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 Northern Land Council (NLC), the Central Land Council (CLC), 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.²

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.³ Upon the Aboriginal Land Commissioner’s satisfaction that the Traditional Owners⁴ 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.⁵ 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 Trust⁶, 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.⁷

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.⁸ As at 2023 native title had been recognised over 358,402 square kilometres (25 per cent) of land and waters in the NT.⁹

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.¹⁰

Public Governance, Performance and Accountability Act 2013

1.8 The four NT Land Councils are corporate Commonwealth entities¹¹ 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).¹²

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 NLC 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 corporate¹³ 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.¹⁴ 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 2023¹⁵, 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. There are no township leases in the area of the NLC managed by the Executive Director of Township Leasing.

Source: ANAO analysis.

About the Northern Land Council

1.23 The NLC’s jurisdiction is divided into seven regions (Figure 1.1), which cover an area of approximately 572,000 square kilometres. Thirty-six per cent of this area is Aboriginal land under the ALRA; and 31 per cent is subject to native title rights and interests under the NTA.

1.24 Approximately 51,000 Aboriginal people live in the NLC region, 80 per cent of whom live in regional or remote areas.¹⁶ The NLC’s jurisdiction is linguistically diverse, with over 70 Aboriginal language groups. There are approximately 1700 land owning groups.

Figure 1.1: NLC regions

Source: Northern Land Council.

1.25 The full Council of the NLC has 83 members, comprising 78 elected members and five ‘co-opted’ women who are appointed by the NLC Chair.¹⁷ As at April 2023 there were 18 women on the full Council. The NLC has established three types of committees and subcommittees.

• Executive Council — the Executive Council is comprised of 14 Council members who are elected from the full Council, with two members representing each region. Its role includes ensuring legislative responsibilities are discharged, appointing the CEO and communicating with regional Councils.
• Regional Councils — each Council member represents their region on one of the NLC’s seven regional Councils, and their role includes consulting communities in their region about issues to be raised with Executive Council members.
• Women’s Advisory Group — to which all female Council members are invited. Women’s subcommittee meetings are held on the day before the full Council meetings ‘to discuss cultural women’s issues’.

1.26 In 2021–22 the NLC had 497 employees, of which 347 were full-time or part-time permanent employees, and 150 were casual employees to support seasonal workloads during the dry season. Sixty per cent of its workforce identify as Aboriginal or Torres Strait Islander. The NLC has 12 offices across its jurisdiction, including its head office located in Darwin.

1.27 In 2021–22 the NLC’s operating budget was $82.7 million, comprising a $59.9 million appropriation from the Aboriginals Benefit Account, $5.1 million under the native title program, and $17.7 million from special purpose grants. In addition, under the NT Indigenous Economic Stimulus Package the NLC received $14.7 million in 2021–22 and $22 million in 2020–21 to support Indigenous businesses and jobs in the NT.¹⁸ In 2021–22 $67.5 million of royalties, rents, lease monies and native title compensation were paid into the NLC’s Royalty Trust Account for distribution to Traditional Owners and native title holders. The NLC holds property and other non-financial assets valued at $18.2 million.

Rationale for undertaking the audit

1.28 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.

1.29 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

1.30 The objective of the audit was to assess the effectiveness of the governance of the Northern 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.

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

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

1.32 The audit did not specifically examine prescribed bodies corporate under the Native Title Act 1993 except where they related to the governance of the Northern Land Council.

Audit methodology

1.33 The audit involved:

• reviewing legislation, regulations, policies and best practice standards;
• reviewing NLC documentation, including charters, meeting papers and minutes, policies and procedures, annual reports, corporate plans and correspondence;
• visits to the NT, including Darwin, Tiwi Islands, Katherine, Jabiru and Elliott;
• observing meetings of the full Council, Executive Council, regional Councils, and Audit Committee;
• observing NLC consultations with Aboriginal people;
• meetings with members and staff of the NLC, and officers from relevant business areas within the:
  • Australian Government (including the NIAA, Office of Township Leasing and Office of the Registrar of Indigenous Corporations);
  • NT Government (including the Office of the Chief Minister and Cabinet; Department of Infrastructure, Planning and Logistics; NT Electoral Commission, and Aboriginal Areas Protection Authority);
  • NT local government; and
• 28 meetings with and 14 submissions from businesses, Aboriginal corporations, members of the public, peak bodies and non-government organisations operating in the NLC area.

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

1.35 The team members for this audit were Chayathri Kulatunge, Dr Isabelle Favre, Eliza Glascott, Weinnie Zhou, Kai Swoboda, Alicia Vaughan, Michael Commens, Dr Jennifer Canfield, Sam Hayward, Graeme Corbett, 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.¹⁹

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’s 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 and the NTA?

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.²⁰ 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.²¹ 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; to committees of the Council; and to 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 NLC through the Council’s delegation of ALRA powers and functions.

2.7 The NLC made its first instrument of delegation under the ALRA in 1996 and this has been amended four times. The most recent version was agreed by the full Council on 30 May 2017. There is certainty around specific delegations under the instrument.

• Non-delegated ALRA powers (that is, those retained by the full Council) are clearly set out in the instrument of delegation.²²
• The devolvement of power to the Executive Council is very broad in that all powers are delegated except: those explicitly retained by the full Council; and the power to direct a Land Trust to grant, transfer or surrender any estate or interest in land under an agreement that will have effect for a period that exceeds 40 years.
• Powers are devolved to regional Councils and officials employed by the NLC including the CEO and Chief Financial Officer.

2.8 The full Council as a Native Title Representative Body under the NTA has delegated functions and powers in a separate delegation instrument. The most recent version of the delegation instrument was agreed by the Council on 17 December 2021, and meets the requirements of the ALRA because it is in writing and under the common seal of the Council.

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

2.9 The CEO has put in place a ‘Financial Delegations Policy’ (May 2022), the stated purpose of which is to ‘to assign delegations of authority with regard to finance matters’. The Financial Delegations Policy uses the terms ‘policy’, ‘delegates’ and ‘authorises’ interchangeably. This diminishes the clarity of the purpose and legal intent of the policy.²³ The Financial Delegations Policy does not represent an appropriate instrument of delegation (because it is not made under common seal of the Land Council) or authorisation (because it is not made by the Land Council Chair and CEO as the accountable authority).

2.10 The Financial Delegations Policy does not clearly identify which specific sections of the ALRA or PGPA are being delegated to officials. The lack of specificity in the delegations means that the ANAO cannot determine if these are related to functions that are incidental to the Council’s functions under the ALRA or are more correctly functions and powers held by the accountable authority under the PGPA Act.

2.13 The Department of Finance advised the ANAO in February 2023 that how the accountable authority (that is, the Council Chair and the CEO) 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).

2.14 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 NLC does not have a governance document explaining how the accountable authority intends to manage its joint responsibilities under the PGPA Act.

2.18 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.

2.19 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.²⁴

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 claims, 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.²⁵
• 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.²⁶
• Distribution of royalties and payments — Land Councils must distribute royalties and other payments, such as rents, to, or on behalf of, Traditional Owners.²⁷

3.3 Land Councils and Land Trusts are exempt from compliance with the Freedom of Information Act 1982.²⁸ 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 the 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 method of choice

3.5 The NLC’s method of choice was approved by the Minister for Indigenous Australians (the Minister) on 9 November 2016. The method of choice establishes the composition of the Council and the selection process for 78 positions.

• The 78 members are nominated from 54 listed communities or outstations, for a term of three years. Each community or outstation has between one and four Council member positions. The method of choice does not indicate in what way the distribution of Council member positions across communities should reflect population size or other demographic characteristics.
• In some communities and outstations, members are nominated by incorporated Aboriginal organisations that are recognised by the Council (‘recognised entity’).
• Communities or outstations that do not have a recognised entity shall, with the assistance of an employee of the NLC, hold a meeting to nominate a person or persons to be a member of the NLC.

3.6 An additional five members have been co-opted since 1993 using a provision under the ALRA that allows the NLC, with the approval of the Minister, to co-opt or appoint up to five members that are Aboriginal people living in the NLC area. The NLC’s method of choice does not outline how the co-opted members are to be selected. The 2017 ‘NLC Handbook — Rules for Councillors’ (the Handbook), which was approved by the Minister on 19 July 2017, states that five co-opted women are appointed by the Chair on advice from the Executive and regional Council members, for the purpose of improving female representation.

3.7 The method of choice does not specify how the NLC determines which incorporated Aboriginal organisations to ‘recognise’, list the recognised entities, indicate the number of Council member positions associated with each recognised entity, or specify the mechanism adopted by recognised entities to nominate a member to the Council. The NLC has a separate list of recognised entities. It does not have criteria or guidelines for recognising entities and does not have input into recognised entities’ nomination processes. The NLC advised the ANAO that: ‘there are discussions between Aboriginal entities as to [which entity] is best placed to have the responsibility’; Council members ultimately determine which organisations should become recognised entities; and the latest list of recognised entities was endorsed by the full Council in June 2019.

