Reports must be based on facts.

Literal

Reports [topic-は] facts [on-に] based-[must-be-なければならない]

に基づく = to be based on (基 foundation + づく to be grounded). ~ていなければならない layers three pieces: ている (state) + なければ (if not) + ならない (won't do) = 'must be in the state of being based on.' A formal, principled statement.