Frequently asked questions
This page contains some of the frequently asked questions about the Commonwealth Resource Management Framework, and the PGPA Act which is the cornerstone of the Framework. The questions are divided into the following categories:
- Features of the PGPA Act
- The PMRA agenda
- Accountable authorities, officials and governing entities
- Planning and performance
- Use and management of public resources
- Working with others
For further information on any of the FAQs or questions not answered below, please contact us at firstname.lastname@example.org.
The PGPA Act establishes the framework for managing resources by the Commonwealth entities and companies.
The PGPA Act replaced the Financial Management and Accountability Act 1997 (FMA Act) and the Commonwealth Authorities and Companies Act 1997 (CAC Act) on 1 July 2014, consolidating the governance, performance and accountability requirements of the Commonwealth into a single piece of legislation.
The PGPA Act has 4 objects:
- To establish a coherent system of governance and accountability across Commonwealth entities by:
- establishing a uniform set of duties for accountable authorities
- establishing a uniform set of duties for all officials
- establishing a comprehensive and uniform reporting framework for all Commonwealth entities
- clarifying the Finance Minister's role in relation to the financial framework
- To establish a performance framework for all Commonwealth entities
- To require Commonwealth entities to:
- meet high standards of governance
- meet high standards of performance
- meet high standards of accountability
- provide meaningful information to the Parliament
- ensure that public resources are used and managed properly
- cooperate with others to achieve common objectives
- To require Commonwealth companies to meet high standards of accountability.
The PGPA Act sets out main principles and requirements for the Commonwealth Resource Management Framework. Rules and other legislative instruments establish the requirements and procedures necessary to give effect to the governance, performance and accountability matters covered by the Act.
For further information see PGPA Act legislation and associated instruments.
The Public Management Reform Agenda (PMRA) seeks to modernise the financial framework of the Australian Government so that it will support high quality resource management and performance now and into the future.
The PMRA commenced in December 2010 with the Commonwealth Financial Accountability Review (CFAR). Stage 1 concluded on 1 July 2014 with the establishment of a single resource management framework under the PGPA Act.
The PMRA is currently focussing on improving the quality of planning, performance information and evaluation within government to improve accountability to ministers, the Parliament and the public. It is also about continuing the focus on internal processes so that they can be more streamlined, risk based and better focused.
Key priority areas' for development include an enhanced performance measurement and reporting regime, and streamlining the financial reporting requirements for Commonwealth entities, which is compliant with the Australian Accounting Standards while still meeting the needs of the government and parliament, by removing duplicated information and other disclosures that do not add value.
For further information and ongoing news about the PMRA visit the PMRA website .
Please refer to the PMRA website for the latest information on what is happening with differential regulation.
The accountable authority of a Commonwealth entity is:
- the person (e.g. Secretary or Chief Executive) or
- group of persons (e.g. the governing board)
that has responsibility for, and control over, the entity's operations. The accountable authority for:
- a Department is the Secretary
- a listed entity is the person or persons set out in the PGPA rule
- a corporate Commonwealth entity is the person(s) set out in the entity's enabling legislation or the PGPA rules, typically a board.
The general duties of in ss15 to 19 of the PGPA Act are explained in General duties of accountable authorities. These duties are to:
- govern the entity to:
- promote the proper use and management of public resources
- promote the achievement of the purposes of the entity
- promote the financial sustainability of the entity
- establish and maintain systems for risk oversight and control
- encourage cooperation and reduce the red tape burden on others
- keep the responsible minister & Finance Minister informed of certain things.
The PGPA Act enables accountable authorities to give instructions to officials in their entities relating to any matter of finance law (AAIs). AAIs are instruments made under section 20A of the PGPA Act. AAIs are part of the finance law that officials working in an entity are required to comply with. Accountable authorities can also give instructions to officials of other entities in relation to:
- the official approving the commitment of relevant money for which the accountable authority is responsible
- the official banking, or otherwise dealing with, relevant money for which the accountable authority is responsible
- the official debiting or crediting an appropriation for which the accountable authority is responsible
- any matter prescribed by the rules that relates to the official dealing with public resources for which the accountable authority is responsible.
