Prescribing officials for non-corporate Commonwealth entities (RMG 212)

RMGs are guidance documents. The purpose of an RMG is to support PGPA Act entities and companies in meeting the requirements of the PGPA framework. As guides, RMGs explain the legislation and policy requirements in plain English. RMGs support accountable authorities and officials to apply the intent of the framework. It is an official’s responsibility to ensure that Finance guidance is monitored regularly for updates, including changes in policy/requirements.

Audience

This guide is for officials in non-corporate Commonwealth entities (NCEs) who have to advise their accountable authority on consultants and independent contractors (or employees of) prescribed as officials of an NCE under subsection 9(1) item 1A of the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule).

Key points

Ordinarily a consultant or independent contractor is not considered an official of a Commonwealth entity for Public Governance, Performance and Accountability Act 2013 (PGPA Act) purposes (see section 13 of the PGPA Act note, however, there can be exceptions in respect of entities listed in section 9 PGPA Rule and with particular listed entities). However, item 1A of the table in subsection 9(1) of the PGPA Rule prescribes a consultant or independent contractor (or employee of) [collectively described in this document as a ‘contractor’] as an official of an NCE if the requirements listed in item 1A are met. If the requirements in item 1A are met a contractor is an official of an NCE and can be delegated powers under the PGPA Act, a Rule made under it, or the Financial Framework (Supplementary Powers) Act 1997 (FF(SP) Act).

As a ‘prescribed official’ under the PGPA Rule the person:

is subject to the general duties of officials under the PGPA Act while they provide relevant services to the Commonwealth;
is subject to the systems of internal control in the entity, including any accountable authority instructions; and
requires a delegation of powers, duties or functions in the PGPA Act, a Rule made under it or the FF(SP) Act that they are required to exercise (with accompanying instructions if required).

When is it appropriate to delegate powers, duties or functions to a contractor prescribed as an official of an NCE?

An accountable authority would only rely upon item 1A of subsection 9(1) of the PGPA Rule where the accountable authority required the contractor to exercise delegated power (or perform a function or discharge a duty) under the PGPA Act, a Rule made under it, or the FF(SP) Act as part of the contractor’s services. This requirement is stated at item 1A(b) of subsection 9(1) as a necessary condition for the contractor to be classed as an official. Therefore, it is expected that an accountable authority would only rely upon item 1A of subsection 9(1) of the PGPA Rule to class a contractor as an official in instances where it is not practicable for an existing official of the entity to exercise the relevant powers, perform functions or discharge duties under the PGPA Act, a Rule made under it, or the FF(SP) Act.

A contractor is prescribed as an official of an NCE by the PGPA Rule where they are:

an independent contractor, consultant or an employee of an independent contractor or consultant;
engaged to provide services to a NCE and are required to exercise a power, perform a function or discharge a duty conferred by the PGPA Act a Rule made under it or the FF(SP) Act; and
capable of being identified by name by the accountable authority for the purposes of the PGPA Rule (item 1A of the table in subsection 9(1) of the PGPA Rule).

If, as part of their services, a contractor is not required to exercise a power or perform a function or discharge a duty conferred by the PGPA Act, a Rule made under it or the FF(SP) Act, they cannot be defined as an official under item 1A of subsection 9(1) of the PGPA Rule. Examples of tasks that generally do not require the exercise of powers or performance of functions or discharge of duties under the PGPA Act, a Rule made under it or the FF(SP) Act include:

making payments of relevant money at the direction of an official of the entity;
collecting relevant money under the direction of an official of the entity; and
a contracted individual from a salary packaging company transferring money from a Commonwealth entity’s bank account to a supplier that provides benefits to employees of the entity.

Where a person has custody of money as an agent of the Commonwealth, the money is ‘other CRF money’ that is subject to section 105 of the PGPA Act and section 29 of the PGPA Rule. This person does not need to be prescribed as an official of the relevant entity.

For more information on other CRF money, see RMG-303 Other CRF money.

