An amendment to the Public Governance, Performance and Accountability Rule 2014 to introduce requirements for corporate Commonwealth entities and their Minister(s) in the administration of grants has been tabled and will only come into effect after the disallowance period, no earlier than 1 December 2020.
These changes are now in effect.
Division 6A of the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) imposes additional requirements on corporate Commonwealth entities that make grants, when a Minister is involved.
The PGPA Rule establishes the requirements for accountable authorities and officials of corporate Commonwealth entities as well as Ministers who approve or request the making of one or more CCE grants by or on behalf of a corporate Commonwealth entity. This Rule does not apply when the accountable authority (whether a Board, CEO or other) of the corporate Commonwealth entity is the decision maker and the Minister has no involvement in the making of the CCE grant.
It is important to note that Division 6A of the PGPA Rule does not apply to the grants of corporate Commonwealth entities unless a Minister is involved.
A CCE grant means an arrangement for the provision of financial assistance by (or on behalf of) a corporate Commonwealth entity under which relevant money is to be paid to a person or body that is not a Commonwealth entity. Some payments are not considered CCE grants under the PGPA Rule, such as a procurement, a payment of a benefit or entitlement under a law of the Commonwealth or an investment or loan.
In particular, Division 6A provides that when a Minister is involved:
- Corporate Commonwealth entities will be required to produce grant guidelines and provide appropriate written advice to Ministers before a Minister makes a decision on a CCE grant;
- Grant guidelines and grants awarded are to be published on GrantConnect;
- Ministers have the same “own electorate” and annual reporting requirements that apply to Ministers under the Commonwealth Grants Rules and Guidelines, when deciding to award a CCE grant within their own electorate or where that CCE grant was recommended not be made.
Please note that Division 6A of the PGPA Rule does not confer a general power for Ministers to approve a CCE grant. The legal authority of a Minister to make and/or approve a CCE grant must be found in other legislation.
Roles and responsibilities for the corporate Commonwealth entity
The PGPA Rule outlines requirements for accountable authorities and officials of corporate Commonwealth entities, where a Minister is involved in the making of one or more CCE grants by or on behalf of a corporate Commonwealth entity (see sections 25B and 25C).
There are three key areas of responsibility for corporate Commonwealth entities as follows:
- Preparing and publishing written guidelines (known as grant guidelines),
- Providing written notice to the relevant Minister who is to approve the making of a CCE grant,
- Publishing information on a CCE grant as approved by a Minister.
1. Preparing and Publishing written guidelines
The corporate Commonwealth entity must prepare grant guidelines, including:
- the purpose, expected outcomes and objectives of the CCE grant,
- the application process,
- the selection criteria and assessment process.
2. Provide written notice to the relevant Minister who is involved in making the CCE grant
Before a Minister approves or requests the making of a CCE grant, the Minister must first receive written notice from the corporate Commonwealth entity. Section 25C outlines the information to include in the written notice, including:
- a statement that the payment of financial assistance is a CCE grant subject to Division 6A;
- the legal or administrative basis for the Minister to approve the making of the CCE grant;
- an outline of the Minister’s reporting obligations for own electorate reporting (set out in section 25D) and annual reporting (set out in section 25E);
- an outline of the process used by the entity to select potential grant recipients, including the application process and criteria used to assess the applications for that CCE grant;
- a copy of the written (grant) guidelines for that CCE grant;
- an assessment of the CCE grant against those guidelines;
- an assessment that the CCE grant achieves value with relevant money;
- a list of applications, making clear which applications for the CCE grant satisfy;
- all of the criteria,
- some of the criteria, or
- none of the selection criteria within the grant guidelines.
- any other recommendations of the entity for the CCE grant.
Where an application does not satisfy any of the selection criteria for the CCE grant and there is no recommendation that the CCE grant not be made, the decision may be subject to the annual reporting requirements should the Minister decide to approve the making of the CCE grant (section 25E).
3. Publishing CCE grants made with Minister’s approval
The corporate Commonwealth entity must publish information about a CCE grant approved by a Minister on GrantConnect within 21 days after the day on which the CCE grant commences or is made by or on behalf of a corporate Commonwealth entity (Section 25F).
The information to be published about a CCE grant includes the name of the recipient, value, purpose and any other information relevant on the CCE grant, as well as whether there are confidentiality provisions relating to the CCE grant such as in a grant agreement.
Publishing on GrantConnect
- Grant guidelines must be published on GrantConnect prior to the grant opportunity being opened (section 25B), unless:
- the corporate Commonwealth entity or Minister decide that there is a specific policy reason to not publish the guidelines (section 25B(2)(b)); or
- the CCE grant is provided on a one-off or ad hoc basis (section 25B(3)). In this case, a corporate Commonwealth entity may still decide to publish guidelines on GrantConnect.