3.8 The method of choice specifies that ‘all people in the community have a chance to find out that nominations must be made and have a good chance to have their say over who the member should be.’ The method of choice, list of recognised entities and list of communities or outstations that do not have a recognised entity, are not publicly available.

Review of the method of choice

3.11 The NLC advised the Minister in 2016 that the Council had resolved to review the method of choice, but that the review would not be completed in time for the November 2016 member nominations. The NLC identified that a review was needed to ensure that the distribution of seats reflected Indigenous population changes that had occurred since 2001. The Minister approved the 2016 method of choice with the understanding that the 2016–2019 Council would finalise a review.²⁹

3.12 As at April 2023 the review had not been completed, and the 2016 method of choice was used to conduct the Council nomination process of October–November 2022.

• In the Land Rights News December 2018 issue³⁰, the NLC announced that it was reviewing the seat distribution ahead of Council nominations in the second half of 2019. The review did not occur.
• In February 2020 the NLC advised the Minister that it planned to conduct a review and propose a revised method to the Minister prior to 2022 nominations. The advice noted there had been three complaints about the 2019 member nomination process.³¹ In April 2021 the NLC advised the Minister that due to COVID-19 disruptions, the review had not been completed, and that a revised method of choice would be submitted to the Minister in early 2022 following consultations.³² This also did not occur.
• In September 2022 the NLC advised the Executive and regional Councils that community consultations would be conducted in 2023. The NLC advised the ANAO that the 2023 consultations would consider the ‘appropriateness of recognised entities’ and would be finalised by 2025, in time for the next Council member nomination process.

October–November 2022 Council member nominations and remuneration

3.15 In the October–November 2022 nomination process, 60 positions were to be nominated by 43 recognised entities and 18 positions were to be nominated through a community meeting. The outcome of the nomination process was the appointment of 74 members, with four positions remaining vacant as at April 2023.

3.16 The method of choice specifies that ‘all people in the community have a chance to find out that nominations must be made and have a good chance to have their say over who the member should be.’ Posters and information packs were sent to recognised entities. In late September 2022 the NLC telephoned recognised entities, and emailed Council members, recognised entities and NLC regional offices, to inform them about the nomination process. Emails to Council members and recognised entities were not sent prior to the date that nominations opened. The NLC advertised the nomination process on social media platforms.³³ The NLC did not use other forms of media (such as its website, Land Rights News or the radio) to inform stakeholders about the nomination process.

3.18 A recognised entity nomination is valid if a signed and witnessed nomination in writing and a copy of the resolution of the recognised entity’s governing body is provided to the NLC. A community nomination is valid if there is a nomination in writing and a report about the nomination meeting by an NLC officer.

3.19 The ANAO examined nomination documentation for 13 of 74 filled positions in October–November 2022 (nine from recognised entities and four from communities without a recognised entity) to determine if nominations were supported by the required documentation. Three of the 13 nominations (23 per cent) were supported by complete mandatory documentation.

• Recognised entities — All nominations were provided in writing, however six of the nine examined nominations were incomplete. None of the six incomplete nominations had a copy of the resolution of the recognised entity’s governing body and three nominations were not signed or witnessed correctly.
• Communities without a recognised entity — All four community nominations examined had a nomination in writing, however none had an NLC report about the nomination meeting as required by the method of choice.

3.20 The NLC tracked the 2022 nominations in a spreadsheet, which was not complete as at April 2023. Information in the spreadsheet for 29 of the 74 (39 per cent) nominated member positions did not include the name of the nominee as published on the NLC website. The lack of mandatory documentation and appropriate records to support a nomination means that the NLC is unable to provide assurance that the Council was validly constituted.

Election of the Chair and Deputy Chair

3.23 The Handbook sets out that at the first sitting of a new full Council, members elect a Chair and a Deputy Chair. The newly formed Council met on 6–9 December 2022 and elected the Chair and Deputy Chair in accordance with the required process. The NLC engaged the NT Electoral Commission to oversee the election process.

Remuneration of Council Chair and members

3.24 The remuneration of Council members is determined by the Remuneration Tribunal.³⁴ 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 Council.³⁵ The Handbook specifies that Council members who are also employed elsewhere must apply to their employer for leave without pay when attending Council meetings.

3.25 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. In July 2022 the NLC Chair declared, in addition to his full-time paid position as the Chair of the Council, one paid and 11 unpaid part-time positions on other entities’ boards. In July 2023 the NLC Chair declared one paid and two unpaid part-time positions. It is not clear to the ANAO that the Chair holding a paid position in another organisation is consistent with the Remuneration Tribunal Act 1973. The ANAO did not examine whether the Chair’s performance of duties for other entities impacts on his capacity to complete his duties for the Council as a full-time remunerated public office holder.

Guidance and training for Council members

3.26 The NLC has developed guidance to assist new Council, Executive Council and regional Council members in their role. The Handbook includes information about the NLC’s: vision; governing legislation (including the ALRA, NTA and Public Governance, Performance and Accountability Act 2013 – PGPA Act); separation of ‘roles and powers’ between the Council and NLC staff; reporting; delegations; and policies and rules.

3.27 In February 2021 the NLC Executive Council participated in a three-day course on governance and leadership. During the first meeting of the new full Council in December 2022, members attended a governance induction on the NLC’s functions and powers, delegations, roles of members, meeting rules, and key NLC policies such as the Conflict of Interest Policy. The NLC does not provide Council members with ongoing governance training.

Establishing and implementing meeting and committee rules

Establishment of committees

3.29 The NLC has established two types of committees in accordance with the ALRA (section 29A — see Appendix 6): the Executive Council and the regional Councils. The purpose and functions of the two types of committees are described in the Handbook.

Establishment of Council and committee meeting rules

3.30 The NLC has complied with the requirements of the ALRA in relation to the establishment of meeting rules for the full Council, Executive Council and regional Councils (see Appendix 6). The meeting rules, which were approved by the Minister in 2017, are contained within the Handbook.

3.31 The ALRA requires that Council and committee meeting rules and minutes are made available to Traditional Owners and any Aboriginal people living in the area of the Land Council. In April 2023 the NLC updated its website to explain how to arrange an inspection of the meeting rules and minutes. As the NLC does not maintain a register of requests, the NLC was not able to confirm whether any requests for access have been made and if meetings rules and minutes were provided as required under the ALRA.

Implementation of meeting rules

3.32 The implementation of meeting rules during 2021–22 was largely appropriate.

• Meeting frequency and quorum — The full Council, Executive Council and three of seven regional Councils did not always meet as frequently as specified in the meeting rules.³⁶ Seventeen of the 22 Council and committee meetings required by the meeting rules were held. Quorum was met for all meetings.
• Briefings for meetings — Members are to be briefed prior to making decisions and meeting papers are to be distributed prior to the meeting. Detailed papers were distributed for the 2021–22 full Council and Executive Council meetings. The ANAO observed an Executive Council and regional Council meeting in September 2022 where information was presented on a large screen and printed copies of information packs (containing agenda papers, the Handbook, delegations and key policies) were provided to members. NLC staff gave presentations and answered questions.
• Decision-making at meetings — The meeting rules specify that matters that are passed need to be motioned and seconded, and the majority of members must indicate they are in favour.³⁷ Meeting minutes show that motions were moved, seconded and carried.
• Implementation of decisions — The meeting rules set out that NLC staff will implement decisions, monitor progress and report back to the Council. Lists of agreed actions to be completed were compiled for two of 17 meetings. In January 2023 the NLC advised the ANAO that it would implement action lists in 2023. As at July 2023 these had not yet been implemented in the nine meetings that had been held since January 2023.
• Record of meetings — Meeting minutes including a record of Council member attendance were prepared for all meetings in 2021–22. For Traditional Owners’ and other Aboriginal people’s access to meeting minutes to be meaningful, the minutes could be clearer and provide more information than just a summary of decisions. While meeting minutes of the full, Executive and regional Councils documented key decisions and questions that led to an action item, 2021–22 meeting minutes often did not include other discussions points, such as concerns raised and options discussed. Executive and regional Council minutes included some questions and concerns.

3.33 The full Council fulfills its role by delegation of substantial functions to the Executive Council (see Chapter 2). In 2021–22 the Executive Council made significant decisions in relation to land use agreements and claims, policy determinations, appointments, remuneration and other financial decisions. However, the Executive Council’s reporting of decisions to the full Council and regional Councils was limited. The meeting minutes for a three-day full Council meeting in 2021–22 did not include reporting from the Executive Council. For nine of the 11 regional Council meetings that occurred during 2021–22, Executive Council reporting was mainly focused on land use agreement decisions, with little reference to other types of decisions. Given the substantive nature of decisions being made by the Executive Council, the scope of its reporting is not fully consistent with providing transparency to regional Councils, or with the accountability for decisions that is retained by the full Council.

