Audience
The following guide is relevant to officials of non-corporate Commonwealth entities and corporate Commonwealth entities who:
have been delegated the power or authorised by their accountable authority to approve commitments of relevant money or enter into, vary and administer arrangements on behalf of the Commonwealth or a Commonwealth entity, and
are responsible for providing advice on the use of these powers to other officials or ministers.
Key points
Commonwealth entities commit and spend relevant money to achieve the purposes and objectives of their entity and the Australian Government.
Relevant money is money standing to the credit of any bank account of the Commonwealth or a corporate Commonwealth entity, or money that is held by the Commonwealth or a corporate Commonwealth entity.
A commitment of relevant money is an activity that creates an obligation to pay relevant money. A common way to commit relevant money is by entering into an arrangement. This includes an obligation that is contingent upon certain events occurring (for example, indemnities, guarantees and warranties).
An arrangement includes a contract, agreement, deed or understanding. An arrangement also includes any other instrument between parties that creates rights and obligations.
The need to enter into an arrangement can arise in a variety of circumstances, for example where an entity is:
- procuring goods or services to support its operations (such as, stationery, furnishings, information technology (ICT), consultants, electricity and other utilities, rent, travel, vehicles, subscriptions, contracts, attending conferences, legal, research and other professional services) for itself, or
- cooperating with third parties, to achieve purposes of the entity.
For corporate Commonwealth entities: An accountable authority of a corporate Commonwealth entity may be able to delegate, or authorise officials to exercise, the power to enter into arrangements under the corporate Commonwealth entities enabling legislation. In deciding whether to delegate relevant powers, an accountable authority must have regard to their duties in the PGPA Act, in particular:
- the general duties (sections 25, 26, 27, 28 and 29)
- the duty to promote the proper use of the money, i.e. the efficient, effective, economical and ethical use of the money (section 15)
- the duty to establish and maintain an appropriate system of risk oversight and management, and system of entity internal control (section 16)
- the duty to encourage cooperation to achieve common objectives, where practicable (section 17).
Key information to assist you