Yes, Finance has developed Model AAIs for non-corporate Commonwealth entities to assist accountable authorities who may wish to issue instructions to officials.
Draft model AAIs for corporate Commonwealth entities are available on request from email@example.com.
Yes, the Finance Minister delegated certain powers in the PGPA Act to accountable authorities of non‑corporate Commonwealth entities.
Section 110 of the PGPA Act enables those accountable authorities to sub-delegate these powers to officials.
Officials are individuals who are in, or form part of, a Commonwealth entity, including:
- accountable authorities
- employees, officers or members of the entity (e.g. members of a commission or members of a Board)
- persons prescribed by an Act (e.g. statutory office holders) or the PGPA Rule (e.g. s9 of the PGPA Rule lists classes of persons who are officials, including from 1 July 2015, a contractor or employee of a contractor who is prescribed by the accountable authority).
Officials do not include:
- ministers and judges
- most consultants and independent contractors, unless prescribed by an Act or the PGPA Rule
- any persons excluded by an Act or the PGPA Rule.
Sections 25 to 29 of the PGPA Act impose general duties on all officials to promote high standards of governance, performance and accountability. The duties include:
- a duty of care and diligence
- a duty to act honestly, in good faith and for proper purpose
- a duty not to misuse position or information
- a duty to disclose interests.
As a transitional measure in the move from the FMA Act to the PGPA Act:
- a person who was an allocated official before 1 July 2014 (in accordance with former FMA Regulation 4), will be taken to be an official under the PGPA Act until the arrangement that made the person an allocated official expires: s31 of Sched 2 of the PGPA (Consequential and Transitional Provisions) Act 2014. The duties of officials and other requirements under the PGPA Act will apply to that person for the duration of the arrangement and an allocated official can be delegated powers as appropriate.
- a person who became an allocated official between 1 July 2014 and 30 June 2015 under the transitional arrangements continued as officials for the duration of the arrangement or until 30 June 2015 (whichever is first): s6 of the PGPA(Consequential and Transitional Provisions) Rule 2014.
No new allocated officials can be created after 1 July 2015. From 1 July 2015, to be made subject to the PGPA Act, an individual who is not part of a Commonwealth entity must be prescribed as an official in accordance with section 9(1) or Schedule1 of the PGPA Rule in order to subject to the PGPA Act or PGPA Rule. Refer to guidance on how to prescribe a person as an official of your entity.
Granting an indemnity involves entering an arrangement that contains the indemnity. Entering an arrangement that contains an indemnity would generally involve the exercise of two powers – the power to enter the arrangement, such as section 23(1) of the PGPA Act, and the power to grant an indemnity under section 60.
Some routine arrangements involve indemnities – examples include venue hire and equipment hire. From a practical perspective, accountable authorities may wish to consider delegating the power to enter these arrangements (eg section 23(1)) and section 60 powers to officials that enter these arrangements. These officials will be exercising both powers when they enter these arrangements. That is they will be entering the arrangement and granting the indemnity on behalf of the Commonwealth.
The enhanced Commonwealth performance framework has been introduced to meet the requirement for a performance framework across Commonwealth entities under paragraph 5(b) of the PGPA Act 2013. This is the first time that the importance of performance has been explicitly recognised in Commonwealth legislation. While legislation, of itself, does not guarantee effective performance, the framework creates momentum for change and sets the standards that are to be met especially in relation to the quality of performance information, and performance monitoring, evaluation and reporting. This in turn assists in the production of Good-quality performance information that improves transparency and accountability and, as a result, the confidence of the Parliament and the public in government operations. For further guidance please see RMG-130 Overview of the enhanced Commonwealth performance framework.
The enhanced Commonwealth Performance framework is now in place. All Commonwealth entities are required to meet all the minimum requirements of the framework as specified by the PGPA Act 2013 and the associated PGPA Rule 2014. For further information on the enhanced Commonwealth performance framework please see Managing performance.
