Part I: Introduction to the
Commonwealth Resource
Management Framework
Resource Management and Budget Training
September 2015
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Enquiries
For enquiries or suggestions about this presentation, please contact training.team@finance.gov.au
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Resource Management and Budget
Training Overview
Part I: Resource
Management Framework
Part II: PGPA Act –
fundamentals for officials
Part III: Budget process
and reporting
• Commonwealth Resource
Management Framework
• Managing performance
• Budget context
• Risk management
• Budget Framework
• Australian system of
government
• Internal controls
• Planning and budgeting
• Commonwealth governance
arrangements
• Duties of officials
• Monitoring and reporting
• Using public resources
• Appropriations
• Spending relevant money
• PGPA Act
• Rules and policies
• Other relevant legislation
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Activity: Introduction to the Framework
Museum of Millennium Technology
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Resource Management Framework
Part I: Resource
Management Framework
Part II: PGPA Act –
fundamentals for officials
Part III: Budget process
and reporting
• Commonwealth Resource
Management Framework
• Managing performance
• Budget context
• Risk management
• Budget Framework
• Australian system of
government
• Internal controls
• Planning and budgeting
• Commonwealth governance
arrangements
• Duties of officials
• Monitoring and reporting
• Using public resources
• Appropriations
• Spending relevant money
• PGPA Act
• Rules and policies
• Other relevant legislation
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Why is the framework important?
We use and manage taxpayers money – must have regard
to the public interest
Accountability
Improved use of
resources
mitigation of risks
Reporting
and
evaluation
Planning
objectives
and
strategies
Implementing
and
monitoring
Budgeting
and
operational
planning
Planning
Improved
decision making
Resource
management cycle
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What are public resources?
Relevant property
• property owned or held by the Commonwealth
or a corporate Commonwealth entity
• real property, assets and intellectual property
Relevant money
• money held as cash or in a bank account
by the Commonwealth or a corporate
Commonwealth entity
Appropriations
• authority to draw money from
the Consolidated Revenue Fund
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Resource Management Framework
Constitution
PGPA Act
Appropriation
acts
Other
legislation
Policy
Legislative instruments
Entity internal controls
reporting and
evaluation
proper use appropriations
earned autonomy
accountability
planning objectives
and strategies
governance property management transparency
audit
efficiency PUBLIC RESOURCES spending
procurement performance grants management
implementing
and monitoring
risk management cooperation with others
commitments
budgeting and
operational planning
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Australian system of government
Part I: Resource
Management Framework
Part II: PGPA Act –
fundamentals for officials
Part III: Budget process
and reporting
• Commonwealth Resource
Management Framework
• Managing performance
• Budget context
• Risk management
• Budget Framework
• Australian system of
government
• Internal controls
• Planning and budgeting
• Commonwealth governance
arrangements
• Duties of officials
• Monitoring and reporting
• Using public resources
• Appropriations
• Spending relevant money
• PGPA Act
• Rules and policies
• Other relevant legislation
9
Tiers of government
Commonwealth
Government
6 state and
2 territory
governments
over 560 local
governments
10
Commonwealth powers
Commonwealth powers defined in Constitution (s51)
• trade and commerce
• taxation
• postal and
telecommunications
services
• foreign policy
• census and statistics
• weights and measures
• bankruptcy and
insolvency
• quarantine
• lighthouses, lightships,
beacons and buoys
•
•
•
•
•
•
fisheries
currency
copyright
marriage
immigration
defence
Most other law making powers reserved for states
• health
• education
• planning and development
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Commonwealth – state relations
Guided by
• Council of Australian Governments (COAG)
o Prime Minister, state premiers and territory chief ministers
o policy reforms requiring cooperation among governments
• Intergovernmental Agreement on Federal Financial
Relations
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Separation of Commonwealth powers
Constitution
Legislative
Legislative power to
makes the laws
exercised by
• Governor General
• House of
Representatives
• Senate
