Commonwealth Grants Policy Framework

The Australian Government grants policy framework applies to all non-corporate Commonwealth entities (entities) subject to the Public Governance, Performance and Accountability Act 2013 (PGPA Act). 

Commonwealth Grants Rules and Guidelines

The Commonwealth Grants Rules and Guidelines 2017 (CGRGs) establish the Commonwealth grants policy framework. The CGRGs contain the key legislative and policy requirements, and explain the better practice principles of grants administration.

CGRGs apply to grants administration performed by ministers, accountable authorities, officials and third parties who undertake grants administration on behalf of the Commonwealth.

It is important to note that it is the responsibility of officials to advise ministers of the requirements of the CGRGs.

The CGRGs do not place mandatory requirements on grantees.  Officials should consider the key principles when determining how much information to request from grantees when conducting grants administration.

The CGRGs are divided into two parts, to clearly separate mandatory requirements and better practice:

  • Part 1 outlines the mandatory requirements in regard to seven key principles for undertaking grants administration.  This allows officials to flexibly develop systems of control and internal practices/procedures that ensure grants administration (including decision-making by delegates and ministers) is conducted in a manner that is consistent with the principles in Part 2.
  • Part 2 explains how accountable authorities and officials should apply the seven key principles of grants administration.

What tools are available to help me implement the CGRGs?

Officials are required to develop grant opportunity guidelines for all new and revised grants (CGRGs paragraph 4.4). To assist with this, Finance has developed a whole of government suite of templates. These templates assist entities and Finance to quickly progress the risk assessment approach, as noted in the CGRGs. 

Other resources available to officials include:

A checklist is available to help when preparing a grant opportunity guidelines.

Flow diagram for grant guidelines

The flow diagram for grant guidelines outline some, but not all, of the key processes used when developing commonwealth grant opportunities for publication and decision makers.

Spending public money

The PGPA Act and Rule provides the overarching accountability framework for grants administration. Accountable authorities and officials must consider their obligations under the PGPA Act and Rule when undertaking grants administration (including section 16, Duty to establish and maintain systems relating to risk and control). Internal guidelines, operational guidance and grant opportunity guidelines must be consistent with these requirements, while including any additional specific processes.

Section 15 of the PGPA Act provides that an accountable authority must govern the affairs of the entity in a way that promotes proper use and management of public resources for which the accountable authority is responsible. When used in relation to the use or management of public resources ‘proper’ means efficient, effective, economical and ethical.

  • Section 15 is an overarching requirement applying to all aspects of an entity’s resource management, including grants administration.
  • Accountable authorities mainly discharge their responsibility under section 15 by ensuring that their entity has appropriate policies, procedures, guidelines and internal controls in place. Entities then undertake grants administration, proportionate to the risks identified and outcomes sought, ensuring that they are consistent with the resource management framework and CGRGs.
  • Accountable authorities of non-corporate Commonwealth entities are required to manage within the context of the Australian Government’s policy framework. The CGRGs are the core policy of the Australian Government relating to grants administration. Other policies which may be relevant for grants administration are discussed later in the CGRGs.

Before entering into an arrangement for the proposed commitment of relevant money there must be legal authority to support the arrangement.

The authority to enter into, vary or administer an arrangement can come from either:

  • section 23 of the PGPA Act, which provides the Commonwealth with the power to enter into, vary or administer an arrangement of relevant money that relates to the ordinary services and functions of government;
  • section 32B of the Financial Framework (Supplementary Powers) Act 1997 (FFSP Act), which provides the Commonwealth with the power to enter into, vary or administer an arrangement or a grant of financial assistance if it is specified in Schedule 1AA or Schedule 1AB to the FFSP Regulations; or
  • specific legislation. New or existing primary legislation administered by the relevant portfolio that provides the Commonwealth with the power to enter into, vary or administer an arrangement. This authority may be delegated to officials to enable them to enter into, vary or administer an arrangement.

In addition to the requirement for legal authority, accountable authorities and officials must also act in accordance with the PGPA Act and Rule, and the CGRGs, in relation to the proposed expenditure of relevant money.

The PGPA Rule requires that where accountable authorities or officials approve a proposed commitment of relevant money, the approval must be recorded in writing as soon as practicable after the approval is given.

The PGPA Act and Rule, and the CGRGs, include requirements that apply to Ministers. Officials must advise the relevant Minister on these requirements.

The PGPA Act requires that a Minister must not approve proposed expenditure of relevant money unless satisfied, after reasonable inquiries, that the expenditure would be a ‘proper’ use of relevant money. (See section 71 of the PGPA Act, Approval of Proposed Expenditure by a Minister). The terms of the approval must be recorded in writing as soon as practicable after the approval is given. ‘Proper’ when used in relation to the use or management of public resources means efficient, effective, economical and ethical.

More information on managing commonwealth resources is available here.

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© Department of Finance 22/03/2023