Abolition of an APS Non-corporate Commonwealth Entity

It is important to have a clear understanding of the date on which the APS non-corporate Commonwealth entity would cease to exist as this would inform the timeframe for conducting due diligence and change management activities, the movement of employees and transfer of resources to receiving entities, and meeting subsequent reporting requirements. 

Departments of state and parliamentary departments can be abolished through changes to the Administrative Arrangements Order (AAO), with the MoG change date of effect being the date the change to the AAO is made or the date specified in the AAO. Abolition of non-corporate Commonwealth entities which are established in legislation would require amendments either to their enabling primary legislation or the Public Governance, Performance and Accountability Rule 2014 (the PGPA Rule). Entities are encouraged to engage early with the Office of Parliamentary Counsel (OPC) and the Department of Finance (Finance) respectively.

If an entity was also created as an Executive Agency under the Public Service Act 1999 (PS Act), its portfolio department should establish an early contact with the Department of the Prime Minister and Cabinet (PM&C) in relation to abolishing that Executive Agency by an order of the Governor-General. The timing of the executive order process would also have an effect on the timing of legislative amendments to the PGPA Rule to cease the entity as a non-corporate Commonwealth entity under the Public Governance, Performance and Accountability Act 2013.

The entity to be abolished, their portfolio department and the receiving entity (if functions transfer to an entity other than their portfolio department) should identify those areas which may be immediately impacted following the abolition of the entity. Relevant policy and legal advice should be sought as early as possible in advance of the abolition date.

The PS Act gives the Commissioner the authority, under section 72, to move employees in and out of the APS following a MoG change. Where all functions of an APS entity being abolished transfer to another entity, it is likely that all of the abolished entity’s employees, including corporate employees, would move to the receiving entity. See People Management for more information.

Arrangements for terms and conditions for employees who transfer as the result of a MoG change are described in the PS Act and the Public Service Regulations 2023 and may depend on whether the receiving entity is an APS or a non-APS Commonwealth entity. See Pay and Conditions for more information.

Entities should discuss any issues relating to movement of employees and terms and conditions of their employment with the Australian Public Service Commission early in implementing a MoG change.

The entity to be abolished, in consultation with their portfolio department, should establish appropriate governance arrangements (for example, steering committee and/or working groups) to progress all tasks required to close the entity and transition their employees into the portfolio department (if they are the receiving entity). 

Where all functions of a non-corporate Commonwealth entity being abolished transfer to another entity, unspent annual appropriations for these functions are to be transferred to the receiving entity, subject to any decision by the Cabinet or Prime Minister.

If the transferred functions utilise a special appropriation and/or a special account, the relevant special appropriation and/or a special account are usually transferred to the receiving entity on the date of effect of the AAO change. 

The entity to be abolished must ensure any amounts held in their bank accounts (including by other Commonwealth entities on behalf of the entity being abolished) are remitted back to the Official Public Account (OPA) for re-crediting against the relevant appropriation in the Cash Management (CM) module of the Central Budget Management System (CBMS) before the entity is abolished. Where these amounts relate to functions being transferred, they can then be transferred to the receiving entity under section 75 of the PGPA Act. The entity to be abolished must close its bank accounts prior to its abolition date and advise both the OPA Administration and Banking Team in Finance and the Reserve Bank of Australia.  

Once the entity’s appropriation balances/data have been transferred/cleared out in the CM and other modules of CBMS (including for special appropriations if applicable), Finance will authorise the deactivation of the entity’s programs and appropriations in CBMS. 

If the entity is abolished part way through the financial year, Chapter 2, Part 2-3, Division 4 of the PGPA Rule sets out the reporting arrangements that may apply under various MoG change scenarios.

For example, under paragraph 17J(5) of the PGPA Rule, if the old entity has ceased to exist, or all of the functions of the old entity have transferred to one or more entities, then the reporting entity is required to prepare its annual financial statements, covering the functions transferred from the old entity, as if the old entity has been part of the reporting entity for the entire reporting period.

For advice on governance and financial management matters, please contact Finance.

The entity to be abolished should contact Property and Construction Division in Finance to work through any implications on existing property related contracts.

The abolition is likely to have implications for the entity’s procurement arrangements, including contracts, deeds, Memorandums of Understanding or other forms of agreement. In the first instance, please contact your entity’s (or your portfolio department’s) central procurement unit for assistance. The Procurement Policy Team in Finance can also provide advice to entities undertaking procurement processes that are affected by a MoG change.

For grants advice, please contact the Grants Policy Team in Finance. For advice on transfer of custody and ownership of information assets, please contact the National Archives of Australia.