Executive
accountable to
the Parliament
Executive
Executive
accountable
administer theto
the
lawsParliament
made by
Parliament
Executive
Executive power
exercised by
• Governor General
as advised by
• Prime Minister
• Ministers and
Parliamentary
Secretaries
• officials in
Commonwealth
entities
Executive
appoint
the
Judiciary
Judiciary
interpret the
laws
Judiciary
Judicial power
exercised by
• High Court of
Australia
• Federal Court
• Family Court and
Federal Magistrates
service
Judges may be removed by the vote of both Houses of Parliament on
the grounds of proved misbehaviour or incapacity
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Commonwealth governance arrangements
Part I: Resource
Management Framework
Part II: PGPA Act –
fundamentals for officials
Part III: Budget process
and reporting
Non-corporate Commonwealth entities
• Commonwealth Resource
Management Framework
Corporate Commonwealth
Commonwealth
• Managing performance
entities • Budget context
companies
• Australian system of
government
• Internal controls
• Commonwealth governance
arrangements
• Using public resources
• Appropriations
• Risk management
Government business
• Budget
Framework
enterprises
(GBEs)
• Planning and budgeting
Public Non-Financial Corporations
• Duties of officials
• Monitoring and reporting
Public Financial Corporations
• Spending relevant money
• PGPA Act
• Rules and policies
• Other relevant legislation
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AAOs and portfolios
Agriculture
Attorney-Generals
Communications
Defence (Veterans’ Affairs)
Education & Training
Employment
Environment
Finance
Foreign Affairs and Trade
Health
Immigration and Border Protection
Industry and Science
Infrastructure and Regional
Development
Prime Minister and Cabinet
Social Services (Human Services)
Treasury
Each portfolio:
• at least one Department of State
• other Commonwealth entities
• may have Commonwealth companies
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Flipchart
www.finance.gov.au/flipchart
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Non-corporate Commonwealth entities
Part of the Commonwealth
• not legally and financially separate
• not a body corporate
• officials employed under the Public
Service Act or the entities’ enabling
legislation
Include
• Departments of State
• Parliamentary Departments
• other entities listed in legislation or
the PGPA Rule
17
Corporate Commonwealth entities
Legally and financially
separate from the
Commonwealth
• body corporates established by
legislation for a public purpose
• officials engaged under entities’
enabling legislation or
the Public Service Act
18
Commonwealth companies
Legally and financially
separate from the
Commonwealth
• Commonwealth controlled
companies established under
the Corporations Act 2001
• does not include subsidiaries
19
Commonwealth public sector
non-corporate Commonwealth entities
corporate Commonwealth entities
• all Commonwealth entities
and companies
Commonwealth
companies
20
General government sector
General government sector (GGS)
non-corporate Commonwealth entities
corporate Commonwealth entities
Commonwealth
companies
• most Commonwealth
entities and companies
• provide non-market public
services
• funded mainly through taxes
21
Public non-financial corporations and
Public financial corporations
General government sector (GGS)
non-corporate Commonwealth entities
corporate Commonwealth entities
Commonwealth
companies
Public non-financial corporations
Public financial corporations
Public non-financial
corporations e.g. NBN Co
Public financial corporations
e.g. Reserve Bank of Australia,
other borrowing authorities
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Government business enterprises
General government sector (GGS)
non-corporate Commonwealth entities
Commonwealth
companies
corporate Commonwealth entities
Government business
enterprises (GBEs)
Public non-financial corporations
• public sector
• provide market services
• for profit
Public financial corporations
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Commonwealth public sector
•High Court of Australia
General government
sector
96 non-corporate Commonwealth entities
• Departments of state
• Parliamentary departments
• Listed entities
bodies corporate deemed as non-corporate
• Australian Competition and Consumer Commission
• Australian Prudential Regulation Authority
• Australian Securities and Investments Commission
68 corporate Commonwealth entities
• 59 other corporate Commonwealth entities
15 Commonwealth companies
• 11 other Commonwealth companies
6 government business enterprises (GBEs)
Public
financial
corporations
Public
non-financial
corporations
• Defence Housing
Australia
• Airservices Australia
• Australian Hearing Services
• Australian Postal