Compiling and maintaining registers

3.36 The NLC complies with the ALRA in maintaining a record of Council and Land Trust members (see Appendix 6). The NLC does not maintain a register of Traditional Owners³⁸, which is consistent with the non-mandatory nature of the ALRA (section 24), although it keeps ‘informal and noncomprehensive records’ of names and contact details (see paragraph 3.74).

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

3.37 The ANAO examined NLC’s processes in relation to section 19 (s19) agreements, Part IV agreements, permits and native title agreements. 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 (see Table 1.1).

Procedures for Section 19 and Part IV agreements

3.38 A paper presented at an August 2019 Executive Council meeting stated that a key focus was ensuring that parties who occupy or use Aboriginal Land enter into suitable land use agreements, and that the majority of lots on Aboriginal land in the NLC region were held under formal agreements. Between 2018 and 2022, the number of land use agreements significantly increased. As at December 2022 the NLC was administering 828 s19 agreements and 48 Part IV agreements. There were also 794 proposed s19 agreements awaiting NLC’s assessment as at December 2022 and 258 proposed Part IV agreements awaiting NLC’s assessment as at April 2023.

3.39 As at April 2023 the NLC had draft processes and guidance for establishing s19 agreements and Part IV agreements.

Procedures for land access permits

3.40 Under the 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.³⁹ Several categories of permit exist in the NLC including work, tourism, transit, mining, and residential. In 2021–22 the NLC issued 19,448 permits, 54 per cent of which were work permits and 20 per cent were tourism permits.⁴⁰ As at April 2023 there were 70 permit requests being assessed by the NLC.

3.41 The NLC uses a permit administration IT system to assess, provide and monitor permit applications. There are clear guidelines on how to use the system. The approval of some of the permits is by ‘permit advisers’, who are Traditional Owners representing the views of affected groups. In 2020 the NLC engaged 197 permit advisers across four NLC regions.

3.42 The NLC has a Permit Policy (September 2020), draft procedures for permit compliance and investigation, and a banned visitor register. While the Permit Policy states that the banned visitor register is to be reviewed annually, the NLC advised that reviews are conducted on an ‘as needed’ basis and not formally recorded. The NLC employs Caring for Country⁴¹ rangers to conduct permit compliance activities, and has developed a draft Caring for Country Rangers Compliance Policy. As at April 2023 the NLC had seven compliance officers and employed a Senior Project Coordinator whose role covered permit compliance and investigation.

Procedures for Native title agreements

3.43 As part of its functions prescribed under the NTA, the NLC represents native title claimants to make applications to the Federal Court for determinations of native title (see paragraph 1.13). As at April 2023 a search of the National Native Title Register for the NLC region returned 87 determinations for native title.

3.44 When a native title interest has been registered with the National Native Title Tribunal, the NLC is responsible for assisting native title holders in response to ‘future acts’⁴², and for supporting the negotiation of agreements made under the NTA. As at April 2023 the NLC reported that there were 61 agreements made under the NTA and 30 new agreements under negotiation.

3.45 The NLC has established a prescribed body corporate (PBC — see paragraph 1.13), the Top End Default PBC. The Top End Default PBC performs the administrative functions required under the NTA at no charge to, and with the intent of eliminating the administrative burden for, native title holders. As at November 2022 the Top End Default PBC was the PBC for all except one⁴³ determination of native title in the NLC region.

3.46 The NLC had policies and procedures for most of its native title functions, however most were undated and had not been endorsed by senior management or finalised as at April 2023 (see Appendix 7).

3.47 Under the NTA⁴⁴, the NLC is to provide and publicise a process by which a PBC or a person with native title interests can request a review of the NLC’s decisions as a Native Title Representative Body (NTRB). The NLC developed an approved policy covering this matter in April 2023. However, the NLC did not publicise its process for review of native title decisions. The NTA requires the NLC to promote understanding about native title matters.⁴⁵ In 2021 the NLC reported that it would develop, translate and promote native title information materials.⁴⁶ As at April 2023 the NLC had not done this.

3.49 Under the NTA (section 203DF) the Minister may appoint a person to investigate a NTRB’s performance of its functions and exercise of its powers. In 2020 the National Indigenous Australians Agency commissioned the Nous Group to undertake a review of the performance of NLC’s functions as a NTRB between 1 July 2016 and 30 June 2019.⁴⁷ Nous Group findings included:

• overall the NLC had been able to achieve native title outcomes for its clients;
• the NLC had adopted an assessment and prioritisation approach which focused on strategically important claims, but had not documented or communicated to staff and clients its prioritisation policy;
• although the NLC generally engaged respectfully and professionally with clients, some improvements could be made to the NLC’s conduct of meetings and communication of outcomes;
• the NLC reported on progress against agreed milestones, though some reports were delivered late, and native title performance could be better monitored;
• governance structures and organisational policies and practices broadly supported efficient and effective project delivery, with some areas for improvement (clarifying responsibilities, ensuring clients understand how to make a complaint, and finalising key organisational policies);
• having the Top End Default PBC as the default PBC had not promoted native title holders’ self-sufficiency; and
• no formal strategy was in place for the NLC’s role in a post-determination environment.

3.50 The January 2021 report made 17 recommendations to which the NLC responded, indicating its planned implementation approach. As at April 2023 the NLC provided evidence to the ANAO that it had implemented four and partly implemented ten recommendations.

Monitoring land use agreements

3.51 The NLC has a policy for debt recovery (June 2022), a draft policy for managing agreements under the ALRA and NTA (including an audit procedure dated August 2021), and a draft checklist for administering Part IV agreements (undated). In 2018 the NLC created a contract administrator position whose role included auditing compliance with land use agreements. Desktop review and audit activities conducted between 2019 and 2021 identified compliance issues (including outstanding rental payments and outdated or incorrect insurance). These activities also identified some limitations with NLC systems and procedures to manage compliance (including in relation to the maintenance of the NLC contract management system, record keeping practices of NLC staff and regularity of site inspections).

3.52 An August 2019 Executive Council meeting paper stated that the NLC was not well equipped to monitor compliance with the growing number of agreements and that compliance issues were reported in an unsystematic manner by NLC staff, Traditional Owners and community members. The NLC estimated that it would take 96 weeks to conduct site inspection audits for all pastoral lease agreements alone. As at April 2023 the NLC did not have a risk-based strategy for prioritising monitoring activities, including compliance audits.

Prioritisation and timeliness of land use agreement decisions

3.55 The ALRA and the NTA prescribe that Land Councils must determine the priorities they will give to performing their functions⁴⁸; and state that Land Councils must use their best efforts to perform their functions in a timely manner, particularly in relation to any legislated time limits.⁴⁹

3.56 The NLC’s website and internal documentation state that the NLC prioritises the assessment of land use agreement proposals on the basis of, among other factors: legislative timeframes; court scheduled dates; major and priority projects; government leasing; activities that have been in the queue for a lengthy period; reputational risk; highest value and benefit to Traditional Owners and community; key community assets, such as shops; and projects that have critical dates for government funding.

3.57 As at April 2023, the NLC’s website provided information on the range of factors impacting on the time that it takes to process a s19 agreement, including the number of existing proposals, NLC resource availability, Traditional Owners’ availability, the number of Aboriginal groups or communities affected by the proposal, the complexity of the proposal, and the impact of COVID-19 access restrictions on consultation meetings. Due to these factors, the website advised that simple proposals usually took five to six months to finalise, and complex proposals 12 months or longer, and invited applicants to contact the NLC for an update on their s19 proposal.⁵⁰ For permit applications, the website advised that at least 10 days could be required to consult with Traditional Owners, and complex permit applications could require more extensive consultation and more time.⁵¹ Internal NLC reporting shows that in 2021–22, 85 per cent of permits were issued within 10 days.

3.58 The NLC 2021–22 Annual Performance Statements state that NLC values include to be responsive, to complete actions and tasks in a timely way and to be accountable to the people it represents.⁵² None of the Annual Performance Statements measures relate to timeliness, and the Annual Report does not include information on the time taken to complete actions and tasks, including land use agreements and permits. There are also no internal measures relating to timeliness, and there is no reporting to the Council on timeliness.

Assisting with commercial and other activities

3.60 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. The NLC’s main mechanisms to provide assistance with commercial and other activities are delivered through: support provided to Aboriginal people in applying for Aboriginals Benefit Account (ABA) grants; the administration of the NT Indigenous Economic Stimulus Package; and the Community Planning and Development Program.

Aboriginals Benefits Account grants support

3.61 As at January 2023 the NLC had two grant assistance officers. Between October 2021 and June 2022, it provided assistance to 41 people and Aboriginal organisations applying for ABA grants, including through the review of six applications, and providing general information on funding opportunities and how to draft applications.

Northern Territory Indigenous Economic Stimulus Package

3.62 The NLC reported in its 2021–22 Annual Report that it had distributed $20.7 million (of $36.7 million) of NT Indigenous Economic Stimulus Package funding to Aboriginal entities and communities (see paragraph 1.27), with $16 million to be expended in 2022–23.

