SHARED ARRANGEMENT
AGREEMENT BETWEEN NSW
TREASURY AND PARTICIPATING
ENTITIES
Conformant with TPP 12-04: Guidance on Shared Arrangements and
Subcommittees for Audit and Risk Committees
1. Timing of the Agreement
This Shared Arrangement Agreement is to take effect from 1 July 2013.
2. Principal Department
I, the Secretary of the Treasury, recognise NSW Treasury as the principal department in this shared
arrangements Agreement. The principal department includes the Crown Finance Entity and
Industrial Relations, neither of which is a separate legal entity.
3. Participating Entities – where the Secretary, Treasury is CEO
I, the Secretary of the Treasury, am also Chief Executive Officer of the following entities. I have
determined that they will participate in a principal department-led shared arrangement led by
Treasury:
 State Rail Authority Residual Holding Corporation
 Liability Management Ministerial Corporation
 Lotteries Assets Ministerial Holding Corporation
 Electricity Assets Ministerial Holding Corporation
 Ports Assets Ministerial Holding Corporation
These agencies employ no staff. Furthermore, these agencies can deem any Treasury officer an
employee if it suits their purpose. In light of these characteristics I, the Secretary, have determined
that they will be treated as Treasury for the purposes of this Agreement.
The Chair may override this determination temporarily should an occasion arise where, in his view,
there is a conflict of interests or other unforeseen impediment.
4. Participating Entities – where the CEO is other than the Secretary, Treasury
The CEO of the Residual Business Management Corporation (RMBC) is a General Manager who
reports to the Treasurer. The officer filling the role of General Manager is also a Treasury
employee, which is allowable under RBMC’s establishing legislation.
The General Manager, RBMC, has agreed to opt into this Agreement. From 2013-14, RBMC’s
annual financial statements will be prepared by Treasury staff. The detail of the Agreement follows
from S.7 below.
The two Directors of the Port Botany and Port Kembla Lessor Companies also report to the
Treasurer and are also Treasury employees. The two Companies are controlled entities under the
Ports Assets Ministerial Holding Corporation, of which the Secretary is CEO, so they have agreed to
opt into this Agreement. From 2013-14 their annual financial statements will be prepared by
Treasury staff. The detail of the Agreement follows from S.7 below.
Treasury Shared Arrangements Agreement_July 2013
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5. Excluded entities
As at 1 July 2013, those entities in the Treasury Cluster not covered under this Agreement are:


Long Service Corporation (LSC) and
Treasury Corporation (TCorp)
Each of these has its own Audit & Risk Committee and associated arrangements. Also:


Hunter Valley Training Company Pty Ltd
Cobbora Holding Company Pty Ltd
As incorporated companies, these are not required to comply with TPP 09-051.
6. Purpose of the Agreement
The aim of a shared arrangement is to ensure that the compliance cost of implementing TPP 09-05
for agencies is commensurate with their risk profile and benefit.
Agencies are eligible to enter into shared arrangements where:
 an agency does not have a role that requires independence from other agencies; and
 an agency has total annual expenditure of less than $100 million, and the agency’s risk
profile does not warrant stand-alone arrangements.
7.
Terms of the Agreement
7.1
Chief Audit Executive (CAE)
Treasury’s Chief Audit Executive acts as CAE for all entities within this Agreement.
Appointments to the CAE role are by the Secretary, in consultation with the Audit & Risk
Committee. The CAE also provides secretariat support to the Committee.
The CAE has the authority to request and receive information from all entities covered by this
Agreement, as do Treasury’s internal auditors and the NSW Audit Office.
7.2
Chief Financial Officer (CFO)
Treasury’s Chief Financial Officer is authorised to undertake the CFO role, with all the
authorities that entails, in relation to all entities within this Agreement including RBMC and the
Ports Lessor Companies.
7.3
Rationale for shared agreement
This Agreement includes the Corporations listed in Section 3 (above) because, while most
are separate legal entities, the Secretary is the CEO of each one and they are staffed by
Treasury officers. The Secretary has determined that having the Treasury Audit & Risk
Committee, including the Treasury internal member, oversee all of them improves his line of
sight.
This Agreement includes the RBMC because, in the view of the General Manager:
 the Treasurer was seeking an increased level of oversight when he asked Treasury
to take over from the previous private sector management; and
 the entity is too small to warrant its own Committee; and
 following a transition phase during 2013, RBMC will be entirely staffed by Treasury
officers.
1
A full list of the entities that do come under this agreement can be found in Attachment 1.
Treasury Shared Arrangements Agreement_July 2013
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The Secretary agrees, after consultation with the Committee and the General Manager
RBMC, that under this agreement the Treasury Audit & Risk Committee will extend its
oversight to RBMC.