Corporation
• Australian Reinsurance Pool Corp
• Coal Mining Industry (Long Service Leave Funding) Corp
• Export Finance and Insurance Corp
• Reserve Bank of Australia
•Australian National University
• ASC Pty Ltd
• Australian Rail Track Corp Ltd
• Moorebank Intermodal Co Ltd
• NBN Co Ltd
As at 1 August2015
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Establishing new
Commonwealth bodies
non-corporate
Commonwealth
entities
corporate
Commonwealth
entities
Commonwealth
companies
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Activity: Australia Post
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Appropriations
Part I: Resource
Management Framework
• Commonwealth Resource
Management Framework
Part II: PGPA Act –
fundamentals for officials
PGPA Act
Appropriation
acts
• Managing performance
• Budget context
Other
legislation
Entity internal controls
• Budget Framework
reporting and
evaluation
• Internal controls
• Commonwealth governance
arrangements
• Using public resources
implementing
• Duties of officials
Policy
Legislative instruments
• Risk management
• Australian system of
government
• Appropriations
Part III: Budget process
and reporting
Constitution
earned autonomy
planning objectives
and strategies
• accountability
Planning and budgeting
proper use appropriations
governance property management transparency
audit
• RESOURCES
Monitoringspending
and reporting
PUBLIC
efficiency
procurement performance
grants management
risk management cooperation with others
• Spending relevant money
and monitoring
commitments
budgeting and
operational planning
• PGPA Act
• Rules and policies
• Other relevant legislation
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Revenue and receipts
All revenues or moneys raised or received by the Executive
Government of the Commonwealth shall form one
Consolidated Revenue Fund (CRF)
s81 Constitution
General taxation
Non-tax revenue
Consolidated
Revenue Fund
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Accessing money in the CRF
Money can only be spent if
supported by an appropriation
made by law
s83 Constitution
Must be appropriated for the
purposes of the Commonwealth
s81 Constitution
Annual
appropriations
acts
Consolidated
Revenue Fund
Other acts
with special
appropriations
29
Annual appropriations bills
Government
services
for the ordinary annual
services of the government
e.g. Appropriations Bills
(No 1) & (No 3)
Parliamentary
services
for other purposes
e.g. Appropriations Bills
(No 2) & (No 4)
Appropriation
(Parliamentary
Departments)
Bills (No 1) & (No 2)
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Annual appropriations Acts
Government
services
for the ordinary annual
services of the government
e.g. Appropriations Acts
(No 1) & (No 3)
• departmental items
• administered items
for other purposes
e.g. Appropriations Acts
(No 2) & (No 4)
• any new administered outcomes (rare)
• non-operating costs (departmental or
administered)
• other payments
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Special appropriations
Special appropriations
established by legislation
other than annual
appropriation acts
• most unlimited in amount
Special accounts
established by
determination of
the Finance
Minister
established by
legislation
• some are limited by
amount
• some limited by time
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PGPA Act
Part I: Resource
Management Framework
• Commonwealth Resource
Management Framework
Part II: PGPA Act –
fundamentals for officials
PGPA Act
Appropriation
acts
• Managing performance
• Budget context
Other
legislation
Entity internal controls
• Budget Framework
reporting and
evaluation
• Internal controls
• Commonwealth governance
arrangements
• Using public resources
implementing
• Duties of officials
Policy
Legislative instruments
• Risk management
• Australian system of
government
• Appropriations
Part III: Budget process
and reporting
Constitution
earned autonomy
planning objectives
and strategies
• accountability
Planning and budgeting
proper use appropriations
governance property management transparency
audit
• RESOURCES
Monitoringspending
and reporting
PUBLIC
efficiency
procurement performance
grants management
risk management cooperation with others
• Spending relevant money
and monitoring
commitments
budgeting and
operational planning
• PGPA Act
• Rules and policies
• Other relevant legislation
33
Objects of the PGPA Act
non-corporate
Commonwealth
entities
corporate
Commonwealth
entities
• meet high standards of governance,
performance and accountability
• provide meaningful information to Parliament
and the public
• use and manage public resources properly
• work cooperatively with others to achieve
common objectives
Section
5
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PGPA Act applies to...