3.63 As at 30 September 2022 the NLC had received 187 applications over two funding rounds. The NLC had different arrangements for the assessment of applications across the two rounds. For all 73 applications in the first round and for 14 of 114 second round applications, an NLC staff member was the sole assessor. For the remaining 100 second round applications, applications were first individually assessed by three senior NLC managers, then moderated by the three managers as a panel, and finally reviewed by a fourth senior manager. Criteria were provided to applicants and advertised by the NLC for both rounds.

3.64 The ANAO examined a targeted selection⁵³ of 95 completed application forms and the documentation supporting their assessment by the NLC.⁵⁴

• Information that was provided to applicants and the public was appropriate.
• For 10 community applications, the NLC advised the ANAO that funding was not provided directly to the applicants, but rather that ‘to ensure these funds were available to all, and to mitigate the risks’, the NLC facilitated and managed the related community projects. This meant that ‘the NLC obtained quotes and paid all associated expenses’ directly to suppliers. Assessment documentation recorded that an assessment was made against one of five assessment criteria.⁵⁵ The NLC advised the ANAO that this was because its management of project delivery ‘would ensure that the requirements of value for money, capacity [to] deliver, whole of life costs and measure outcomes of the projects were achieved.’
• Table 3.1 shows the quality of assessment documentation for the remaining 85 applications. The program guidelines for the two rounds stated that ‘all assessment criteria are given equal weighting.’ For 71 of the 85 applications (84 per cent), assessments were documented, and the assessment documentation recorded assessment notes against the funding priorities and all five assessment criteria. For the remaining 14 applications (16 per cent), assessments were either not documented (4), or available assessment documentation did not record a clear and explicit assessment against all five criteria (10).

Table 3.1: Documented assessments of applications for COVID-19 stimulus funding, as at September 2022

Note a: The assessment was made against one of the five assessment criteria (investment principles). There was no substantive commentary provided against the four other assessment criteria (value for money, capacity to deliver, whole of life costs, and measurables benefits).

Note b: For two of the four applications, assessment documentation noted that not enough information was provided to the NLC and therefore conditional approval would be provided.

Note c: The assessment documentation noted that not enough information was provided to the NLC. The documentation recorded a recommendation to approve $250,000 subject to submission of two quotations or justification for one quotation. The NLC later advised the ANAO that this project was not funded.

Source: ANAO analysis of NLC documentation.

Community Planning and Development Program

3.65 The Community Planning and Development Program (the Development Program) was established in 2016. The Development Program’s Framework (2022–2026) states that its goal is to ‘work alongside Aboriginal groups in building their governance and planning capacity to effectively control their own interests and build healthy and resilient communities for future generations.’

3.66 A November 2021 La Trobe University monitoring report states that between 2016 and June 2021, the Development Program worked with 18 Traditional Owner groups and committed approximately $8.6 million towards community benefit. The 2021–22 NLC Annual Report states that 60 projects were completed or underway as at 30 June 2022.

3.67 The operation of the Development Program is supported by a range of policy documents. In 2018 the NLC also developed a monitoring and evaluation framework for the Development Program, which was updated in 2022. As at February 2023 six monitoring reports covering the period 2016 to 2022 were produced by La Trobe University and Charles Darwin University. The January 2020 to June 2021 La Trobe University monitoring report (November 2021) concluded that the Development Program had increased capacity to support Aboriginal governance, however recommended that the NLC:

• promote a more strategic and consistent approach to increase Aboriginal-led social, cultural and economic development;
• increase resourcing for the Development Program;
• improve tools to enable more informed planning and decision-making by Aboriginal participants; and
• continue to develop program monitoring and evaluation.

3.68 The 2021–22 Charles Darwin University monitoring report (February 2023) documents the NLC’s acceptance of the 2021–22 recommendations and the actions taken against the recommendations.

Assisting with the protection of sacred sites

3.69 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.

3.70 The NLC Anthropology Branch is responsible for maintaining information on sacred sites and other NLC staff are able to request this information to inform agreement negotiations. The NLC also assists with the protection of sacred sites through:

• entering into memoranda of understanding with the Aboriginal Areas Protection Authority (AAPA) regarding major projects;
• assisting AAPA in investigations and prosecutions of offences for sacred site damage;
• requiring an applicant to enter into an agreement with the custodians of sacred sites before consent is given to AAPA for the issuance of a sacred sites authority certificate; and
• appealing to the National Native Title Tribunal where the NT government has not required a sacred site certificate be obtained before issuing a mineral exploration license.

3.71 NLC land use agreements require compliance with the Northern Territory Aboriginal Sacred Sites Act 1989 (NT), including that the applicant obtain an AAPA Authority Certificate⁵⁶ prior to undertaking any construction, demolition or other works on the land. The land use agreements also provide for compensation to the NLC where the applicant enters, damages or interferes with a sacred site. NLC documentation indicates that it has successfully negotiated out of court compensation payments.

Consulting and obtaining consent

3.72 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

3.73 The NTA describes NTRB functions in relation to assistance to Indigenous people for: native title applications; future acts; native title agreements; 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.

3.74 Table 3.2 shows the number of consultations with Traditional Owners and affected Aboriginal groups conducted by the NLC between 2016–17 and 2021–22.

Table 3.2: Northern Land Council community consultations, 2016–17 to 2021–22

Note a: In 2019–20, the NLC internally reported that it cancelled or postponed 145 consultations due to COVID-19 restrictions.

Source: NLC documentation.

3.75 The NLC’s Land and Law Division (which comprises Legal Services, the Anthropology Branch, the Resources and Energy Branch, and Community Planning and Development Branch) is primarily involved in the identification of and consultation with Traditional Owners and affected Aboriginal groups. The resourcing and processes established by the NLC to consult with Aboriginal people and obtain consent from Traditional Owners are largely fit for purpose and allow the NLC to meet the dual requirements of the ALRA and NTA.

• The Anthropology Branch’s key functions are to conduct research for the identification of Traditional Owners, participate in consultations, and identify and assist in the protection of sacred sites.
• The identification of Traditional Owners is through a database, the Land Interest Reference (which contains the records of Aboriginal land ownership, social and cultural organisation, kinship systems and genealogical relations in the NLC region, accumulated over 70 years, and updated with new information by the anthropologists). Maps are produced for land claims, native title claims, permits and site surveys.
• A draft Anthropology Branch Methodology Guide (March 2021) and a draft Anthropology Branch Manual (March 2023) do not include clear procedures for quality assurance or peer review of anthropology work. However, the NLC advised that its anthropological work is quality assured through peer review by experienced anthropologists, and provided examples (dated between September 2019 and March 2022) of internal and external reviews undertaken over anthropological work for six native title claims.
• Consultation and consent meetings are organised by the Regional Development Division.
• The conduct of consultation meetings is supported by procedures and policies. A Guide to Running Meetings (October 2020) covers the role and required qualities of the meeting facilitator, guidance for planning consultations and running meetings, and resources and tools. The Guide to Running Meetings includes procedures to ensure that Traditional Owners and affected Aboriginal people are supported to understand the nature of the consultation, including through using plain English, visual aids, interpreters and translations.

3.76 The ANAO observed two day-long consultations in September 2022 which were held for the purpose of making a decision on a proposed native title agreement (regarding mining exploration), and to discuss the management of a national park. The meetings were conducted in a manner that was aligned with the NLC policies and procedures.

• Once relevant participants had been identified, individual notifications were sent two weeks ahead of the meeting. When necessary, an NLC employee hand-delivered the notifications, including to remote locations.
• On the day of the meeting, when necessary, an NLC employee collected each participant from their place of residence, drove them to the meeting place and back to their residence at the end of the meeting.
• A record of attendance was taken at the meeting, and NLC staff sought confirmation from participants that the relevant people who could, under traditional custom, make decisions for that Country, were present. An NLC officer later visited one person who was unable to be present.
• During the meeting, written information was available, and there were presentations on screen and maps. An NLC lawyer, anthropologist, and several other NLC officers answered questions.
• In the case of the mining exploration meeting, a representative from the mining company explained the proposal and left the room to let participants deliberate. The protection of sacred areas located in the proposed exploration area was discussed.
• Meeting minutes were retained.

3.77 The NLC’s Legal Branch Practice Manual (May 2020) states that to seek approval from the full Council, Executive Council, regional Councils or Chief Executive Officer (CEO) in relation to the performance of a legislative function or power, an agenda paper must be drafted and presented at the relevant meeting, or a memorandum to the CEO must be prepared. The agenda papers and memoranda to the CEO must include information about consultations. All 2021–22 agenda papers presented to the Council for a decision in relation to s19 agreements included information about consultations on the matter.

3.78 The NLC advised the ANAO that members of an Aboriginal group can view land use agreement documentation on a ‘case-by-case’ basis having regard to legal considerations. Aboriginal people can apply for access to genealogical information about their immediate family. The ANAO did not examine whether applications for access were made and granted. A recurrent theme of ANAO consultations was a lack of awareness of the possibility for Aboriginal people to access their genealogical information, combined with questions in relation to NLC processes to establish genealogies and determine Traditional Owner status.