CCE Grant awarded (made)
- CCE grants awarded must be published on GrantConnect within 21 days after the day on which the grant commences (section 25F).
- There may be circumstances where it is determined that public reporting of particular information about a CCE grant may not be appropriate (25F(3):
- due to the Privacy Act 1988, other statutory requirements or the terms or conditions of a grant; or
- when information about the CCE grant could reasonably be expected to adversely affect the achievement of a government policy outcome.
In these circumstances, the corporate Commonwealth entity should publish as much as legally possible on GrantConnect.
Where a decision is made by the Minister and/or corporate Commonwealth entity to not publish the guidelines and/or the CCE grant awarded details on GrantConnect, the reasons for not publishing must be recorded in writing (section 25G).
The flow diagram for CCE grants outline some, but not all, of the key processes used when developing CCE grant for publication.
- PGPA RULE FACT SHEET for corporate Commonwealth entities
- PGPA RULE FACT SHEET for corporate Commonwealth entities
It is important to note that it is the responsibility of officials to advise ministers of their responsibilities under the PGPA Rule when a Minister is to approve the making of a CCE grant.
Roles and Responsibilities of Ministers
The PGPA Rule sets out a Minister’s responsibilities when they are involved in approving the making of one or more CCE grants by or on behalf of a corporate Commonwealth entity.
The responsibilities for Ministers when approving and/or requesting the making of CCE grants are:
- Before a CCE grant is approved
Before a Minister approves or requests a CCE grant be made, the Minister must first receive written advice from the relevant corporate Commonwealth entity (section 25C), assess the CCE grant by having regard to the matters included in that written notice as well as create a record of that assessment.
- Once a CCE grant is approved (Ministerial Reporting)
A Minister must give written advice to the Finance Minister, where a CCE grant is awarded in the following circumstances:
a) a Minister, who is a member of the House of Representatives, must report as soon as practicable after the making of a CCE grant where they approve or request the making of a CCE grant that relates to matters inside that Minister’s electorate (own electorate reporting)(section 25D); and
- The own electorate reporting requirements do not apply to Senators.
- Ministers are not required to report where the CCE grants are available Australia-wide, state-wide or across a region on the basis of a formula and any of those kind of CCE grants falls within the relevant Minister’s own electorate.
Examples of CCE grants that may be provided across a region by applying a formula could include the Murray-Darling Basin or drought, flood and/or bushfire affected areas.
b) a Minister (including Senators) who approves a CCE grant to be made by or on behalf of the corporate Commonwealth entity that was recommended not be made, must report by 31 March each year for decisions in the preceding calendar year (annual reporting) (section 25E).
- Where an application does not satisfy any of the selection criteria for the CCE grant and there is no recommendation that the CCE grant not be made, the decision may be subject to the annual reporting requirements should the Minister decide to approve the making of the CCE grant.
For “own electorate” reporting (section 25D), the following information is required to be provided by the Minister to the Finance Minister:
- details of the CCE grant;
- reasons the Minister approved the making of the CCE grant in the Minister’s electorate;
- if applicable, a statement that the CCE grant was made where the corporate Commonwealth entity recommended it not be made; and
- a copy of any correspondence between the Minister and the recipient of the CCE grant.
For annual reporting (section 25E), the following information is required to be provided by the Minister to the Finance Minister:
- details of the CCE grant;
- the Minister’s reasons for approving the making of the CCE grant.
The below links are to checklists and other reporting templates that Ministers may use when preparing written notice to the Finance Minister.
What tools are available to help me implement the PGPA Rule?
For corporate Commonwealth entities who are required to develop grant guidelines, Finance has developed a whole-of-government suite of templates. These templates will assist corporate Commonwealth entities when preparing and approving grants against grant guidelines and implementing grant agreements if needed.
- Grant Guideline Templates
- The GrantConnect website (contact email@example.com to create an account)
- Grant Agreement templates and user guides
If you have any questions or feel that your entity may be immediately impacted by these changes please contact the Grants team at firstname.lastname@example.org.
On 17 July 2020, the Minister for Finance made an amendment to the Public Governance, Performance and Accountability Rule (PGPA Rule), titled the Public Governance, Performance and Accountability Amendment (Grant Rules for Corporate Commonwealth Entities) Rules 2020.
This amendment to the PGPA Rule was required to give effect to a recommendation from the Australian National Audit Office that the Government amend the CGRGs to require that the advising, decision-making and reporting requirements that apply when a minister approves grant funding be extended to apply to corporate Commonwealth entities in situations where a minister (rather than the corporate Commonwealth entity itself) is the decision-maker (see Auditor-General Report No. 23 of 2019–20, Award of Funding under the Community Sport Infrastructure Program. Corporate Commonwealth entities are not subject to the Commonwealth Grants Rules and Guidelines (CGRGs) where grants are awarded under the authority of the entity itself.