The main elements of the enhanced Commonwealth performance framework are:
1) flexible performance measurement and reporting. Within the enhanced Commonwealth performance framework entities are now free to utilise a broad range of performance measurement methodologies to best assess and present their entity's performance.
2) introduction of consistent planning and reporting mechanisms that establish a clear line of sight between planning and reporting. These requirements are:
a) Corporate plan – as required by Section 35 of the PGPA Act 2013 (or section 95 for Commonwealth Companies); and
b) Annual Performance statements – as required by Section 39 of the PGPA Act 2013.
3) a more comprehensive set of guidance materials to support implementation and ongoing development of the enhance Commonwealth performance framework. To access guidance please see Managing performance.
Corporate plans are intended to be the primary planning documents of Commonwealth entities and companies, informed by the their internal planning processes, setting out the objectives and strategies they intend to pursue in achieving their purposes over at least four reporting periods. The purpose of requiring all Commonwealth entities and companies to produce a corporate plan is to ensure that robust planning processes are in place across the Commonwealth, and that the quality of performance information produced through this process meets the needs of both internal and external stakeholders. For further guidance on corporate plans please see RMG-132 Corporate plan for Commonwealth entities and RMG-133 Corporate plan for Commonwealth companies
All corporate and non-corporate Commonwealth entities and Commonwealth companies, as defined by the PGPA Act 2013, are required to prepare a corporate plan once annually. For a comprehensive list of all Commonwealth entities and companies please see the PGPA flip chart.
The PGPA Rule 2014 sections 16E and 27A stipulate the minimum matters to be included in the corporate plan and its publication requirements. All Commonwealth entities and companies are required to complete corporate plans annually.
While many existing corporate plans and publications produced by Commonwealth entities and companies will be sufficient to fulfil these requirements, entities and companies should review their existing plans to ensure compliance. Entities and companies may utilise any existing planning documents (i.e. business plans, strategic plans, etc) without the need to rename or reproduce the publication, as long as the existing publication meets the minimum requirements as set by the PGPA Rule 2014.
All Commonwealth entities and companies will be required to prepare and publish corporate plans for the 2015-16 financial year and for each financial year after that (for entities that report on a financial year basis, please note that some entities may report on a calendar year basis). For most entities (unless otherwise required by enabling legislation) the plans will be required to be provided to the responsible Minister and the Minister for Finance, and published on the entity's website, by 31 August 2015 (or 28 February for entities that report on a calendar year basis). For further guidance on corporate plans please see RMG-132 Corporate plan for Commonwealth entities and RMG-133 Corporate plan for Commonwealth companies.
The accountable authority of the entity will need to provide a copy of the Corporate Plan to their Minister and the Minister for Finance. This must be done before the corporate plan is published on an entity's website. For most entities this is 31 August (for others their enabling legislation may determine a different requirement). Hard copies are no longer required to be provided to the Minister for Finance, instead, entities should email a copy of their 2016-17 plans to firstname.lastname@example.org. As soon as the corporate plan has been sent to this email address it is deemed to have been given to the Finance Minister.
If a corporate plan is varied after its publication on 31 August, the accountable authority must decide if the varied plan will be republished on the entity's website. Section 16E(6) of the PGPA Rule states that the requirement to publish a corporate plan applies only if the accountable authority considers that the variation to the corporate plan is significant.
A corporate plan should be updated to reflect any new purposes or key priorities for an entity. Material changes to the entity's operating environment or capability, or significant new activities or performance measures, may all warrant an update to a corporate plan during the reporting period for which it was prepared.
It should be noted that all entities and companies are required to prepare and publish (by 31 August) an updated 4 year corporate plan annually, whether or not there were any variations to the corporate plan prepared for the previous year.
The PGPA Rule 2014 section 16E determines the minimum matters to be included in the corporate plan and its publication requirements.
To support entities and companies in the preparation of their corporate plans the Department of Finance has also prepared Resource Management Guides:
The nature of the relationship between Portfolio Budget Statements (PBS) and its corporate plan is still to be finalised. Both documents will need to include non-financial performance information.
