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R.154/2023
jerseyauditoffice.je
In This Guide
Introduction 3 Overarching principles 5
Supporting accountability 5 Accessibility 5
Transparent 5 Understandable 5
Operations 13 Performance analysis 16 Financial performance 19
Accountability report 25 Financial statements 30
Annual reports are a key means by which an entity tells the story of its year. Public annual reporting, done well, enables stakeholders to understand – with trust and confidence – an entity's strategy and the risks it faces, how much money has been spent and on what, and what has been achieved as a result. It enables stakeholders to hold the entity to account effectively.
In this third Good Practice Guide published by the Office of the Comptroller and Auditor General, I set out some good practice principles for excellence in annual reporting by public bodies. I also provide some illustrative examples drawn from my review of the annual reports which underpinned my report Annual Reporting published on 16 October 2023.
My reviews of the annual reports and accounts of Jersey entities for 2019 through to 2022 identified that most entities have made improvements to their annual reports, some significantly. However, as in previous years, progress in respect of accountability and sustainability reporting has been slower. In particular, remuneration and staff reporting (including disclosure of directors' pay and directors' interests) often falls below best practice.
The extracts within this Guide have been taken from various annual reports and links to the full reports are included for information. The key elements I consider to be good practice in a single annual report are summarised below.
Single Annual Report
Supporting accountability Transparent
Accessibility Understandable
Performance Report Accountability Report Financial Statements
Strategy Directors' or equivalent report Prepared under a suitable framework
Risks A statement of responsibilities Suitably assured Operations A governance report
Performance analysis A remuneration and staff report
Financial performance
External factors
I hope that organisations will find this Guide to be useful as they start to consider their public annual reporting for 2023 and beyond. Lynn Pamment
Comptroller and Auditor General
The best reports:
• tell the story of the organisation in a fair and balanced way
• comply with relevant reporting requirements; and
• include clear action points to take forward.
The best reports include:
• frank and honest analysis
• consideration of the challenges an organisation is facing
• appropriate use of data; and
• quantification of risks and performance measures.
These principles should be evident across all parts of the annual report.
Accessibility
The best reports:
• highlight key trends in the financial statements
• include concise summaries of key points; and
• consider how the organisation engages with key stakeholders and meets their needs.
Understandable
The best reports use:
• plain English to explain difficult concepts
• infographics and diagrams to communicate important messages; and
• a clearly integrated structure to help users navigate it effectively.
Strategy Risks Operations Performance Financial External Account- Financial
analysis performance factors ability statements
This Guide draws on examples of good practice from within each of the sections of an annual report. Each section includes examples where entities have made their annual reports more understandable to the reader through use of graphics, clear language, aids to make reports easier to navigate and signposting. In considering which examples to use, I reviewed Annual Reports of 38 Jersey entities which were available publicly at 31 July 2023.
The examples will not be an exhaustive list of good practice but are presented to provide ideas for all entities to think about as they plan their annual reporting for 2023 and are those that I think best portray the principles of good annual reporting.
Supporting
accountability Accessibility
Transparent Understandable
The best reports include:
• a statement of the purpose and activities of the entity, including:
o a brief description of the business model and environment
o organisational structure and priorities; and
o any other organisational strategic objectives and goals
• clarity around purpose, strategic objectives and key programmes/projects
• balanced view of progress against objectives
• details of plans to implement priorities; and
• strategy clearly linked to performance measures and risks.
Jersey Sport sets out clearly on one page how its mission, values and strategic purpose link to its four key areas of activity and the outcomes it is seeking to achieve.
2022 Jersey Sport Annual Report https://jerseysport.je/wp-content/uploads/2023/06/Jersey-Sport-Annual-Report-2022-Web.pdf
As noted in previous years, the Jersey Advisory and Conciliation Service, one of smallest entities I have reviewed, provides a proportionate, simple and effective summary of its purpose, what it does and its strategic aims. This is accompanied by a simple graphic showing how it seeks to achieve its strategic aims.
Jersey Advisory and Conciliation Service 2022 Annual Report 2022-jacs-annual-report-accounts.pdf
The best reports include:
• clear articulation of the entity's risk management process
• the key issues and risks that could affect the entity in delivering its objectives, how they have changed, how they have been mitigated and any emerging risks that may affect future performance
• risks that reflect the external environment and implications for the entity (for example, the COVID-19 pandemic)
• clear links between risks, strategic objectives and the annual report narrative
• quantified risks and realistic planned and implemented mitigations; and
• discussion about how the dynamic of the risk profile has changed over time, including developments in relation to specific risks disclosed.
In addition to a one-page summary of strategy, Jersey Sport also sets out its approach to risk management and a summary of its principal risks on a single page.
2022 Jersey Sport Annual Report https://jerseysport.je/wp-content/uploads/2023/06/Jersey-Sport-Annual-Report-2022-Web.pdf
Jersey Overseas Aid (JOA) also summarises its risk management process and risks on a single page. The JOA presentation is simpler with fewer graphics than some annual reports and the emphasis is on plain English. JOA describes clearly the importance of risk management to the JOA, the potentially severe consequences of JOA's risks and the controls put in place to manage these risks.
Jersey Overseas Aid 2022 Annual Report
joa.je/media/w0dpptsu2022-annual-report.pdf
The best reports include:
• discussion of the different delivery models, the reasons for using these models and how they achieve value for money
• narrative around how business operations support wider Government (or other) objectives
• for significant contracted-out services, discussion of how these contracts are awarded and how the entity manages the ongoing contract; and
• consideration of capital investment and how it achieves value for money.
