- Performance targets and the impact of COVID
- Consultancy and Non-Consultancy Expenditure Reporting - final guidance released
- Audit Committee Questions and Answers - updated
Performance targets and the impact of COVID
A number of entities have enquired about adjusting performance targets in the 2020-21 annual performance statements to take account of the impacts of COVID on the entity’s performance.
Performance targets set out in 2020-21 PBSs and corporate plans should not be adjusted in the 2020-21 annual performance statements, unless a varied corporate plan was published to take account of the impacts of COVID. It is a requirement of the PGPA Rule (s16F) that an entity provides an analysis of the factors that may have contributed to its performance in the reporting year, including to changes to the environment in which it operated. Where a target was not met due to the impacts of COVID this should be explained in the analysis of the actual performance outcome in the 2020-21 annual performance statements.
COVID affected, and continues to affect, the operations of entities in many different ways. These effects could impact an entities operations and performance over the short or medium term, or may be even permanent in nature. Analysis of these factors would guide thinking around the resetting of performance targets, or the performance measures themselves, for publishing in the 2021-22 PBSs and corporate plans. If changes are made to existing performance measures, it is good practice to explain what has changed and why the changes have been made. This can be done through a footnote, or similar, to the performance tables in Section 2 of the 2021-22 PBS and through commentary in the 2021-22 corporate plan.
If you have questions in relation to this please get in contact with us at PGPA@finance.gov.au.
Consultancy and Non-Consultancy Expenditure Reporting – final guidance released
As reported in PGPA Newsletters 60 and 62, for the 2020-21 reporting period non-corporate Commonwealth entities are required to disclose in their annual reports the number of, and expenditure on, consultancy and non-consultancy contracts and additional information about those organisations receiving that expenditure. Finance has released a final version of the Consultancy and Non-Consultancy Reporting Guidance on the annual reports page on the Finance website and will be updated in RMG 135 shortly to assist non-corporate Commonwealth entities to make these disclosures.
If you have any questions about the new reporting requirements, please contact us at PGPA@finance.gov.au.
Audit Committee Questions and Answers - updated
Updates have been made to the Audit Committee Questions and Answers available on the Finance website based on the 2019-20 annual reports, to assist Commonwealth entities and companies to meet their reporting obligations.
The Audit Committee Questions and Answers can be found here.
If you have any feedback or queries in relation to the questions and answers please email us at PGPA@finance.gov.au.
Update to the Commonwealth Procurement Rules – effective 14 December 2020
The Finance Minister issued a media release on 7 December 2020 announcing the update to the Commonwealth Procurement Rules (CPRs) that came into effect on 14 December 2020.
The updated CPRs reflect the Australian Government’s commitment to sustainable procurement practices; emphasise the importance of paying suppliers on time, particularly small businesses; and includes a new Appendix A exemption that allows for the direct engagement of a Small and Medium Enterprise (SME) for procurements up to $200,000.
Entities should note that the changes to the CPRs are not retrospective. Only procurements that commenced on or after 14 December 2020 will need to apply the updated CPRs.
A copy of the CPRs and a table detailing the changes is available on the Commonwealth Procurement Rules webpage on the Finance website. Guidance on how to apply the new Appendix A exemption, including how to identify an SME can be found on the SME Exemption up to $200,000 page.
Regulator Reporting Requirements – upcoming changes
The Government is streamlining performance reporting requirements for Commonwealth entities with regulatory functions from the reporting period commencing 1 July 2021.
From 1 July 2021, the entities with regulatory functions will no longer be required to produce a standalone performance report under the 2014 Regulator Performance Framework (RPF). Instead, regulator performance reporting should be incorporated into an entity’s reporting processes as required under the PGPA Act and PGPA Rule.
This change will reduce duplication in regulator performance reporting. In addition, it will support greater transparency and accountability around regulator performance through ensuring it is included in a consistent location across all entities and in reports subject to the scrutiny of the Parliament and the Auditor General.
