or whose names are set out in a Traditional Owners register. Trust members are appointed for a maximum of five years and are eligible for re-appointment. It does not specify a method to nominate Land Trust members.
• Council members — ALRA (section 29) establishes Council members’ eligibility criteria and that Council members shall be Aboriginal people living in the area of the Land Council, or whose names are set out in a Traditional Owners register, chosen by Aboriginal people living in the area of the Land Council in accordance with a ‘method of choice’. The method of choice is to be approved by the Minister. Section 29 also establishes that a Land Council may, with the approval of the Minister, co-opt a maximum of five Aboriginal people living in the area of the Land Council as additional members of the Council. A range of disqualifying events apply to candidates for election or to elected members.⁸⁴
• Chair and Deputy Chair — ALRA (section 30) establishes that the Land Council shall elect two members of that Council as the Chair and the deputy Chair for a period of three years. The Chair and Deputy Chair are eligible for re-election.
• Land Council staff — ALRA (subsections 27(1) and 27(2)) establish that Land Councils have the power to employ staff and to determine the terms and conditions of the employment of Land Council staff. It is implied that this includes the Chief Executive Officer (CEO) of the Land Council.

Establishment of committees

2. ALRA (section 29A) establishes that a committee can be appointed by the Council to assist it in relation to the performance of any of its functions or the exercise of any of its powers and must comprise at least seven members or such other number as is prescribed by the regulations.

Establishment of Council and Committee meeting rules

3. In relation to Council meetings, ALRA (section 31) establishes that:

• a Land Council must have written rules, which must be approved by the Minister;
• these rules must be made available for Traditional Owners in the area of the Land Council and any Aboriginal people living in the area of the Land Council to inspect;
• the quorum for meetings must be half the number of the Council members if there is an even number of members in the Council; or half minus one if there is an odd number;
• a Land Council must keep minutes of its meetings, which Traditional Owners and any Aboriginal living in the area of the Land Council must be able to inspect; and
• decisions must be made by a majority of the members present, and in the case of an equal vote, the member presiding the meeting will have a casting vote.

4. In relation to committee meetings, section 29A of the ALRA establishes that:

• rules must be established for committee meetings and provided to the Minister; and
• minutes of meetings must be kept by the Land Council, and made available for Traditional Owners and any Aboriginal living in the area of the Land Council to inspect.

Compiling and maintaining registers

5. ALRA (paragraph 23(1)(g)) prescribes that Land Councils must keep a register of Council members; and a register of Land Trust members which includes descriptions of each area of the land held by the Land Trust(s). Under ALRA (section 24), Land Councils may compile and maintain a register of the Traditional Owners.

Appendix 7 Compliance with the Commonwealth fraud rule

1. Section 10 of the Public Governance, Performance and Accountability Rule 2014 prescribes the six primary measures that the accountable authority of a Commonwealth entity must take to prevent, detect and deal with fraud.

Table A.5: Central Land Council’s (CLC) compliance with the Commonwealth fraud rule

Key: ◆ Fully compliant ▲ Partly compliant ■ Not compliant

Source: ANAO analysis of CLC Fraud Control Policy and other records.

Appendix 8 Compliance with corporate plan, annual report and performance statements

Corporate Plan

1. Section 35 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) requires the accountable authority of a Commonwealth entity to prepare a corporate plan in accordance with any prescribed rules and give the corporate plan to the responsible Minister and Finance Minister.

2. Section 16E of the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) sets out the relevant requirements for corporate plans which includes the period it is to cover, mandated topics, and presentation and publication requirements. The Department of Finance (Finance) also prepares guidance to assist entities to prepare their corporate plan.⁸⁵

Table A.6: Compliance of Central Land Council’s (CLC’s) 2021–2025 Corporate Plan with PGPA Rule 16E requirements

Key: ◆ Fully compliant ▲ Partly compliant ■ Not compliant

Note a: Central Land Council, Central Land Council Corporate Plan 2021–2025, available from https://www.clc.org.au/ central-land-council-corporate-plan-2021-2025/ [accessed 6 February 2023].

Source: ANAO analysis of Central Land Council 2021–2025 Corporate Plan.