The Jersey Financial Services Commission (JFSC) provides a simple narrative describing its delivery models, its use of contracted out services and how it achieves value for money when investing in capital.
Jersey Financial Services Commission 2022 Annual Report JFSC Annual Report 2022
The States of Jersey Development Company (JDC) sets out how it supports the Government of Jersey in the delivery of its strategic objectives.
States of Jersey Development Company 2022 Annual Report and Consolidated Financial Statements https://www.jerseydevelopment.je/esg-financials/governance/financials/
The best reports include:
• a statement from the entity's lead Minister or chief executive, accountable officer or equivalent providing their perspective on the performance of the entity over the period
• a performance analysis showing how the organisation has performed against priorities (or any other organisational strategic objectives and goals) using qualitative and quantitative information and prior year trend information where possible. Performance data against each of the indicators used to monitor performance against priority outcomes should be provided. Any financial information provided should link to the financial review
• non-financial information including on environmental protection, social responsibility, respect for human rights, anti-corruption and anti-bribery matters and diversity
• information on environmental matters including the impact of the entity's business on the environment and identifying where its performance contributes towards the delivery of United Nations Sustainable Development Goals (SDGs)
• quantified Key Performance Indicators (KPIs) aligned to strategic objectives and making appropriate use of financial and non-financial data
• balanced assessment of goals achieved and performance against targets; and
• graphics used to illustrate performance.
Andium Homes provides a one page summary of performance across its five key strategic areas, supported by an analysis of KPIs.
Andium Homes Annual Report 2022 andium-homes-annual-report-2022
JT's performance update includes a single page balanced score card which is rated Red, Amber or Green to show 2022 performance against annual KPIs. The following page then provides further detail for each objective.
JT Group Ltd Annual Report and Financial Statements for the year ended 31st December 2022 www.jtglobal.com/about-us/
The best reports include:
• a financial review detailing financial performance
• a fair and balanced reflection of financial performance which is consistent with the underlying financial statements
• an explanation of the adoption of the going concern basis where this might be called into doubt, for example where there are significant net liabilities that will be financed from resources voted by the States Assembly in the future; and
• discussion of actual performance against expected/budgeted performance.
As I noted last year, in addition to publishing audited financial statements, Digital Jersey summarises its financial performance for the year in the form of a table comparing actual expenditure with budget and a simple graph.
Digital Jersey Limited Annual report and financial statements 31 December 2022 https://www.digital.je/our-work/annual-report-2022/
Jersey Competition Regulatory Authority's (JCRA's) activities are separately funded and subsidisation is not permitted across sectors. As a result, the resources section of the JCRA's annual report includes a graph setting out income and expenditure for the five sectors it regulates.
Jersey Competition Regulatory Authority Annual Report & Accounts 2022 https://www.jcra.je/annual-reports/
The best reports include:
• consideration of the external drivers that influence and impact on current objectives; and
• innovative reporting on sustainability and climate change.
Jersey Care Commission's sustainability report focusses on climate issues and provides quantitative information on air miles travelled and CO2 emissions.
Jersey Care Commission 2022 Annual Report https://carecommission.je/wp-content/uploads/2023/06/2022-Annual-Report.pdf
As in previous years, the States of Jersey Development Company's (JDC's) annual report has a detailed section on Environmental, Social and Governance (ESG) issues. For 2022, the annual report describes JDC's nine pillars of influence, how these have been developed from the Jersey Performance Framework and UN Sustainable Development Goals. It then summarises its performance for each pillar.
States of Jersey Development Company 2022 Annual Report and Consolidated Financial Statements www.jerseydevelopment.je/esg-financials/governance/financials/
The best reports include an accountability report that encompasses:
Directors' or equivalent report
A statement of responsibilities
A governance report
A remuneration and staff report
These include sensitive areas such as assessments of the effectiveness of the board (or equivalent) and senior pay.
JT's board effectiveness report sets out the process for assessing effectiveness, the outcome of the assessment, the areas for improvement and action being taken.
JT Group Ltd Annual Report and Financial Statements for the year ended 31st December 2022 www.jtglobal.com/about-us/
The Jersey Care Commission annual report provides an extract from its Commissioners' register of interests.
Jersey Care Commission 2022 Annual Report https://carecommission.je/wp-content/uploads/2023/06/2022-Annual-Report.pdf
The Ports of Jersey annual report provides a straightforward summary of the Ports of Jersey remuneration policy and the remuneration paid to each of its directors.
Ports of Jersey Annual Report 2022 https://www.ports.je/pdfviewer/poj-annual-report-2022
The States of Jersey annual report provides a comprehensive staff and remuneration report including disclosures on fair pay.
States of Jersey Group 2022 Annual Report and Accounts https://www.gov.je/Government/Pages/StatesReports.aspx?ReportID=5672
Where entities are required to prepare financial statements, the best reports include financial statements that are:
Prepared under a suitable framework; and
Suitably assured.
The Data Protection Authority (DPA) annual report includes the audited financial statements and independent auditor's report. The financial statements are prepared under the UK Financial Reporting Standard (FRS) 102. The DPA seeks to ensure the financial statements are proportionate to its needs by applying the small entities regime under FRS 102(1A) and taking advantage of the exemption from preparing a statement of cash flows.
Jersey Office of the Information Commissioner Annual Report 2022 https://www.jerseyoic.org/governance/annual-reports/annual-report-2022/