- For corporate plans prepared for reporting periods beginning on or after 1 July 2021, entities with regulatory functions should include performance information in respect to their regulatory functions.
- For annual reports prepared for reporting periods beginning on or after 1 July 2021, entities should reconcile performance outcomes in their annual performance statements.
There are a few circumstances where Commonwealth entities with regulatory functions are not required to prepare a corporate plan and/or annual performance statements under the PGPA Act. As the circumstances vary, it is recommended that these entities contact the Department of Finance at PGPA@finance.gov.au and the Department of the Prime Minister and Cabinet at Deregulation@pmc.gov.au.
Transitional arrangements and support
To support entities in reporting on regulator performance, the first year of reporting under these arrangements will be considered a transitional year. Entities may wish to continue existing processes to prepare an RPF report as a supplement to content in corporate plans and annual reports, for example. Further information to support entities in the transition, including case studies of entities already reporting on regulator performance in this way, will be made available in coming weeks on the PM&C website and circulated via this newsletter.
New regulator performance guidance
The Department of the Prime Minister and Cabinet and the Department of Finance are consulting closely with stakeholders to develop guidance to support better regulator performance reporting and measurement under PGPA Act processes.
The new guidance sets out a flexible, principles-based approach to reporting, and the Government’s overarching expectations for regulator performance. Entities with regulatory functions will be encouraged to establish their own tailored reporting metrics to meet these expectations.
Draft guidance will be circulated within government in coming weeks ahead of expected public consultation in April 2021 and release to support entities in settling how they will report on regulator performance from 1 July 2021.
Counter Fraud Investment Cases: Leading Practice Guide
Developing a convincing and compelling case for investment can be a tough task for government officials. This task can be particularly challenging when trying to make a case for investment within your agency to address the often hidden and underestimated problem of fraud.
Fraud can cause serious harm to government programs, industries, businesses and everyday Australians. However, due to the hidden nature of fraud, there is often limited evidence to support the vital investment needed to prevent it. Furthermore, the benefits achieved through investment in counter fraud can be hard to demonstrate. How do you quantify what you prevented? And what if your investment leads to you finding more fraud? Is that a good thing?
To help government officials deal with this problem, the Commonwealth Fraud Prevention Centre has launched a new guidance product: Counter Fraud Investment Cases Leading Practice Guide.
Developed in collaboration with Deloitte, this guide provides practical steps for developing counter fraud investment cases. These are:
- Step 1 – Confront challenges and resistance: discover what to do when evidence is limited, benefits might be hard to explain and costs don’t seem worth it. Also explore some common misconceptions you may be faced with.
- Step 2 – Understand and define your context: outline the need for counter fraud investment, collect the evidence you can to support it, estimate the financial cost and potential savings, understand the non-financial impacts of fraud and anticipate questions from executives.
- Step 3 – Develop a strategy: determine your entity’s current counter fraud maturity and risk appetite, the next step in your counter fraud journey and the short-term and long-term investment goals.
- Step 4 – Tell your story: share all of the above in a clear, simple and compelling story.
- Step 5 – Communicate your value: communicate the value of investment and demonstrate your impact.
While this guide is written for the counter fraud context, the principles and practical steps are relevant to all types of investment cases.
You can download a copy of this guide from the Commonwealth Fraud Prevention Centre’s website at CounterFraud.gov.au.
Tip of the Month
To support the Flipchart of PGPA Act Commonwealth entities and companies, a List of Commonwealth entities and companies is also available on the Finance website. The List provides additional information on the bodies in the Flipchart, including enabling legislation links and other key governance-related details; the type of body; financial classification; ABN; and importantly the accountable authority’s position title (e.g. Secretary, CEO, Chairperson etc.) as well as the relevant section of the legislation that identifies the accountable authority for the purposes of the PGPA Act. The latest List can be found here.