The following scenarios cover some common arrangements entered into by NCEs to engage contractors to use and manage public resources. These scenarios help identify whether a contractor is exercising a power, performing a function or discharging a duty under the PGPA Act, a Rule made under it or the FF(SP) Act.

CASE STUIDIES

A contractor is engaged to collect fees from the public for a Commonwealth service. Under the direction of an official of the NCE, a contracted individual (an employee of the contractor) collects money for the Commonwealth on Commonwealth premises, and deposits it in the NCE’s bank account. The contracted individual does not exercise discretion about the fees to be paid and performs a processing task.

The services of the contracted individual do not require the exercise of powers under the PGPA Act a Rule made under it or the FF(SP) Act, and therefore cannot be prescribed as an official under item 1A of subsection 9(1) of the PGPA Rule. The contractor’s rights and obligations need to be specified in their contract.

An external property service provider makes payments to a property owner on behalf of a NCE (which leases its premises). The provider makes the payments by drawing on the NCE’s bank account, in accordance with the contractual arrangement between the Commonwealth and the provider.

Whether an employee of the property service provider exercises a power under the PGPA Act depends on whether that individual makes decisions in relation to the payments (that is, ‘administers’ an arrangement under section 23 of the PGPA Act) or merely processes payments.

If the individual performs processing tasks under instruction without making any decisions about the arrangement, the individual does not exercise a power under the PGPA Act or a Rule made under it.
If, as part of their services, the individual undertakes decision-making functions in relation to the arrangement, they may be administering the arrangement under section 23 of the PGPA Act (that is, exercising a power in the PGPA Act) and must be prescribed as an official in accordance with item 1A of subsection 9(1) of the PGPA Rule and need to be delegated the relevant PGPA Act power. In this case, the contract with the service provider needs to:

state that the relevant individual will be an official of the NCE;
specify the process for informing the individual of their obligations as an official;
specify the powers under the PGPA Act that the individual is to exercise; and
specify how the individual is to be identified by name (as required by the PGPG Rule) and the process by which the accountable authority is to be informed of any changes to the individual required to exercise the powers.

An NCE engages a contractor (an employment firm) to provide the services of a contracted individual. The individual is required, as part of their services, to exercise powers under the PGPA Act, a Rule made under it, or the FF(SP) Act. The contract between the contractor and the NCE needs to:

state that the individual will be an official of the NCE;
specify the process for informing the individual of their obligations as an official. This process may involve the NCE briefing the individual on their duties under the PGPA Act before the individual starts providing services to the NCE;
specify the powers under the PGPA Act, a Rule made under it or the FF(SP) Act that the individual is to exercise; and
specify how the individual is to be identified by name and the process by which the accountable authority is to be informed of any changes to the individual required to exercise the powers.

To exercise the relevant powers the individual will need to be delegated those powers.

An NCE engages a contractor to purchase equipment on behalf of the NCE. The NCE will be invoiced directly for the equipment.

The NCE provides the contractor with autonomy to decide what goods to purchase and to make the purchase. Contracted individuals (employees of the contractor) are therefore required, as part of their services, to enter into an arrangement under subsection 23(1) of the PGPA Act. The contracted individuals are also required to approve the commitment of relevant money under subsection 23(3) of the PGPA Act.

In this case, the arrangement between the contractor and the NCE:

states that the contracted individuals will be officials of the NCE;
specifies the process for informing the individuals of their obligations as officials. This process may involve the NCE briefing the individuals on their duties under the PGPA Act before the individuals start providing services to the NCE;
specifies that the contracted individuals are required to exercise powers under section 23 of the PGPA Act;
specifies how the contracted individuals are to be identified by name; and
specifies the process by which the Contractor will inform the accountable authority of any changes to the contracted individuals required to exercise powers.

How to prescribe a person as an official of an NCE?

Resources

Related resources including other guidance, links, glossary terms, publications, and relevant sections of the PGPA Act and Rule are located in the right-hand menu.

This guidance on prescribing officials for non-corporate Commonwealth entities was updated in October 2021. If you would like a track change version of these updates, please contact PGPA@finance.gov.au.