The Treasury internal member will not be a member of the Committee for the purpose of the
separate RBMC meetings. The RBMC and Ports Audit & Risk Committees will comprise all
of the independent members of the Treasury Committee, unless a conflict of interests
prevents this.
This Agreement includes the Ports Lessor Companies even though they are not required to
comply with TPP09-05 because, in the view of their joint Directors, there is sufficient reason
in that:
 they are wholly owned by the Ports Assets Ministerial Holding Corporation (PAMHC),
and their accounts consolidate into those of PAMHC
 the Secretary, Treasury is the CEO of PAMHC; and
 the Audit Office of NSW audits the Lessor Companies’ annual financial statements as
well as those of PAMHC.
The Secretary agrees, after consultation with the Committee and the Directors of the Ports
Lessor Companies, that under this agreement the Treasury Audit & Risk Committee will
extend its oversight to the Ports Lessor Companies. It is agreed that, when there is a need
to discuss the affairs of the Ports Lessor Companies, the Committee will convene without the
Treasury internal member.
7.4
Costs
The costs of the Committee, CAE and secretariat in the service of RBMC and the Ports
Lessor Companies will be met by NSW Treasury from its Audit & Risk allocation.
RBMC will pay for its own audits, investigations and other initiatives supporting this
Agreement. Should such activities be required in relation to the Ports Lessor Companies,
they too will cover the costs.
Treasury will recover the costs associated with the preparation of the accounts, and related
accounting services, for all participating entities which are active in the financial year.
The General Manager RBMC and the Directors of the Ports Lessor Companies may not vary
this Section, but the Secretary may at his discretion.
7.5
Meeting format and schedule
The Committee meets at least four times per year.
Separate, sequential, meetings with separate agendas will be held to discuss RBMC on the
same day as each regular Treasury meeting. The regular meeting will be formally closed
and a new one opened when there is RBMC business to be discussed. No RBMC business
will be dealt with during the main meeting, except in the case where RBMC is relevant to the
consolidated financial statements. In that case it will be treated like any other agency in the
same circumstances.
The General Manager RBMC will be notified at what time RBMC’s meeting is likely to
commence. He will be asked, during drafting of the Agenda, whether he has anything to
bring to the Committee’s attention. For its part, the Committee can request information or
presentation from the General Manager in the same way it can from Treasury management.
If there are no items on the RBMC Agenda, the Chair will make a final call for RBMC Other
Business immediately after closing the main meeting, while a quorum still exists.
Treasury Shared Arrangements Agreement_July 2013
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The same rules will apply to the Ports Lessor Companies as to RBMC, with the exception that
meetings will not necessarily be held each time there is a Treasury meeting. There will be a
Ports Lessor Companies meeting at least once a year, and otherwise as considered
necessary by the Directors, the Audit Office, the CFO and/or the Committee.
A schedule of meetings is compiled annually for the following year by the Audit & Risk
Branch.
7.6
Charters
Treasury retains its Audit & Risk Committee Charter unchanged, except that Annexure 1 has
been amended to reflect the new shared arrangement.
A new Participating Entities Committee Charter has been developed and forms part of this
Agreement. Its annual review is the responsibility of the Chair, supported by the Chief Audit
Executive in consultation with representatives of the other entities (in practice, the Director
Crown Asset & Liabilities Management, the Chief Financial Officer (if different), the General
Manager RBMC and the Directors of the Ports Lessor Companies or their delegate).
7.7
Composition and Terms of the Audit & Risk Committee
The Committee for each of the smaller entities comprises the same personnel as that of the
principal department. Members are selected from the DFS-monitored Prequalification List
and appointed by the Secretary in consultation with the CAE and Chair.
The Committee’s composition is in all respects compliant with TPP 09-05.
Any changes in membership will be approved and appointed by the Secretary. Members are
remunerated at the “large” agency rate, which is applicable to multi-entity shared
arrangements.
The terms and conditions under which the Treasury Audit & Risk Committee functions and
under which its members serve apply to its coverage of all entities in this Agreement. It is
understood that Treasury and its shared arrangements partners together constitute one
Committee for the purpose of calculating the total number of committees on which a member
can participate.
7.8
Conduct of the internal audit program
All shared arrangement entities, including RBMC and Ports Lessor Companies, will share
Treasury’s Chief Audit Executive and the internal auditors contracted by Treasury (at
present, EY). For the Ports Lessor Companies, Treasury will make reference to the
requirements of the Corporations Act in determining audit requirements.
Their audit programs will be governed by Treasury’s Audit Manual and by the Protocols
signed with Ernst & Young (now EY) in 2012.