Finance is proposing to issue a Finance Secretary Direction Statement under Section 36(3) of the PGPA Act 2013. The Directions Statement will detail the minimum requirements governing the provision of performance information in PBSs and the nature of the relationship this information will need to have with the performance information contained in corporate plans.
The department of Finance will undertake further consultation in the second half of 2015 to flesh out the requirements and then finalise this process. It is intended that the arrangements concerning the PBS will be settled prior to the end of 2015.
The implementation of the enhanced Commonwealth performance framework now provides entities with the flexibility to choose different types of performance methodologies to measure and report on their performance. This allows for entities to select the most appropriate measurement methodology for their specific circumstances. For further information please see RMG-131 Developing good performance information
All commonwealth entities and companies are required to prepare a corporate plan that, unless otherwise prescribed by the entity's enabling legislation, covers at least four reporting periods (usually four financial years). The first of these four reporting periods, (or the first year that the plan covers) is known as 'the reporting period for which the plan is prepared under paragraph 35(1)(a) of the Act'. Performance reporting in annual performance statements is only required for that first reporting period of any given corporate plan. For further information please see RMG-132 Corporate plans for Commonwealth entities
Annual performance statements
Annual performance statements are one of two core elements in the enhanced Commonwealth performance framework. The corporate plan is developed at the beginning of the reporting cycle (the reporting year) and sets out an entity's strategies for achieving its purposes, its planned activities and how success will be measured. The annual performance statements are produced at the end of the reporting cycle (the reporting year) and provide an assessment of the extent to which an entity has succeeded in achieving its purposes. For further information of annual performance statements please see RMG-134 Annual performance statements for Commonwealth entities.
The annual performance statements should be a direct acquittal of the performance measures identified in an entity's corporate plan at the beginning of the plan's designated reporting period.
The annual performance statement and the corporate plan are the two main new elements of the enhanced Commonwealth performance framework. There is a close relationship between the two documents with the minimum requirements of annual performance statements linked to the content requirements of corporate plans (see PGPA Rule 2014 section 16E and 16F).
The annual performance statements for an entity are to be produced as soon as practicable after the end of each designated reporting period for the entity. For most entities a reporting period will be a financial year, unless otherwise prescribed in enabling legislation. The reporting period of the annual performance statement then, is that financial year most recently completed (i.e. immediately follows the completion of that reporting period's corporate plan).
Section 39(1) of the PGPA Act 2013 requires that the accountability authority of an entity prepare annual performance statements as soon as practicable after the end of each reporting period for the entity.
The annual performance statements are also required to be included in entities' annual reports.
Under section 46 of the PGPA Act, the annual report must be given to the responsible Minister by the 15th day of the fourth month after the end of the reporting period for the entity, for subsequent tabling by the Minister in parliament. For further information of annual performance statements please see RMG-134 Annual performance statements for Commonwealth entities
The minimum requirements for annual performance statements are outlined in Section 39 of the PGPA Act 2013 and section 16F of the PGPA Rule 2014, and is supported by guidance issued by the Department of Finance.
The table in subsection 16F(2) of the PGPA Rule 2014 sets out the matters that must be included in the annual performance statements for Commonwealth entities.
RMG-134 Annual Performance Statements for Commonwealth entities provides guidance on preparing annual performance statements for entities in accordance with the PGPA Act and the PGPA Rule.
There is no requirement for annual auditing of an entity's annual performance statements. However, annual performance statements can be scrutinised through the following means:
- Under section 40 of the PGPA Act 2013, the responsible Minister or the Minister for Finance may request the Auditor-General to audit the annual performance statements of an entity.
- The Australian National Audit Office can audit the annual performance statements at its own discretion, in accordance with Division 2 of Part 4 of the Auditor-General Act 1997.
The Regulator Performance Framework (RPF) is administered by the Department of Prime Minister and Cabinet and requires all Commonwealth regulators to be assessed and report against six key performance indicators for regulator performance.