Accountable authorities
• person or body that is the head of a
Commonwealth entity
• typically secretaries and governing bodies
Officials
• officers, employees or members of an entity
• includes accountable authorities
• excludes Ministers and judges
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Duties of accountable authorities
Responsibilities and powers to promote high
standards of accountability and performance:
• responsible for the financial management of the entity
• meeting reporting requirements
General duties:
•
•
•
•
•
govern the entity
establish and maintain systems relating to risk and control
encourage cooperation and partnering
minimise red tape
keep the responsible Minister and Finance Minister
informed
Sections
15-19
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Duties of officials
PGPA Act requires officials of Commonwealth entities to
meet high standards of governance, performance and
accountability
Officials are required to:
•
•
•
•
act with care and diligence of a reasonable person
act honestly, in good faith and for proper purpose
not misuse position or information
disclose material personal interests
Sections
25-29
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Rules and policies
Part I: Resource
Management Framework
Part II: PGPA Act –
fundamentals for officials
PGPA Act
Appropriation
acts
• Commonwealth Resource
Management Framework
• Budget context
Entity internal controls
• Risk management
reporting and
• Budget Framework
planning objectives
proper use appropriations
evaluation
• Australian system of
government
• Internal controls
• Commonwealth governance
arrangements
• Using public resources
implementing
• Appropriations
Other
legislation
Policy
Legislative instruments
• Managing performance
• Duties of officials
Part III: Budget process
Constitutionand reporting
and strategies
accountability
•property
Planning
and budgeting
management transparency
earned autonomy
governance
audit
PUBLIC RESOURCES
efficiency
spending
•
Monitoring
and
reporting
procurement performance
grants management
and monitoring
risk management cooperation with others
• Spending relevant money
commitments
budgeting and
operational planning
• PGPA Act
• Rules and policies
• Other relevant legislation
38
Rules and instruments
Under the PGPA Act, Finance Minister has made:
• PGPA Rule 2014
• Commonwealth Procurement Rules (CPRs)
• Commonwealth Grants Rules and Guidelines (CGRGs)
• PGPA Financial Reporting Rule (FRR)
These rules and instruments apply to
some or all Commonwealth entities
and companies
39
PGPA Rule 2014
Establishes controls on:
•
•
•
•
•
•
•
debt recovery
disclosure of interests
records of approvals to commit relevant money
sets cash management requirements
performance requirements and corporate plans
information ministers must provide Parliament
other matters
PGPA Rule applies to
non-corporate
Commonwealth
entities
corporate
Commonwealth
entities
Commonwealth
companies
40
Commonwealth Procurement Rules (CPRs)
Apply to the entire process for procuring
goods and/or services
Combine good practice with Australia's
international obligations
CPRs apply to
All
non-corporate
Commonwealth
entities
Some corporate
Commonwealth
entities prescribed
in the PGPA Rule
41
Commonwealth Grants Rules and Guidelines
(CGRGs)
Objective to promote proper use of public
resources through collaboration with
non-government sector to achieve policy
outcomes
Establish:
• mandatory requirements
• better practice principles of grants
administration
CGRGs
apply to
All
non-corporate
Commonwealth
entities
42
PGPA Financial Reporting Rule (FRR)
Sets minimum financial reporting requirements for
reporting entities
Promotes consistency in financial reporting across
the Commonwealth
FFR applies to:
All
non-corporate
Commonwealth
entities
All
corporate
Commonwealth
entities
Some other
bodies and
statutory accounts
43
Government policies
non-corporate
Commonwealth
entities
Must act in a way that is not inconsistent
with the policies of the Australian
Government, e.g.