However each entity will have its risks separately examined and if necessary recorded and
managed. There will also be regard to each entity in the development of each year’s internal
audit plan. This is not to say that each entity will appear in each year’s plan, however: the
key criterion for determining those audits which go ahead is risk, and it is applied across the
cluster (as defined in Annexure 1 of the Audit and Risk Committee Charter).
An entity which was financially active during the year, and which the Secretary judges can
afford to pay for its own audits, will do so on a cost recovery basis. The others will be
subsidised by Crown.
7.9
Reporting and continuous improvement
The Committee will report annually on its activities and findings to the Secretary, Treasury in
that capacity and in his capacity as CEO of the smaller agencies; and to the General
Treasury Shared Arrangements Agreement_July 2013
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Manager RBMC and Directors of the Ports Lessor Companies regarding its work in relation
to their respective entities.
The Committee complies with TPP 09-05 in performing an annual self-assessment (followed
by an improvement plan if needed) and assessments by the Chair of each member. The
Secretary formally assesses the Chair’s performance at least once per year, having regard
to all of the entities for which he is CEO.
The General Manager, RBMC and the Directors of the Ports Lessor Companies (or their
delegate) will be invited at least annually to meet with the Chair to discuss the performance
of the Chair, all members and the audit function in general, plus any other matters of
concern, in relation to their respective entities.
7.10
External audit
The Audit Office is responsible for the external audit of all agencies in the cluster.
Crown staff, the CAE and the Chair will liaise with the Audit Office on behalf of each of the
shared arrangements agencies. From 1 July 2013 this includes RBMC and the Ports Lessor
Companies, whose financial statements from that time are compiled and overseen by Crown
staff and management, with the General Manager and Audit & Risk Committee as quality
assurance.
7.11
Attestations
Each agency entering into a shared agreement is required to make an attestation to Treasury
in accordance with TPP 09-05 and to make a declaration in its annual report.
7.12
Dispute resolution
Disputes should be reported to the Chief Audit Executive, who must work with the Chair to
restore an effective working relationship and resolve the dispute by way of open
negotiations.
If they cannot be otherwise resolved, disputes may be escalated to the Secretary, or as a
last resort to another central agency for mediation or other resolution.
8.
Determination of Secretary regarding Corporations of the Treasury Cluster
I, the Secretary of the Treasury, have determined on behalf of the following Corporations, of
each of which I am the Chief Executive Officer, that they will opt into a principal departmentled shared arrangements agreement with Treasury on the terms set out in this agreement.
o State Rail Authority Residual Holding Corporation
o Liability Management Ministerial Corporation
o Lotteries Assets Ministerial Holding Corporation
o Electricity Assets Ministerial Holding Corporation
o Ports Assets Ministerial Holding Corporation
The Long Service Corporation and the Treasury Corporation have their own arrangements
and are excluded from this Agreement.
…………………………………………………..
Philip Gaetjens
Secretary and Chief Executive Officer
Date:
Treasury Shared Arrangements Agreement_July 2013
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9.
Entry of Residual Business Management Corporation into this Agreement
I, the General Manager of the Residual Business Management Corporation (RBMC) agree to
opt into a principal department-led shared arrangements agreement with Treasury, on the
terms set out in this agreement.
…………………………………………………..
[Name]
General Manager
Date:
10.
Entry of Port Botany and Port Kembla Lessor Companies into this Agreement
We, the sole Directors of the Port Botany and Port Kembla Lessor Companies, agree to opt
into a principal department-led shared arrangements agreement with Treasury, on the terms
set out in this agreement.
…………………………………………………..
[Name]
Director
Date:
…………………………………………………..
[Name]
Director
Date:
11.
Approval of Secretary to a Principal Department-led Shared Arrangements Agreement
with the conditions described in this document
I, the Secretary of the Treasury, approve this Agreement and the terms described herein.
…………………………………………………..
Philip Gaetjens
Secretary
Date:
Treasury Shared Arrangements Agreement_July 2013
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Attachment 1
Complete list of Entities covered by this Agreement
Where Secretary is CEO






Treasury (principal department)
State Rail Authority Residual Holding Corporation
Liability Management Ministerial Corporation
Lotteries Assets Ministerial Holding Corporation
Electricity Assets Ministerial Holding Corporation
Ports Assets Ministerial Holding Corporation
Where CEO/Director has opted in to the Agreement



Residual Business Management Corporation
Port Botany Lessor Company
Port Kembla Lessor Company
The Treasury Audit & Risk Committee also monitors the Total State Sector Accounts.
Organisations which are within the Treasury Cluster but out of scope of this Agreement:
Treasury Corporation
Long Service Corporation
Cobbora Holding Company Pty Ltd
Hunter Valley Training Company Pty Ltd
Treasury Shared Arrangements Agreement_July 2013
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