Entities may use the performance reporting requirements (e.g. the corporate plan and annual performance statements) of the enhanced Commonwealth performance framework to address the reporting requirements of the RPF. However, entities should be aware that the key performance indicators in the RPF address the administrative efficiency and effectiveness of a regulatory function, which constitutes just one aspect of the purposes of an entity. To fully address the minimum requirements of the PGPA Rule 2014 (i.e. addressing how the entity will achieve its purposes), a more comprehensive representation of the entity is required in the corporate plan and the related annual performance statements
Refer to the RPF site for further information and guidance on entities' responsibilities under the RPF.
The PGPA Act applies to all public resources. Public resources are defined in section 8 of the PGPA Act to include:
- relevant money – money that is held as cash or in a bank account by the Commonwealth or a corporate Commonwealth entity
- relevant property – property (other than relevant money) that is owned or held by the Commonwealth or a corporate Commonwealth entity, this includes:
- real property
- other assets
- intellectual property
- appropriations – authority to draw money from the Consolidated Revenue Fund.
The Commonwealth Property Management Framework establishes the principles for the efficient, effective, economical and ethical use of property resources and applies to property leased and owned by non-corporate Commonwealth entities.
Relevant money is committed when the Commonwealth or a corporate Commonwealth entity undertakes an activity that results in an obligation to pay relevant money.
A proposal for the commitment of relevant money can be general in nature (such as, a proposal relating to a group or class of proposed arrangements), or relate to an individual arrangement.
See spending relevant money for further information.
A delegate may approve a proposed commitment of relevant money orally or in writing. However, if an approval is provided orally, s18 of the PGPA Rule requires that the approval is recorded in writing as soon as practicable.
An electronic approval, such as an email, or within an information system (where a delegate 'presses a button') would satisfy the requirement if it creates a record which could be retrieved (see s12 of the Electronic Transactions Act 1999 ).
The approval could also be a signed brief or minute, a signed purchase order or purchase order request (see ss2B and 25A of the Acts Interpretation Act 1901 ) proportionate to the size and risk of the commitment. For example, low value and low risk items, such as hiring a taxi to get to an official meeting may not require a formal documented approval in addition to a record of the transaction.
See spending relevant money for further information.
'As soon as practicable' is intended to provide officials with a degree of flexibility. An official should make a record appropriate to the circumstances and nature of the commitment in a timely manner. The accountable authority should clarify in the entity's internal controls what is considered 'as soon as practicable' for the purposes of the entity's operations.
A better practice example of as soon as practicable could be when an official arrives back at the office after verbally approving the proposed commitment of relevant money while not in the office.
See spending relevant money for further information.
A delegate could detail in the record of approval the terms of the approval including factual information, such as the parties involved and the costs of the proposed commitment. For high-risk commitments, the terms of the approval may also include, where appropriate:
- the key elements of the proposed commitment, such as the item, cost, parties, timeframes and any risks associated with the proposal
- any conditions on the approval, such as timing, or additional approvals
- any contingent liabilities, such as indemnities.
Depending on the nature of the approvals, accountable authorities should establish processes that require officials to record the terms and/or basis of particular approvals. Accountable authorities should require a higher degree of documentation by delegates for higher risk activities, such as significant and/or high value procurements.
See spending relevant money for further information.
A person exercising power under s32B of the Financial Framework (Supplementary Powers) Act 1997 (FFSP Act) to make an arrangement or grant of financial assistance that will involve Commonwealth expenditure does not need to (and cannot) be delegated power to approve a commitment of relevant money. This is because:
- There is no power contained in the FFSP Act (or regulations) to approve a commitment of relevant money relating to an arrangement or grant made under s32B.
- As a strict legal matter, it is doubtful that an accountable authority can delegate power under s23(3) PGPA Act in relation to arrangements or grants made under s32B.
- There is no legal requirement for a person who has been delegated power under s32B to have a separate and specific power to approve a commitment of relevant money.
However, a person exercising power under s32B will need to comply with the requirements of s18 of the PGPA Rule before they make an arrangement or grant that will involve Commonwealth expenditure. This is because:
- Where an arrangement or grant will involve Commonwealth expenditure, the person making the arrangement or grant will, as a practical matter, make a decision that money should be committed (or, in other words, approve a commitment of relevant money).