Disputes and complaints

3.82 The ALRA establishes a duty of Land Councils to attempt conciliation of disputes with respect to land in the area of the Council.⁵⁹ 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.⁶⁰ 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.

Dispute resolution

3.83 The Legal Branch Practice Manual (May 2020) and draft Anthropology Branch Manual address conflict and dispute resolution, and note that land-related disputes are common. The Legal Branch Practice Manual identifies the importance of a dispute management policy, however there is no policy. The draft Anthropology Branch Manual identified the importance of developing dispute conciliation procedures and a dispute resolution framework, however there are no procedures or framework.

3.84 The NLC risk register includes a risk, added in January 2018 and last updated in August 2022: ‘the lack of resources, skills and will to facilitate external dispute resolution’. The ‘very high’ inherent risk is reduced to ‘low’ after mitigations, which are to: request additional ABA funding for dispute conciliation; hold dispute reconciliation meetings to strengthen relationships; and senior anthropologists develop dispute resolution skills. The February 2023 risk register recorded that mitigations for the risk related to dispute resolution were 25 per cent implemented.

3.86 The Legal Branch Practice Manual states that dispute management training is offered on an annual basis. Between July 2020 and November 2022, 36 staff members participated in three dispute resolution related training courses. In February 2022 NLC anthropologists attended a two-day workshop on managing disputes under the ALRA and NTA.

Complaints handling

3.87 Auditor-General Report No. 55 2016–17 Effectiveness of the Governance of the Northern Land Council⁶¹ suggested that the NLC improve its handling of complaints by providing training, making staff aware of how to respond to a complaint, and considering how complaints are reported to the Audit Committee.

3.88 The ANAO assessed the NLC’s complaints handling system against the eight design principles outlined in the Better Practice Complaint Handling Guide, which showed that the NLC had partly addressed the ANAO 2016–17 suggestion: there is a complaints lodging process and policy, however training has not been provided to relevant staff; and although the regional Councils have received updates on complaints, the Audit Committee has not.

Distributing royalties and other payments

3.90 The NLC established the Royalty Trust Account to hold monies received from land use agreements under the ALRA and the NTA. Between 2017–18 and 2021–22, total annual receipts ranged from $58.4 million to $68.4 million (see Figure 3.1). Payments under the ALRA typically represent approximately 90 per cent of total receipts and payments under the NTA typically represent approximately 10 per cent.

Figure 3.1: Royalty Trust Account receipts, 2017–18 to 2021–22

Note: In 2020–21 the NLC reported that in 2019–20 monies from two contracts were misclassified. In 2019–20 a contract for $14.7 million was incorrectly classified as monies from a Part IV agreement and was later reclassified as section 19 agreement monies. The second contract, worth $2.1 million, initially classified as monies from a section 19 agreement was reclassified as native title agreement monies.

Source: ANAO analysis of NLC annual reports.

3.91 Figure 3.2 describes how land use agreement monies received in 2021–22 by the NLC were distributed. The ANAO examined the distribution of payments from royalty equivalents, Part IV agreements, s19 agreements and native title agreements.

Figure 3.2: Distribution of royalties and other payments, 2021–22^a

Note a: Payments received are sometimes different from payments distributed as payments received in one financial year may have been distributed in the following financial year.

Note b: Gumaji AC — Gumaji Aboriginal Corporation. RAC — Rirratjingu Aboriginal Corporation. LHAC — Laynhapuy Homelands Aboriginal Corporation. GAC — Gundjeihmi Aboriginal Corporation.

Note c: Other accounts include monies for Community Planning and Development Projects managed by the NLC (see paragraphs 3.65 to 3.68), as well as monies set aside for future needs identified by Traditional Owners, such as funerals and ceremonies.

Source: ANAO analysis of NLC documentation.

3.92 The NLC has a Payment Arrangements Policy (November 2018) for monies received under the ALRA, which states that:

• for Part IV agreement monies, distribution arrangements should be stipulated in the payment clauses of relevant agreements; and
• for section 19 agreements, as far as practicable, distribution arrangements should be made at the time that Traditional Owners consent to a new agreement under which monies will be payable.

3.93 For all agreement types covered by the Payments Arrangements Policy, when not stipulated in agreements, distributions to beneficiaries are to be made according to instructions that are agreed to by beneficiary groups at specially convened meetings.

3.94 The Payment Arrangements Policy does not cover several types of payments.

• The Payments Arrangements Policy does not address royalty equivalent payments. Instead, the NLC full Council passes resolutions to apportion the royalty equivalent monies received from mining projects⁶² to specified Aboriginal corporations (see Figure 3.2).
• The Payment Arrangements Policy does not apply to monies received for distribution by the NLC or the Top End Default PBC⁶³ under the NTA and the NLC does not have clear procedures for distributing payments made under the NTA. The NLC advised the ANAO that to the extent possible, the NLC follows the Payment Arrangement Policy for NTA payments.

3.96 The NLC has draft approval procedures describing multiple checks that are to be conducted by staff across different areas of the NLC to ensure that the correct payments are made to the correct beneficiary accounts. A royalty disbursement application is automatically sent to the Anthropology Branch manager for approval.

3.98 The Payment Arrangements Policy states that the NLC will need to be satisfied that the payments are for the benefit of the Traditional Owners. The NLC checks the financial viability and governance arrangements of recipient Aboriginal corporations to support the apportionment of royalty equivalents. This check includes referring to information maintained by the Office of the Registrar of Indigenous Corporations for compliance with the Corporations (Aboriginal and Torres Strait Islander) Act 2006 before making a payment.

3.99 Under the ALRA, Aboriginal corporations must provide their financial statements to the Land Council, as well as a report on the use of royalty equivalents received from the Land Councils. The NLC advises the full Council that it checks these reports prior to the full Council passing a resolution to apportion additional royalty equivalents to the Aboriginal corporation.

3.100 Between 2017–18 and 2021–22, the proportion of payments received from s19 agreements increased, while the proportion of payments received from Part IV agreements decreased (see Figure 3.1). In response to the increase in monies from s19 agreements, the NLC established a 15-person Benefits Distribution Unit in December 2021, which has primary responsibility for consulting Traditional Owners about distributions. The NLC 2021–22 Annual Report indicated that the Benefits Distribution Unit aims to ‘develop new ways to ascertain the interest of Traditional Owners’, including through annual meetings to seek approval of a forward annual budget encompassing all expected sources of income. The intent of the annual meetings is to improve the Traditional Owners’ ability to plan for their future.⁶⁴

3.101 Payments under the ALRA must be made within six months of their receipt by the Land Council, unless the Land Council has received written instruction from the Traditional Owners prior to distribution. The ANAO financial statements audit for 2021–22 continued to identify breaches of this requirement, which have been unresolved since they were first raised in 2012–13.⁶⁵ In 2021–22, the ANAO financial statements audit found that the distribution of monies to Traditional Owners was not made within six months for 16 of the 25 (64 per cent) land use and access agreements tested. The NLC advised the ANAO that the Benefits Distribution Unit had begun consulting with Traditional Owner groups from September 2021 to determine how to distribute funds held for longer than six months, or to seek written approvals from these groups to hold monies for longer than six months. The NLC also improved its ICT system in order to distinguish aged funds that ought to have been distributed within six months, from aged funds held by request. The NLC stated that these strategies contributed to increasing the timeliness with which negotiated monies and rents and leases were distributed in 2021–22 compared with the previous financial year.

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 a performance statements; and an audit committee are key mechanisms under the PGPA Act to implement this duty.⁶⁶

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. As a corporate Commonwealth entity, the NLC is not required to comply with the Commonwealth Risk Management Policy, however the Policy states that corporate Commonwealth entities ‘should align their risk management frameworks and systems with this policy as a matter of good practice’.⁶⁷

Risk management framework and risk appetite

4.3 In April 2022 the NLC drafted a new risk management framework to replace its 2017 Risk Management Framework and Policy, and advised the ANAO that staff are required to follow the redrafted risk management framework. The draft 2022 Enterprise Risk Management Framework states that its purpose is to assist the NLC to identify, assess, manage, and monitor existing and potential risks as and when they arise. It includes the NLC’s risk governance arrangements, responsibilities for managing and reporting risks, requirements for the quarterly review of operational and strategic risks, and requirements for reporting risks to the full and Executive Councils. The draft Enterprise Risk Management Framework includes the NLC’s risk appetite statement, which states that the NLC’s appetite towards accepting risk (which is either ‘no’, ‘limited’ or ‘have’) is dependent on the nature of 10 activity categories and the degree of risk and potential rewards.⁶⁸

Risk assessment

4.4 The NLC’s draft Enterprise Risk Management Framework includes the required processes for identifying and assessing risks, controlling and treating identified risks, and quarterly monitoring and reviewing of risks. In November 2022 the NLC implemented an online risk tool and developed guidance to assist staff to identify new risks, view and modify existing risks, access risk management training materials, develop risk visualisations and extract risk data (in the form of risk registers). The NLC maintains one consolidated risk register that covers multiple areas of the organisation. The ANAO reviewed three versions of the risk register (March 2022, August 2022 and February 2023) for completeness, accuracy and consistency with requirements established in the draft Enterprise Risk Management Framework. The NLC’s risk registers were compliant with the framework except that they did not articulate whether assessed risks exceeded the risk appetite; and the risk registers did not always record information to demonstrate that risks had been reviewed in each quarter.