Annual report

3. Annual reporting requirements are established in the PGPA Act and the PGPA Rule. Guidance issued by Finance outlines mandatory content, preparation and publication arrangements and defines mandatory digital publication requirements.

4. The ALRA also requires Land Councils to include in their annual report information relating to fees; amounts held or paid under certain agreements; and details about committees, township leases and consultants.

Table A.7: Compliance of Central Land Council’s (CLC’s) 2021–22 Annual Report with PGPA Act, PGPA Rule and ALRA requirements

Key: ◆ Fully compliant ▲ Partly compliant ■ Not compliant

Note a: Central Land Council, Central Land Council 2021–22 Annual Report, available from https://www.clc.org.au/clc-annual-report-2021-22/ [accessed 6 February 2023].

Source: ANAO analysis of Central Land Council’s 2021–22 Annual Report.

Annual performance statements

5. The annual performance statements of an entity, published in the annual report, must provide information about the entity’s performance in achieving its purposes and comply with any requirements prescribed under section 16F of the PGPA Rule.

6. This audit examined whether, at a high level, the measures and targets provide meaningful performance information. It did not assess whether the Land Council’s performance statements met the requirements of the PGPA Rule, and in particular draws no conclusions about reliability, verifiability, potential bias or measurability over time. The Auditor-General’s functions include auditing the annual performance statements of Australian Government entities in accordance with the PGPA Act as set out in section 15 of the Auditor-General Act 1997. These audits apply a comprehensive methodology to the assessment of selected entities’ performance statements. See Auditor-General Report No. 23 2021–22, Audit of the Annual Performance Statements of Australian Government Entities – Pilot program 2020–21.

Table A.8: Compliance of Central Land Council’s 2021–22 Annual Performance Statements with PGPA Rule requirements

Key: ◆ Fully compliant ▲ Partly compliant ■ Not compliant

Note a: The statement should include a declaration that the performance statements were prepared as soon as practicable after the end of each reporting period for the entity; specifying the relevant reporting period; and presenting accurately the entity’s performance, including by providing information about the entity’s performance in achieving its purposes and complying with any requirements prescribed by the PGPA Rule.

Source: ANAO analysis of the Central Land Council’s 2021–22 Annual Performance Statements.

Appendix 9 Compliance with Audit Committee requirements and guidance

1. The purpose of an audit committee is to provide independent advice and assurance to the entity’s accountable authority. Section 45 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) states that the accountable authority of a Commonwealth entity must ensure that the entity has an audit committee. The Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) states that the accountable authority of a Commonwealth entity must, by written charter, determine the functions of the audit committee for the entity, and that these must include reviewing the appropriateness of the accountable authority’s financial and performance reporting; system of risk oversight and management; and system of internal control for the entity.⁸⁶ The PGPA rule also states that the audit committee of a corporate Commonwealth entity must consist of at least three persons who are not employees of the entity and who have appropriate qualifications, knowledge, skills and experience.

2. In September 2021, the Department of Finance released a guide (Finance guidance) for corporate Commonwealth entities on the role of audit committees.⁸⁷ The Finance guidance sets out the better practice principles for the establishment and operation of a corporate Commonwealth entity audit committee, to help ensure that the committee provides independent advice and assurance to the entity’s accountable authority. The Finance guidance states that:

Audit committees are integral to good corporate governance. They provide advice to accountable authorities, assist them to meet their duties and obligations, and support the development of key practice and capacity within corporate Commonwealth entities.⁸⁸

Table A.9: Effectiveness of Central Land Council Audit and Risk Committee Charter and member composition

Key: ◆ Fully compliant ▲ Partly compliant ■ Not compliant

Source: ANAO analysis.

3. Finance guidance states that the audit committee ‘should inherently have sound knowledge of the entity’s operating context … In order to understand and review the entity’s processes and systems the committee also actively pursues information from relevant areas of the entity’.⁸⁹

Table A.10: Effectiveness of the Central Land Council Audit Committee operations

Key: ◆ Fully compliant ▲ Partly compliant ■ Not compliant

Source: ANAO analysis based on analysis of Audit and Risk Committee meeting minutes and papers for 2021–2022.