- Section 18 of the PGPA Rule is not limited to commitments of relevant money that are approved under s23(3) of the PGPA Act.
If your accountable authority has purported to delegate powers under s23(3) PGPA Act in relation to arrangements or grants under s32B of the FFSP Act, the delegation is unlikely to have any legal effect. However, this will not have any significant practical or legal consequences (although entities should review their delegations and update them at the next convenient time).
Accountable authorities who wish to include a separate approval step as part of their internal processes in relation to arrangements or grants made under s32B of the FFSP Act could direct a delegate (under s32D(4) of the FFSP Act) that they are only able to exercise the power to make an arrangement or grant under s32B in circumstances where they have obtained prior approval, from another specified person, for any commitment of money that will arise in relation to the arrangement or grant.
Section 23 of the PGPA Act defines an arrangement to include a contract, agreement, deed or understanding. This definition is broad and covers contracts as well as any other instruments between private parties that create rights and obligations. Examples of the range of agreements captured by s23 include, memoranda of understanding (either between Commonwealth entities or between governments), standing offers and grant agreements.
For the purposes of s23(1) of the PGPA Act, an arrangement does not include the following:
- statutory entitlement payments such as a social security benefit
- engaging employees under legislation, such as the Public Service Act 1999
- appointing persons to a statutory office.
A delegation under s23(1) is not required for these types of commitments.
See spending relevant money for further information.
A person who undertakes decision-making functions in relation to an arrangement, would be administering the arrangement. This person should have a delegation or an authorisation of the power in s23(1). For example, a contract manager might make decisions that a milestone has been reached by the contractor and that payment is to be made to the contractor for reaching the milestone. A person performing processing tasks in relation to an arrangement, without making any decisions about the arrangement, is not administering the arrangement for the purposes of s23(1).
See spending relevant money for further information.
The power to enter arrangements under the PGPA Act is given directly to the accountable authority of a non-corporate Commonwealth entity at s23(1) of the PGPA Act. Entering arrangements for the ordinary functions of the entity involving the use or management of other CRF money is within the scope of s23(1).
If you are not the accountable authority of a non-corporate Commonwealth entity you will need a delegation from the accountable authority under s23(1).
See spending relevant money for further information.
No, only arrangements that involve a person outside of the Commonwealth who is using or managing (including receipt of, custody of, or expenditure of) money for and on behalf of the Commonwealth, i.e. as an agent of the Commonwealth.
5.12 If a person outside of the Commonwealth is using or managing money in a way that could be characterised as other CRF money arrangement, is an other CRF money arrangement the only way to manage the arrangement?
No, arrangements to allocate as officials persons who are outside the Commonwealth and performing a 'financial task' for an entity are still in place — for a limited period. It is recommended that you discuss their use with Finance.
No, but officials considering entering an other CRF money arrangement must require that the person outside the Commonwealth is willing and able to meet the mandatory requirements that an arrangement for other CRF money must contain – as set out in s29 of the PGPA Rule. If these requirements cannot be met, an arrangement for the use or management of other CRF money cannot be made with that person.
Cooperation with others is a fundamental principle of the PGPA Act. The following provisions in the PGPA Act go directly to cooperation and partnering:
- the objects of the PGPA Act include: to require the Commonwealth and Commonwealth entities to work cooperatively with others to achieve common objectives, where practicable: s5
- the duty on an accountable authority to encourage cooperation, where practicable: s17
- the duty on an accountable authority to consider the burdens imposed on others: s18
- the ability for bodies corporate to be established using a similar process to that used to establish research and development corporations (RDCs) (s87), to provide a similar foundation for developing templates for Commonwealth-State partnerships and for joint ventures with other sectors, including the not-for-profit sector.
See Working with others for further information and resources.
The National Collaboration Framework (NCF) was created to assist Commonwealth entities, State/Territory and local jurisdictions to work collaboratively to achieve government objectives. The NCF can be used for intra or cross-jurisdictional project which would typically use a memorandum of understanding. It provides a tiered approach for entities to follow when seeking to collaborate and reduces costs, time and risk associated with program or project development and delivery.
Last updated: 09 February 2017