4.5 Risk management training is not mandatory. Between November 2020 and November 2022, 26 NLC employees (or approximately seven per cent of permanent staff) completed risk management training; and 41 (12 per cent) completed training on workplace health and safety risks. In July 2022, 64 employees (18 per cent) completed ‘NLC Governance 101’ training, which included a high-level introduction to the draft Enterprise Risk Management Framework.

Risk reporting

4.6 The NLC’s 2017 Risk Management Framework and Policy states that the Executive Council is responsible for reviewing and supporting the overall risk management practices. The 2022 draft Enterprise Risk Management Framework states that strategic risks are to be reported to the Council and a strategic risk report is to be provided to the Executive Council each quarter. Strategic risks are defined as ‘Risks that may prevent the NLC from achieving its corporate objectives.’

4.7 The NLC develops risk snapshots based on the risk register. The ANAO reviewed risk snapshots from May 2021, February 2022 and August 2022. The risk snapshots provide high-level quantitative information on risks, such as the number of risks and the change in the number of risks since the last snapshot. The snapshots do not draw attention to strategic risks, or provide information on the implementation of mitigation plans and on the effectiveness of controls in mitigating NLC’s risks.

4.8 In 2021–22 the Audit Committee received a risk snapshot at two of its four meetings. ANAO analysis of minutes for Council meetings in 2021–22 found that there was limited risk reporting. The full Council met once in July 2021. During this meeting it received a report from the Audit Committee, which included one sentence on risk that asserted that there were improvements in risk management maturity and to the frequency of risk reviews. There is no evidence that the Executive Council, which met five times in 2021–22, received strategic risk reporting.

Policy framework

Establishment of corporate policies

4.12 Policies and procedures are an important part of an entity’s system of internal controls. As at April 2023 the NLC had 51 corporate policies and procedures⁶⁹, which cover most key resource management areas.

4.13 The NLC’s draft Governance Framework states that the Governance, Compliance and Risk Unit is responsible for assisting the Chief Executive Officer (CEO) in establishing a governance framework through maintaining a set of approved policies and procedures. The NLC has a Policy Framework and Policy Management Process Guide which provides guidance on developing, maintaining and reviewing corporate policies, procedures and other documents.

4.14 The Policy Framework states that policies should be approved by the CEO who has the discretion to progress to the Executive or full Council for approval where it has significant impact on elected members or Traditional Owners. As at April 2023, of the 51 NLC policies and procedures, 45 were approved by the CEO and six were either in draft form (not approved) or not approved by the CEO.

4.15 NLC’s corporate policies rely on supporting procedures and other documents for the operationalisation of the principles outlined in the policies. Details are often not provided in the procedures and other documents referenced in the policies, which instead direct the reader back to the policy in a circular manner. Some documents referenced in the policies could not be provided by the NLC when requested by the ANAO.

4.16 Table 4.1 provides an overview of ANAO’s assessment of NLC’s key governance policies, focusing on whether the policies are sufficiently detailed and clear and are consistent with the PGPA Act’s requirement for proper use and management of resources.

Table 4.1: Selected key governance policies^a

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

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

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

Source: ANAO analysis.

4.17 Two of the nine examined policies were not clear and detailed, and one was not aligned with relevant PGPA Act requirements. Exceptions are described below.

• Gifts and Benefits Policy — According to the Gifts and Benefits Policy, the gift register undergoes a biennial review and is physically located at the NLC’s Darwin office. All gifts and benefits are to be reported to a supervisor and recorded in the gift register. It is not clear from the Policy how staff located in the NLC’s 11 regional offices will record information in a physical register located in Darwin. As at April 2023 the register (which was established in 2017) included five entries recorded between January 2020 and April 2023.
• Recruitment and Selection Policy — The Recruitment and Selection Policy commits to ensuring fair, equitable and legally satisfactory recruitment of NLC employees. The General Manager of People Services can override merit-based processes through direct appointments, including but not limited to cases where a short-term vacancy (defined as less than six months) exists and where cultural knowledge and Traditional Owner endorsement is deemed to be required. NLC employees with a conflict of interest are also not prohibited from participating in recruitment. Classification levels were not always clearly defined in the Policy. The ANAO did not assess how recruitment processes occurred.

4.18 Eleven of the 45 corporate policies and procedures that were approved by the CEO were not reviewed within the required time periods. The length of the overdue period varied, ranging from four to five years.

Operationalisation and communication of corporate policies

4.19 Corporate policies and procedures are available to staff via the NLC intranet. Since 1 July 2020 training has been conducted for 14 out of 51 corporate policies and procedures. Training on the Conflict of Interest, Records Management and Social Media policies is to be provided during staff induction.

4.20 Training on the Conflict of Interest Policy (see paragraph 4.29) is mandatory for all staff. Of 347 permanent staff, 171 (49 per cent) completed a training module on the Conflict of Interest Policy in 2022. As the requirement to undertake Conflict of Interest Policy training is not annual, it is unclear whether this represents a satisfactory participation rate.

4.21 Training on the Code of Conduct is also mandatory for all staff. The NLC advised the ANAO that in 2022 staff were required to attend one face to face training session on the Code of Conduct. NLC training records show that of 347 permanent staff:

• 114 (33 per cent) completed training on the Code of Conduct in 2021; and
• 103 (30 per cent) completed training on the Code of Conduct in 2022.

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

Fraud control

4.23 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 Framework⁷⁰, which consists of three tiered documents — the fraud rule, fraud policy and fraud guidance. As a corporate Commonwealth entity, the NLC 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.’⁷¹

4.24 The NLC’s fraud control arrangements fall short of the minimum requirements established in the fraud rule. The NLC has developed a Fraud and Corruption Policy and a Fraud and Corruption Control Plan and conducted training. The Fraud and Corruption Policy is not clearly tied to identified fraud risks and fraud risks are not assessed as frequently as specified in the Policy. There is no confidential reporting channel and no mechanism to record and report incidents of fraud or suspected fraud. The definition of corruption in the Fraud and Corruption Policy could be better aligned with section 8 of the National Anti-Corruption Commission Act 2022 (see Appendix 8).

Conflicts of interest management

4.28 The Australian Commission for Law Enforcement Integrity’s guide on conflicts 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.⁷²

Conflict management policy

4.29 The NLC established a Conflict of Interest Policy in 2018, which it reviewed in 2021. While the Conflict of Interest Policy states that it applies to Council members and staff (employees, volunteers and contractors), the processes described are mostly specific to staff. The Code of Conduct addresses expectations for Council members and staff in relation to managing conflicts of interest.

4.30 The Conflict of Interest Policy clearly defines what constitutes a conflict of interest and includes examples of activities (including outside employment) that could give rise to a conflict. Individuals are required to declare conflicts either verbally or in writing. The General Manager of Corporate Services is to determine the most appropriate management action, which could range from simply recording the conflict to relinquishing the factors giving rise to the conflict or NLC employment.

Conflict of interest management

Key management personnel

4.31 The NLC’s key management personnel⁷³ sign an annual declaration listing the positions held on boards of any other entities. The ANAO examined declarations by the NLC Chair and CEO. The Chair declared 12 positions and the CEO declared one position. One of the entities declared by the Chair operated under two names (under a single Australian Business Number), one of which was declared. The NLC advised that it conducts a check of all financial transactions against the entities recorded in the declarations, including by Australian Business Number.

Staff members

4.32 Since February 2022 staff declarations are completed through an online system, which requires staff to read the Conflict of Interest Policy and a fact sheet. The staff members’ supervising managers are then required to specify whether they consider the disclosed interests to give rise to a conflict (via a checkbox), and identify actions to manage the conflict. The form includes a checkbox for staff to declare that they have no conflict of interest. Completion of a declaration is a required step within the first week of staff onboarding and for ongoing staff the Conflict of Interest Policy states that conflicts of interest ‘must be declared as soon as they are realised.’ In 2022, 178 of 347 permanent staff in 2021–22 (51 per cent) had completed declarations via the online system.

4.33 The ANAO assessed declarations made in 2022 by 10 senior managers (including the CEO), selected on the basis of their governance roles at the NLC. Declaration forms were completed via the online system by nine of the 10 sampled senior managers, and signed by the relevant supervisors. Of the nine declarations, three were a nil declaration, while the other six identified interests that may give rise to a conflict. The declaration form was completed incorrectly for three of the six senior managers who declared interests: one form did not fully record what impact the conflict of interest may have or any management strategy; and two forms did not clearly record a management strategy. The tenth senior manager (the CEO) identified a position held on the board of another entity in the annual declaration for key management personnel, however did not make a declaration as required for all staff under the Conflict of Interest Policy.

