PGPA Newsletter 58

The Public Governance, Performance and Accountability Amendment (2020 Measures No. 1) Rules 2020 (the Amending Rule) was registered on 27 February 2020.

Please note that the amendments in the Amending Rule have various commencement dates.

In relation to audit committees

• The changes in relation to membership of an audit committee for a Commonwealth entity will apply on and after 1 July 2021:
   
  • All audit committee members of a non-corporate Commonwealth entity must be persons who are not officials of the entity, and a majority of the members must be persons who are not officials of any Commonwealth entity (subsection 17(4)); and
     
  • For a corporate Commonwealth entity, all of the audit committee members must not be employees of the entity (subsection 17(4AA)).

• The new enhanced audit committee disclosure requirements applicable to Commonwealth entities and Commonwealth companies (subsection 17AG(2A), paragraph 17BE(taa) and paragraph 28E(ob)), will apply in relation to an annual report for a reporting period that begins on or after 1 July 2019.

In relation to performance and corporate plans

• The new requirements for corporate plans for Commonwealth entities and companies (section 16E, section 16EA and section 27A) will apply for a reporting period that begins on or after 1 July 2020.

Managing exposure to liability for Commonwealth entities

• The new right for an accountable authority to access an entity’s books (section 16DA) applies in relation to a person who ceases to be the accountable authority, or a member of the accountable authority of, a corporate Commonwealth entity. This takes effect on the commencement of the Amending Rule on 28 February 2020.
• The requirements relating to the granting of indemnities and exemptions by corporate Commonwealth entities (section 22B) applies in relation to a liability incurred on or after the commencement of the Amending Rule on 28 February 2020.

Not progressing at this time

Given that the development of Portfolio Budget Statements (PBSs) has commenced for many entities, proposed amendments to the Finance Secretary Direction will not be progressed at this time and the existing requirements for the inclusion of performance information will continue to apply.

The following Resource Management Guides have been updated to reflect the amended PGPA Rule requirements:

• RMG 202 - Guide for non-corporate Commonwealth entities on the role of audit committees
• RMG 202 - Guide for corporate Commonwealth entities on the role of audit committees
• RMG 132 - Corporate plans for Commonwealth entities (note that this RMG has been replaced)
• RMG 133 - Corporate plans for Commonwealth companies (note that this RMG has been replaced)

A new Resource Management Guide, RMG131A - Developing performance measures has been developed and replaces the “Quick Reference Guide” that supported RMG 131 – Developing good performance information.

Finance has circulated the Public Governance, Performance and Accountability Amendment (Grant Rules for Corporate Commonwealth Entities) Rules 2020 (the Proposed Amendments) to corporate Commonwealth entities for consultation. Finance invites corporate Commonwealth entities to provide comments by 20 March 2020. Please contact your CFO or Legislation Liaison Officer if you would like to provide comments on the Proposed Amendments.

The Proposed Amendments are intended to implement Recommendation 4 of the Auditor-General Report No.23 2019-20 Award of Funding under the Community Sport Infrastructure Program (the Report). The Proposed Amendments:

• set out requirements relating to corporate Commonwealth entities making grants where a minister approves or requests the making of such grants; and
• are limited to circumstances where a Minister approves or requests that a grant be made by a corporate Commonwealth entity in its own right (i.e. not on behalf of the Commonwealth).

The Proposed Amendments do not provide authority for the making of grants and only seek to regulate the process where a minister is involved. Authority to make grants will need to be found elsewhere (e.g. the enabling legislation of a corporate Commonwealth entity).  

Please contact PGPA@finance.gov.au if you have any questions in relation to the Amending Rule.

Finance has circulated the Public Governance, Performance and Accountability Amendment (Consultancy and Non-Consultancy Contract Expenditure Reporting) Rules 2020 (the Proposed Rules) to non-corporate Commonwealth entities for consultation. Finance invites non-corporate Commonwealth entities to provide comments by 20 March 2020. Please contact your CFO if you would like to provide comments on the Proposed Rules.

The Proposed Rules are intended to implement Recommendation 38 of the Independent Review into the Operation of the Public Governance, Performance and Accountability Act 2013 and Rule (Independent Review).

On 1 October 2019 Finance emailed CFOs of all Commonwealth entities a package of proposed amendments to the PGPA Rule related to the implementation of various recommendations of the Independent Review. The package included a previous iteration of a proposed rule to implement Recommendation 38.

Entities provided useful comments on that iteration which have influenced the re-drafting of the Proposed Rules to their current form. The Proposed Rules have a number of differences in comparison to their previous iteration, including:

• Revised definitions;
• The capture of all expenditure on contracts (consultancy and non-consultancy) that are published on AusTender only; and
• The application of the Proposed Rule to any reporting period that beings on or after 1 July 2019.

Please contact pgpa@finance.gov.au if you have any questions in relation to the Amending Rule.

A new Flipchart of PGPA Act Commonwealth entities and companies was issued on 1 February 2020.

The updated Flipchart reflects the Machinery of Government changes announced by the Prime-Minister on 5 December 2019 (commenced on 1 February 2020) and the renaming of the North Queensland Livestock Industry Recovery Agency to the National Drought and North Queensland Flood Response and Recovery Agency.

In summary, the Machinery of Government changes entailed:

• 4 Departments of State abolished
• 3 Departments of State renamed
• 1 of the 4 abolished Departments of State was re-established as an Executive Agency under the Public Service Act 1999 and listed as a new non-corporate Commonwealth entity (Services Australia) in Schedule 1 to the PGPA Rule
• 22 Corporate Commonwealth entities moved portfolios
• 4 Commonwealth companies moved portfolios.

Further detail on these updates is available in the table of changes.

Here are the latest versions of the Flipchart and its associated List of Commonwealth entities and companies.

In November 2019 Finance undertook the annual PGPA Entity Survey offering all Commonwealth entities and companies an opportunity to provide feedback on how the PGPA framework is applied in practice and areas that may need Finance’s attention.

Eighty-nine Commonwealth entities and companies chose to participate in the survey. Thank you to those who committed their time to participate and provide their views. The survey report will be distributed to all CFOs for internal distribution shortly, and Finance is considering the survey findings for appropriate action.

The new year brings with it fresh opportunities. Learning more about risk management will greatly increase your chances of success to make the most of those opportunities. As luck would have it, Comcover has released new dates for its risk management courses that will aid you in doing just that.

Four learning pathways are available, all targeting different operational needs. Experienced facilitators lead the face-to-face workshops to review and discuss risk and how to best manage it during your daily work, whether it be operational or strategic. The program also offers e-learning and access to risk management resources for those unable to attend the workshops.

The 2020 Comcover Risk Management Education Workshop dates are:

Registrations to workshops and e-Learning courses are accessible via the Comcover Learning Centre

All enquiries contact Comcover on 1800 651 540 – Option 2 or Comcover@comcover.com.au