Public Management Reform Agenda
Readiness for implementation - 08
30 May 2014
Preparing for the Public Governance, Performance and Accountability
Act 2013 (PGPA Act)
There is a lot to be done over the next month before the commencement of the PGPA Act on
1 July 2014. This newsletter sets out the key developments over the next month and how this
will affect your preparation for 1 July. From a whole of Commonwealth perspective, the next
steps are:




amendments to the PGPA Act
transitional arrangements and consequential amendments to other
Commonwealth legislation
finalisation of the PGPA Rules
finalisation of Resource Management Guidance
PGPA Amendment Bill 2014
The PGPA Amendment Bill 2014 was introduced to Parliament on Thursday 29 May. The Bill
and the explanatory memorandum are now available on the Parliament website.
The Bill will primarily make minor and technical amendments to help clarify the operation of
the PGPA Act. However, if enacted, the Bill will include the following amendments to:
•
clarify definitions and technical requirements relating to entities, officials and
accountable authorities
•
add section 20A to clarify the power of accountable authorities to issue instructions to
officials in relation to the operation of the PGPA Act and the broader finance law
•
expand section 23 to provide explicit authority to the accountable authorities of
non-corporate Commonwealth entities to make commitments of relevant money
(adding to the power to enter into arrangements)
•
amend section 30 to limit the power to terminate officials to the accountable authority,
or a member of the accountable authority, of a corporate Commonwealth entity
•
amend planning, performance and reporting provisions to clarify responsibilities and
accountabilities, including the requirement that Commonwealth entities must provide
annual reports (under section 46) to their Minister by the 15th day of the fourth month
after the end of the reporting period (i.e. generally by 15 October)
•
amend requirements on how Ministers and officials bank and deal with relevant
money (under section 55) to clarify responsibilities for dealing with bankable and
unbankable money
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•
clarify the status of authorisations made in relation to borrowing, investments and
payments, and clarify how similar provisions in other legislation interacts with these
provisions
•
add new Part 4-1A to enable the Finance Minister to make instruments (relating to
procurements, grants, intelligence or security agencies and listed law enforcement
agencies) that are not subject to disallowance.
PGPA (Consequential & Transitional Provisions) Bill 2014 (PGPA (C&T) Bill)
The PGPA (C&T) Bill is likely to be introduced to Parliament next week. If enacted the Bill will:

amend the Financial Management and Accountability Act 1997 (FMA Act) – most
provisions in the FMA Act will be repealed from 1 July, however, the following
supplementary powers will be retained in a renamed act, the Financial Framework
(Supplementary Powers) Act 1997:
o to make, vary and administer arrangements for grants and programs specified in
the FMA Regulations (section 32B of the FMA Act)
o to form companies (section 39B of the FMA Act)
The schedules of the FMA Regulations (Schedules 1AA, 1AB and 1B) that support
these supplementary powers will also be retained.

repeal of the Commonwealth Authorities and Companies Act 1997 (CAC Act)

establish transitional arrangements to support the smooth transition from the FMA
and CAC Acts to the PGPA Act (e.g. to ensure that arrangements entered under the
power in section 44 of the FMA Act will be deemed to continue after 1 July as if they
had been made under section 23 of the PGPA Act)

replace references in more than 250 Commonwealth Acts to the FMA and CAC Acts
with the equivalent provisions in the PGPA Act

simplify enabling legislation where provisions of the PGPA Act cover a matter
previously dealt with in enabling legislation

amend enabling legislation to clarify which matters (and to what extent) are covered
by the PGPA Act and which matters (and to what extent) are covered by the enabling
legislation, such as in the case of planning and reporting, or disclosure of interest
arrangements where an entity may have additional obligations over and above those
imposed through the PGPA Act
Three appropriation modification bills will be introduced along with the PGPA (C&T) Bill. The
bills relate to Appropriation Acts passed by the Parliament in relation to the 2012-13 and
2013-14 financial years and, subject to their passage, the 2014-15 Appropriation Bills when
they become Acts. This recent appropriation legislation was prepared on the basis that the
FMA and CAC Acts are still in force, and rely on features of those Acts in terms of the
operation of appropriation arrangements. Without modification to this appropriation
legislation to recognise the commencement of the PGPA Act from 1 July 2014, there is a risk
that Commonwealth entities may not be able to access the amounts appropriated.
Amendments to the PGPA Rules
Finance is preparing the Government response to JCPAA report 441 on the PGPA Rules
development. Only 1 of 10 recommendations concerned the content of a rule (commitment of
relevant money).
Revised draft rules will be published on PMRA website and entities will be notified when
prepared.
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Resource Management Guidance
Finance is continuing to prepare new and updated guidance materials to help officials to use
and manage resources under the PGPA Act. Finalised and draft guidance is available on the
PMRA website. This guidance will be published on the Finance website from 1 July.
Timing for the legislative changes
The PMRA reforms depend on the enactment of the PGPA Amendment Bill 2014 and the
PGPA (C&T) Bill before the end of June. Given the Parliamentary schedule, the likelihood is
that this will be towards the end of June.
If the Bills are enacted:

Finance Minister will make the following PGPA rules:
o PGPA Rule (that will include: duties; audit committees; commitments of
relevant money; banking of relevant money; investment; insurance; fraud;
information for Parliament; waiver and set-off; receipts; and other CRF money).
o Commonwealth Procurement Rules (CPRs)
o Commonwealth Grants Rules and Guidelines (CGRGs)

Finance Minister will delegate his powers in the PGPA Act to accountable authorities of
non-corporate Commonwealth entities

Finance will finalise resource management guidance and other supporting tools and
make them available on the Finance website.
Drafts of the rules, delegations and guidance are available on the PMRA website.
Actions for all Commonwealth entities
When the legislative amendments are passed and the rules and other instruments are made,
then accountable authorities can finalise instructions to officials and sign off any changes to
internal delegations.
It is likely that accountable authorities will not be able to finalise these instructions and
delegations until the end of June. It is recommended that you publish your draft instructions
and delegations to allow staff time to consider and to set the basis for your change
management.
The following tables (based on information in Newsletter 07 – 23 May 2014) summarise the
actions necessary to prepare for 1 July and the information that is available to assist:
Action
Reason
To:
Review and
update internal
controls
• update internal
controls to reflect
the new sources
of authority in the
PGPA Act and
• identify
opportunities to
simplify internal
systems and
processes
Comments and supporting information and tools
on the PMRA website
The model Resource Management Instructions have been
renamed the model Accountable Authority Instructions to
better reflect the fact that the instructions will be issued under the
PGPA Act by your accountable authority.
Draft model instructions for:
 non-corporate Commonwealth entities
 corporate Commonwealth entities
Also to assist entities, the PMRA website has comparisons:
 FMA Act to PGPA Act
 CAC Act to PGPA Act
 PGPA Act from FMA Act & CAC Act
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Action
Inform staff
about the
reforms
(including any
changes to your
internal
controls and
delegations)
Reason
To increase
awareness of the
PGPA Act among
staff in your entity
who use or manage
public resources
Comments and supporting information and tools
on the PMRA website
The PMRA website has the following products to help inform staff
about the reforms:
 Intro to the PGPA Act video
 PGPA Act information posters for:
o all Commonwealth entities
o FMA Act agencies
o Commonwealth authorities
 PGPA Act training slides:
o Context for the reforms
o Key provisions of the PGPA Act
o Next steps for Commonwealth entities
Additional actions for non-corporate Commonwealth entities
Action
Reason
Comments and supporting information and tools
on the PMRA website
Prepare new
delegations
To delegate the new
powers in the PGPA
Act of accountable
authorities of
non-corporate
Commonwealth
entities
Draft Finance Minister’s delegations are available on the PMRA
website to assist non-corporate Commonwealth entities prepare
new internal delegations for your accountable authority to
delegate the powers in the PGPA Act.
To further assist, the PMRA website has a comparison between
current Finance Minister FMA Act delegations and the proposed
Finance Minister PGPA Act delegations
No changes will be required to most Commonwealth contracts
as most contracts do not refer to specific provisions in the FMA Act.
Review your
entity’s
contracts that
end after
1 July 2014
To identify any
contracts that refer
to specific
provisions of the
FMA Act that may
need to be amended
However, 2 types of contracts may need to be reviewed and
amended:
 where contractors are handling Commonwealth money and so
are allocated officials or outsiders under FMA legislation
 where contractors are conducting procurement processes on
behalf of the Commonwealth
It is recommended you seek legal advice if your entity has these
types of contracts.
Further information
For further information on the reform process, see the PMRA website
(www.pmra.finance.gov.au) or email us at pmra@finance.gov.au.
Please also contact us at pmra@finance.gov.au if there are areas of the new framework that
your entity would like further information or guidance about ahead of 1 July 2014.
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