• whole-of-government arrangements for
goods and services
• on-time payment policy for small
business
Section
21
Section
corporate
Commonwealth
entities
Only required to comply with policies if
directed by a Finance Minister
government policy order
22
44
Other relevant legislation
Part I: Resource
Management Framework
• Commonwealth Resource
Management Framework
Part II: PGPA Act –
fundamentals for officials
PGPA Act
Appropriation
acts
• Managing performance
• Budget context
Other
legislation
Entity internal controls
• Budget Framework
reporting and
evaluation
• Internal controls
• Commonwealth governance
arrangements
• Using public resources
implementing
• Duties of officials
Policy
Legislative instruments
• Risk management
• Australian system of
government
• Appropriations
Part III: Budget process
and reporting
Constitution
earned autonomy
planning objectives
and strategies
• accountability
Planning and budgeting
proper use appropriations
governance property management transparency
audit
• RESOURCES
Monitoringspending
and reporting
PUBLIC
efficiency
procurement performance
grants management
risk management cooperation with others
• Spending relevant money
and monitoring
commitments
budgeting and
operational planning
• PGPA Act
• Rules and policies
• Other relevant legislation
45
Legislation relating to spending
Legislative authority to enter into arrangements or
authorise payments
non-corporate
Commonwealth
entities
corporate
Commonwealth
entities
• PGPA Act
• specific legislation, e.g. Social
Security (Administration) Act 1999
• Financial Framework
(Supplementary Powers) Act 1997
• enabling legislation
46
Legislation relating to spending
Financial Framework (Supplementary Powers) Act 1997
As a result of Williams v Cth (2012) additional
legislative authority required to support
spending on:
• grants
• payments of benefits or entitlements to a person
• sponsorships and scholarships for parties outside the
Commonwealth
• funding of stakeholder activities
• other kinds of expenditure that are not merely
‘running costs’ of an entity
47
Legislation relating to spending
Taxation
• Constitution provides Commonwealth taxes
should not apply to Commonwealth entities
• but the Government has applied GST to the
Commonwealth entities (A New Tax System (Goods
and Services Tax) Act 1999)
Compensation payments
• for acquiring land - Lands Acquisition Act 1989
48
Payments to states and territories
Federal Financial Relations Act 2009
General Revenue
Assistance
• payments to states that
can be used for any
purpose (e.g. GST)
National Specific Purpose
Payments (SPPs)
National Partnership
Payments
• annual and ongoing
payments for states for use
in key service delivery
sectors such as:
― health
― education
― skills and training
― disability services
― affordable housing
• payments to states for
specific purposes, to:
― to support projects
― facilitate major reforms
― reward jurisdictions that
deliver on nationally
significant reforms
49
Accountability legislation
Fiscal responsibility
• Charter of Budget Honesty Act 1998
Audit and assurance
• Auditor-General Act 1997
• Public Accounts and Audit Act 1951
50
Employment legislation
non-corporate
Commonwealth
entities
corporate
Commonwealth
entities
Commonwealth
companies
• Public Service Act 1999
• enabling legislation
• Corporations Act 2001
• State or territory framework
where the company is registered
51
Penalties and sanctions
Misuse of public resources
Employment sanctions
• Public Service Act 1999 or other relevant
employment legislation
Criminal sanctions
• Crimes Act 1914
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Activity
53
Wrap up
Part I: Resource
Management Framework
• Commonwealth Resource
Management Framework
• Australian system of
government
• Commonwealth governance
arrangements
• Appropriations
Part II: PGPA Act –
Part III: Budget process
fundamentals for officialsConstitution
and reporting
PGPA Act
Appropriation
acts
Legislative instruments
• Managing performance
• Internal controls
• Budget context
Entity internal controls
• Risk management
reporting and
evaluation
Other
legislation
Policy
• Budget Framework
earned autonomy
planning objectives
and strategies
• Planning and budgeting
accountability
proper use appropriations
governance property management transparency
audit
• Monitoring
and reporting
PUBLIC RESOURCES
spending
procurement performance
grants management
• Duties of officials
efficiency
risk management cooperation with others
• Using public
resources
commitments
implementing
• Spending relevant money
and monitoring
budgeting and
operational planning
• PGPA Act
• Rules and policies
• Other relevant legislation
54
Wrap up
Part I: Resource
Management Framework
Part II: PGPA Act –
fundamentals for officials
Part III: Budget process
and reporting
• Commonwealth Resource
Management Framework
• Managing performance
• Budget context
• Risk management
• Budget Framework
• Australian system of
government
• Internal controls
• Planning and budgeting
• Commonwealth governance
arrangements
• Duties of officials
• Monitoring and reporting
• Using public resources
• Appropriations
• Spending relevant money
• PGPA Act
• Rules and policies
• Other relevant legislation
55
Feedback and further information
Commonwealth Resource Management
Framework
• finance.gov.au/resource-management
Australian Government Budget
• budget.gov.au
Public Management Reform Agenda
• pmra.finance.gov.au
Feedback to Training.team@finance.gov.au
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