4.34 Under the 2021 Conflict of Interest Policy, the NLC is to undertake an annual audit of employees’ declarations. In October 2022 the NLC conducted a ‘review’ of staff who had not provided a declaration via the online system, and the NLC advised that it repeated this process in May 2023. Following the October 2022 review, seven senior managers were provided with a list of staff who had not completed their declarations, and the NLC advised that it did the same in May 2023. No further follow-up was undertaken. In July 2023 the NLC advised it would undertake a ‘major push’ for conflict of interest declarations in October 2023.

Council members

4.36 Section 29AA of the ALRA requires that each member of a Land Council make a written declaration of their direct or indirect pecuniary interests, in a register of interests kept by the Council. This is to be done in accordance with a determination made by the Minister for Indigenous Australians (the Minister) regarding the kind of interests to be disclosed, the manner in which the disclosures are to be made and the form in which the register is to be kept. Such a determination had not been made by the Minister as at April 2023.

4.37 The NLC Member Handbook requires that Council members declare their interests at meetings. The Council members making the declaration are not permitted to vote and may be asked to leave the meeting. The NLC records conflicts of interest in two ways: through meeting minutes; and in annual registers, which are based on conflicts declared during meetings and are compiled every calendar year. The NLC provided to the ANAO the Executive Council meetings registers for 2020, 2021 and 2022.

4.38 The ANAO examined meeting minutes from 2021–22 and found that conflicts were declared at eight of the 17 meetings conducted in 2021–22: three Executive Council and five regional Council meetings. For most of the conflicts declared (33 out of 43), a management strategy was noted whereby the member was recorded as leaving the room or abstaining from voting. For the remaining 10 declared conflicts, five related to agenda items that did not require a Council resolution. Of the five conflicts that related to agenda items that required a Council resolution, nothing was recorded in the minutes to indicate any action was taken.

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

Corporate plan

4.39 The ANAO assessed the NLC’s compliance with requirements for its 2021–2025 Corporate Plan as set out in the PGPA Rule and Department of Finance (Finance) guidance (see Appendix 9). The 2021–2025 NLC Corporate Plan⁷⁴ met the requirements relating to its reporting period, introduction, and timeliness of publication. The remainder of this section discusses requirements that were not met in the 2021–2025 Corporate Plan in relation to providing: an explanation of the entity’s purpose; a summary of key risks and the management of those risks; and performance measurement against the entity’s purpose.

Purpose

4.40 The NLC 2021–2025 Corporate Plan does not set out the NLC’s purpose in a clear and concise way. There is a ‘strategic direction’ which includes a vision and mission statement, however Finance guidance⁷⁵ notes that vision or mission statements should not be a substitute for a purpose statement. The 2021–2025 NLC Corporate Plan contains four goals: ‘Advocate: Be a voice for Aboriginal people’; ‘Opportunity and empower: Create real opportunities for Aboriginal people’; ‘A strong NLC: Be a culturally rich and trusted organisation’; and ‘Proactively manage country: Acquire, manage and protect traditional lands and waters in accordance with statutory functions.’ Again, these do not represent a clear purpose statement. By contrast, the Anindilyakwa Land Council and the Central Land Council corporate plans have clear purpose statements that reference NT Land Councils’ legislative functions as prescribed under the ALRA.

Risk summary

4.42 Item 4 of subsection 16E(2) of the PGPA Rule requires the corporate plan to set out (among other things) 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. The 2021–2025 Corporate Plan included a summary of the risk oversight and management systems that the NLC uses, however did not include the key risks that the NLC will manage, or how those risks will be managed. It identified COVID-19 as the ‘most significant risk’ faced by the NLC and provided some explanation of how that risk is dealt with, however no other risks were identified. The risk description was improved in the 2022–2026 Corporate Plan, which identifies eight key risks and provides the mitigation strategy for each risk.

Performance

4.43 The section of the 2021–2025 Corporate Plan titled ‘performance and achievements’ is separated into two sections. The ‘goals and objectives’ section contains a table that links the NLC’s four goals to different objectives (which resemble activities). The ‘goal alignment’ section links each objective (activity) to an ‘owner’ and ‘measure’ (sometimes with targets). Measures are included for 2022–23, 2023–24 and 2024–25.

4.44 Although the 2021–2025 Corporate Plan provides some meaningful performance information, this information could be improved in a number of ways.

• Many of the measures are not clearly explained. For example, the performance measure ‘customer satisfaction levels’ does not explain the level of customer satisfaction the NLC is working towards or how this will be measured.
• Some output measures do not have a specific target. For example, a target for the measure ‘number of work experience students in offices’ is not specified.
• Most of the activities and performance measures relate directly to the NLC’s legislative functions under the ALRA, however some measures are based on general functions of an organisation. For example, the Corporate Plan includes several measures relating to ICT management. Measures such as this do not allow the NLC to demonstrate its level of achievement against its specific purpose.
• The measures are focused on activities and outputs mainly, and occasionally outcomes; they do not measure efficiency.

4.45 In the 2022–2026 Corporate Plan there are improvements in the wording, content and presentation of the performance measures. However, the weaknesses discussed above are not addressed.

Annual report

4.47 The 2021–22 Annual Report is compliant with the PGPA Act and Rule, and the ALRA requirements (see Appendix 9).

Annual performance statements

The ‘clear-read’ principle

4.48 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.⁷⁶

4.49 The line of sight between the 2021–2025 Corporate Plan and the 2021–22 Annual Report is not clear. The measures identified in the 2021–2025 Corporate Plan appear in the 2021–22 Annual Performance Statements. However, the specific targets identified in the 2021–2025 Corporate Plan are not reported against in 2021–22 Annual Performance Statements. For example, in the 2021–2025 Corporate Plan, the performance measure ‘full, Executive and regional Council meetings held during the year’ has three specific targets: two full Council; six Executive Council; and 12–14 regional Council meetings held per calendar year. These specific targets did not appear in the 2021–22 Annual Performance Statements.

PGPA Rule section 16F requirements

4.50 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 NLC’s 2021–22 Annual Performance Statements met these requirements (see Appendix 9).

Development of the corporate plan and annual report

4.51 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.

4.52 The NLC accountable authority and Council had some involvement in the development and approval of the 2021–2025 and 2022–2026 Corporate Plan and annual reports. At the September 2022 Executive Council meeting, members discussed and directed NLC staff on the wording and development of the NLC’s 2022–2027 Strategic Plan, including the development of strategic goals, vision and mission statements. A paper on the NLC Strategic Plan 2022–2027 presented to the full Council in December 2022 noted that upon approval of the Strategic Plan, the NLC accountable authority would commence work on the next corporate plan to ‘ensure that it aligns with the expectations and priorities set by the members.’

4.53 The NLC engaged with the National Indigenous Australians Agency (NIAA) and the Department of Finance when preparing the 2021–2025 Corporate Plan and the 2021–22 Annual Report. The NIAA conducted a compliance check of the draft 2021–2025 Corporate Plan and provided feedback to the NLC, which the NLC incorporated into the finalised version of the Corporate Plan. The NLC also participated in sessions held by Finance’s ‘Performance Community of Practice’, to maintain and expand its understanding of reporting requirements under the PGPA Act.

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

Internal audit function

4.54 An internal audit function 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.⁷⁷

4.55 Auditor-General Report No. 55 2016–17 Effectiveness of the Governance of the Northern Land Council⁷⁸ noted that, as at April 2017 the NLC did not have an internal audit function, although the NLC Audit Committee had agreed in November 2016 to consider establishing such a function by 30 June 2017. In May 2020 the NLC established the Governance, Compliance and Risk Unit, with a mandate covering strategic planning, monitoring and risk management. The Governance, Compliance and Risk Unit drafted the first Internal Audit Strategy (covering 2021–22 to 2023–24) in 2021. The draft Internal Audit Strategy identifies focus areas and a work plan.

4.56 The draft Internal Audit Strategy determines that the audit program will be delivered partly in-house and partly using an external provider. In July 2022 the NLC engaged Deloitte Touche Tohmatsu Limited (Deloitte) as its contracted internal audit partner for the period 2022–23 to 2024–25. The NLC advised the ANAO that Deloitte has been commissioned to provide assurance mapping of the NLC’s key controls by July 2023, and that that this would inform the finalisation of the draft Internal Audit Strategy and the audit work plan priorities.

Establishment and composition of the Audit Committee

4.57 The NLC is fully compliant with the PGPA Rule requirements and Finance guidance in relation to an Audit Committee charter, and the establishment and composition of an Audit Committee (see Appendix 10).

Charter

4.58 The NLC’s Audit Committee Charter provides that the Audit Committee will review the Charter at least annually and that ‘any substantive changes to the charter will be recommended by the Audit Committee and formally approved by the accountable authority’. The Charter was reviewed by the Audit Committee in March 2022. The ANAO examined accountable authority-endorsed versions of an Audit Committee Charter dated March 2017, March 2020 and March 2022. The March 2022 Charter contains the relevant requirements as set out in the PGPA Rule and associated Finance guidance.

