No functions have transferred
Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) section 17B applies where an entity (the old entity) has ceased to exist but none of its functions have been transferred to other entities.
Presentation within the annual report
The Finance Minister is enabled under subsection 17B(1) of the PGPA Rule to nominate an accountable authority of an entity (the nominated entity) to report for the old entity.
For this scenario, the nominated entity must prepare separate annual performance statements, annual financial statements and a separate annual report for the old entity, on the non-transferred functions.
Annual performance statements and annual report prepared for the old entity, under subsection 17B(2) of the PGPA Rule, must include all information required of the old entity (that is, as if it still existed). This means that the annual report, prepared for the old entity, must also include:
- the annual performance statements for the old entity
- audited annual financial statements for the old entity
- any other information required under the old entity’s enabling legislation.
These reports are to address the old entity’s non-transferred functions for the full reporting period.
The content of the annual performance statements and annual report will be dictated by the nature and significance of the functions performed, and length of time that the functions were performed by the old entity during the reporting period.
However, the accountable authority of the nominated entity has discretion in how the reports for the old entity are presented.
Example 3: Presenting of annual statements and report for an old entity
It may be helpful for users of annual reports (which incorporate annual performance statements and annual financial statements) if the annual report of the nominated entity presents the reports for the old entity in a separate section or appendix.
Regardless of the approach adopted, the statements and report for the old entity must be clearly distinguishable from those relating to the nominated entity.
Annual performance statements
The content of the annual performance statements and annual report will be dictated by:
- the nature and significance of the functions performed
- the length of time the functions were performed by the entity during the reporting period.
Where the functions were substantial and contributed in a significant manner to achieving the purposes of the entity before the entity ceases to exist, and were performed for the majority of the reporting period, it can be expected that the annual performance statements would report in a meaningful way on the performance of these functions.
The performance measures and targets relating to the functions performed should be used to report on the level of performance achieved up until the date the entity ceased to exist. The annual performance statements must also include an analysis of the factors that contributed to the old entity’s performance, as required by Item 3 of subsection 16F(2) of the PGPA Rule. It is expected that the annual report will also report in a substantive way on the operations of the old entity for the reporting period, up until the date it ceased to exist.
On the other hand, if the functions are relatively minor and only contributed in a minor way to the achievement of the old entity’s purposes, the annual performance statements and annual report could consist of a concise explanation to the effect—while still providing sufficient information to meet the requirements of the PGPA Rule.
Annual financial statements
The accountable authority of the nominated entity, under subsection 17B(2)(b) of the PGPA Rule, must prepare the annual financial statements for the old entity. These should be consistent with those the accountable authority of the old entity was required to prepare had that entity not ceased to exist.
The accountable authority of the nominated entity, under subsection 17B(2)(c) of the PGPA Rule, must give the annual financial statements to the Auditor-General as soon as practicable after they are prepared.
Some functions have transferred
Section 17C of the PGPA Rule applies where an entity (the old entity) has ceased to exist and some, but not all, of its functions have been transferred to one or more other entities. When this occurs, subsection 17C(1) of the PGPA Rule enables the Finance Minister to nominate the accountable authority of an entity (the nominated entity) to report on the non-transferred functions. The accountable authority of the nominated entity would report for the full reporting period in relation to the non-transferred functions.
While this scenario is likely to be rare, situations occasionally occur when an entity has ceased to exist even though not all of the functions it previously was responsible for have been transferred.
Presentation within the annual report
The annual performance statements, annual financial statements and annual report, under subsections 17C(2)(a)(ii) and (c)(ii) of the PGPA Rule, must not include information relating to the functions transferred. For the requirements relating to transferred functions, see Reporting for transferred functions.
While separate annual performance statements, annual financial statements and a separate annual report must be prepared for the old entity on the non-transferred functions, similar to the scenario dealt with by section 17B, the accountable authority of the nominated entity has discretion in how these statements and the report are presented.
Example 4: Presenting of annual statements and report of an old entity
It may be helpful for users of annual reports (which incorporate annual performance statements and annual financial statements) if the nominated entity presents one annual report with one set of annual performance statements that clearly separate and identify the targets and results of the old entity.
Regardless of the approach adopted, the statements and report for the old entity must be clearly distinguishable from those relating to the nominated entity.
For key management personnel (KMP) disclosure requirements where an entity has ceased to exist with some functions transferred, see Reporting for transferred functions.
Annual performance statements
The accountable authority of the nominated entity must, under subsection 17C(2)(a) of the PGPA Rule, prepare annual performance statements and an annual report for the old entity—consistent with the reports that the old entity was required to prepare had it not ceased to exist.
Similar to reporting under section 17B, the approach followed will be influenced by the significance of these functions. In practice, the remaining functions are likely to be minimal and entities should adopt a proportionate approach to the preparation and presentation of the required information.
Annual financial statements
The accountable authority of the nominated entity is required to prepare annual financial statements for the old entity in relation to those functions not transferred prior to the old entity ceasing to exist.
The accountable authority of the nominated entity must give the annual financial statements to the Auditor-General as soon as practicable after they are prepared.
All functions have transferred
Section 17D of the PGPA Rule applies where an entity (the old entity) has ceased to exist, and all of its functions have been transferred to one or more other entities.
Where an entity ceases to exist and all of its functions have been transferred, there is no requirement for annual performance statements, annual financial statements or an annual report to be prepared for the old entity.
For more information the reporting arrangements that apply in this situation, see Reporting for transferred functions.
