Entity has not ceased to exist - some functions transferred
The Public Governance, Performance and Accountability Rule 2014 (PGPA Rule), under section 17F, details the reporting requirements where an entity has not ceased to exist and some of its functions are transferred.
Subsection 17F(1) of the PGPA Rule clarifies that this section applies where:
- some, but not all, of the functions of an entity (the old entity) have been transferred to one or more other entities
- the old entity has not ceased to exist
- the Finance Minister is reasonably satisfied that it is not practicable for the accountable authority of the old entity to report in relation to the function(s) that have not been transferred.
In this scenario, subsection 17F(1) of the PGPA Rule, enables the Finance Minister to nominate the accountable authority of an entity (that is, the nominated entity) to report on the non-transferred functions of the old entity. The nominated entity would report for the full reporting period in relation to the non-transferred functions.
Example 5: Reporting where an entity has not ceased but it is not practicable for it to report
An entity may have no staff and/or no funding during a period when legislation to formally abolish the entity or to transfer responsibility for functions to another entity is yet to be enacted. In such situations, section 17F of the PGPA Rule would apply.
In rare situations, an entity may continue to be legally responsible for certain functions, but it may not be practical for it to meet its reporting responsibilities for these functions.
Presentation within the annual report
For this scenario, separate annual performance statements, annual financial statements and a separate annual report must be prepared for the old entity on the non-transferred functions. However, the accountable authority of the nominated entity has discretion in how these are presented.
Example 6: Presenting information for an entity that has not ceased to exist
It may help users of annual reports (which incorporate annual performance statements and annual financial statements) if the nominated entity’s annual report includes a separate section with statements and a report for 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.
Annual performance statements and annual report
The Finance Minister may nominate an entity (the nominated entity) to prepare the annual performance statements and an annual report that reports on the performance and operations of the functions that remain the responsibility of the ‘old entity’, that is, the non-transferred functions.
To ensure no duplication of reporting occurs, subsection 17F(2) of the PGPA Rule indicates that where the Finance Minister nominates another entity (that is, in accordance with subsection 17F(1) of the PGPA Rule) the accountable authority of the old entity must not prepare annual performance statements, annual financial statements or an annual report for the old entity.
Annual financial statements
The accountable authority of the nominated entity must prepare annual financial statements for the old entity to report on the functions that have remained with the old entity (non-transferred functions).
Example 7: Australian National Preventive Health Agency Financial Statements
The essential functions of the Australian National Preventative Health Agency (ANPHA) were transferred to the Department of Health from 1 July 2014. ANPHA retains a dormant special account. Legislation to abolish ANPHA has not been passed, requiring ANPHA to continue to prepare annual financial statements. These statements, together with the auditor’s report, are included in the Department of Health’s annual report as an appendix.
The accountable authority must also give the annual financial statements to the Auditor-General as soon as practicable after they are prepared.
Entity has not ceased to exist - all functions are transferred
Section 17G of the PGPA Rule applies where all of the functions of an entity (the old entity) have been transferred to one or more other entities, but the old entity has not ceased to exist. Where this occurs, the old entity is not required to prepare the annual performance statements, annual financial statements or an annual report.
The reports and information that would otherwise have been reported for the old entity, must now be reported by the entity or entities to which the functions have been transferred in accordance with sections 17H–17J of the PGPA Rule.
For more information, see Reporting for transferred functions.