Member characteristics

Skills and experience

4.59 The NLC Audit Committee Charter requires that members have:

appropriate qualification, knowledge, skills or experience to enable the committee to perform its function effectively and efficiently. At least one member of the Committee should have a background in financial reporting, accounting and auditing, however, the lack of any such member shall not invalidate or otherwise affect the actions taken by the Committee.

4.60 The qualifications, knowledge, skills and experience of Audit Committee members were reported in the NLC’s 2021–22 Annual Report — two of four members at the time held qualifications in accounting and finance, and the remaining two members were members of the full Council. The formal qualifications and technical skills of the Audit Committee members who are also members of the full Council were not specified.

Independence

4.61 The NLC’s Audit Committee Charter requires the Audit Committee to comprise three to five members appointed by the accountable authority of whom the majority must not be Council or ‘Executive members’.⁷⁹ The accountable authority appoints an ‘independent’ member as the Chair of the Audit Committee. As at April 2023 the NLC’s Audit Committee consisted of a Chair and two other members, neither of whom were NLC employees or Council members.

4.62 The NLC’s Audit Committee Charter requires members to provide annual written declarations of any material personal interests and to declare any material personal interests at the beginning of each meeting based on specific matters on the meeting agenda. In relation to the annual declaration, in September 2022, two of the three members of the Audit Committee declared nil interests and one declared two interests relating to their employment in a legal firm and position as a board member for a non-governmental organisation. There were no management plans outlined for the one member who declared interests in the annual declaration. In 2021–22, the Audit Committee meeting minutes did not record whether any material personal interests were declared at the beginning of each meeting during any of the four meetings that occurred. The NLC advised that effective from March 2023 members would be required to declare any material personal interests and a management plan would be established for any declared interest. The draft March 2023 meeting minutes noted that there were no conflicts declared.

Remuneration

4.63 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.⁸⁰ The NLC 2021–22 Annual Report noted that the Audit Committee met four times and members other than the Chair each received between $156 and $496 for each meeting attended.⁸¹ The Chair of the Audit Committee received, for the four meetings attended, $3048.⁸²

Rotation

4.64 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’.⁸³ Finance guidance indicates that the Finance Secretary wrote to all accountable authorities in August 2019 drawing their attention to this recommendation.⁸⁴

4.65 The NLC’s Audit Committee Charter provides that the term of appointment for Audit Committee members is initially for three years with reappointments possible for further terms of 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 and skills and experience.’ There is no limit on the number of terms that an Audit Committee member may serve. The Audit Committee Chair was first appointed as a member of the Audit Committee in 2015–16 and was appointed as Chair in September 2019. One of the two remaining members was first appointed to the Audit Committee in 2019–20 and the second was appointed in September 2022.

Effectiveness of Audit Committee operations

4.67 Appendix 10 presents the ANAO’s assessment of the effectiveness of the NLC Audit Committee’s operations against the PGPA Rule requirements and Finance guidance. The ANAO assessment is based on analysis of Audit Committee meeting minutes and papers for 2021–22, direct observation of Audit Committee meetings in May and September 2022, and discussions with the Audit Committee members and NLC officials.

Mandatory functions and reporting

Mandatory functions

4.68 The Audit Committee has been discharging its assurance responsibilities in relation to financial reporting, risk oversight and management, and the system of internal control. However, the Audit Committee’s review of the NLC’s performance reporting, including the annual performance statements required under the PGPA Act, was not fully effective. In October 2022 the Audit Committee submitted a report to the accountable authority on the performance of its functions and responsibilities for 2021–22, which noted that ‘[t]he Committee reviewed the NLC’s performance reporting and provided a reasonable level of assurance to the accountable authority on the appropriateness of the performance reporting’. However, there was limited evidence in meeting minutes that the NLC Audit Committee considered the appropriateness or completeness of the performance measures. The draft NLC 2021–22 Annual Report and draft NLC Corporate Plan 2021–2025 were provided to the Audit Committee at the October 2021 meeting, however the Audit Committee had no questions or feedback on them.

Mandatory reporting

4.69 The Audit Committee’s mandatory reporting requirements were partly met.

• Charter and committee members — The NLC’s 2021–22 Annual Report included information about the committee members including name, qualifications, meetings attended and remuneration. The link to the Audit Committee Charter was not a direct electronic address as required by paragraph 17AG(2A)(a) of the PGPA Rule, instead a general link to the NLC’s website.
• Written statement — The Finance guidance outlines that the Audit Committee advice to the accountable authority should be documented in the form of a written statement of its view of the appropriateness of the accountable authority’s financial reporting. While the NLC provided reports to the accountable authority in March 2022 and October 2022, these reports did not include a clear statement on its views on the appropriateness of the accountable authority’s financial reporting. Rather the reports outlined the Audit Committee’s general compliance with its Charter.
• Assessment of Audit Committee performance — The NLC Audit Committee Charter includes a provision that the Chair of the Audit Committee will initiate a self-assessment of the performance of the Audit Committee at least once every two years. Meeting minutes show that the Audit Committee undertook a self-assessment of its performance in March 2021, however, the Audit Committee did not document the results of its self-assessment. Reports provided to the accountable authority in March 2022 and October 2022 state that ‘The Committee has undertaken a self-assessment of its performance in March 2021’.

Review function

4.70 A suggested function for audit committees of corporate Commonwealth entities in undertaking their review function is to review the implementation of agreed recommendations from external reports, such as ANAO reports and parliamentary committee inquiries.⁸⁵ This function is not included in the NLC’s Audit Committee Charter.

4.71 Auditor-General Report No. 55 2016–17 Effectiveness of the Governance of the Northern Land Council⁸⁶ made one recommendation to the NLC.⁸⁷ The NLC agreed to the recommendation, which was: ‘to support the administrative and strategic reforms underway, the Northern Land Council: develops and maintains an action plan to monitor the progress of reform initiatives and projects; and develops a communication strategy to inform staff of the changes.’ While the NLC’s Audit Committee meeting minutes from 18 September 2018, 5 December 2018 and 9 April 2019 record that implementation of the ANAO recommendation was to be monitored by the Audit Committee, there is no record of consideration or monitoring of the recommendation in Audit Committee minutes in the period from September 2018 to May 2022. The NLC was not able to provide evidence to the ANAO that it had implemented the recommendation.

Appendix 1 Northern Land Council response

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 peoples 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 Aboriginal peoples 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 bodies corporate 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 Public Governance, 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 Native Title Act 1993 (Cth), Native Title (Recognition as Representative Body–Central Land Council) Instrument 2018, and Native Title (Recognition as Representative Body – Northern 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.⁸⁸

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 powers⁸⁹, also with some exceptions.

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

Source: Extracts from the Aboriginal Land Rights 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 Trust 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 the 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.⁹⁰
• 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 Native title policies, procedures and processes

Table A.5: Northern Land Council’s Native Title policies, procedures and processes

Note a: The NLC defines the client as the person or persons who request services under the Native Title Representative Body’s facilitation and assistance functions, or the persons who constitute the native title claim group in relation to a native title determination application.

Source: ANAO analysis of NLC documentation.

Appendix 8 Northern Land Council 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.6: Northern Land Council’s compliance with the Commonwealth Fraud Rule

Key: ◆ Fully compliant ▲ Partly compliant ■ Not compliant

Source: ANAO analysis of NLC fraud control policy and records.

Appendix 9 Northern Land Council compliance with corporate plan, annual report and performance statements requirements

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 include 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.⁹¹

Table A.7: Compliance of Northern Land Council’s 2021–2025 Corporate Plan with PGPA Rule 16E requirement

Key: ◆ Fully compliant ▲ Partly compliant ■ Not compliant

Note a: In the NLC 2021–2025 Corporate Plan, ‘key activities’ are labelled ‘objectives’.

Note b: Deficiencies in the discussion of risk were improved in the 2022–2026 Corporate Plan.

Source: ANAO analysis of Northern 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.8: Compliance of Northern Land Council’s 2021–22 Annual Report with PGPA Act, PGPA Rule and ALRA requirements

Key: ◆ Fully compliant ▲ Partly compliant ■ Not compliant

Source: ANAO analysis of Northern 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.9: Compliance of Northern Land Council’s 2021–22 Annual Performance Statements with PGPA Rule section 16F 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 Northern Land Council’s 2021–22 Annual Performance Statements.

Appendix 10 Northern Land Council 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.⁹² 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.⁹³ 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.⁹⁴

Table A.10: Effectiveness of the Northern Land Council Audit 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.’⁹⁵

Table A.11: Effectiveness of the Northern Land Council Audit Committee operations

Key: ◆ Fully compliant ▲ Partly compliant ■ Not compliant

Source: ANAO analysis, based on analysis of audit committee minutes and papers for 2021–22.