For CCEs, the purpose or outcome being sought will influence the type of arrangement. For example, the two most common types of arrangements are:
- procurement of goods or services to support entity 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)
- providing grants to others to achieve the purposes of the entity. Legislative authority to enter into arrangements involving the commitment of relevant money.
Legislative authority to enter into arrangements involving the commitment of relevant money
CCEs are legally separate from the Commonwealth and generally derive power to enter into arrangements involving the commitment of relevant money from their enabling legislation and from their body corporate nature.
An accountable authority of a CCE may be able to delegate, or authorise officials to exercise, the power to enter into arrangements under the CCE’s enabling legislation.
In deciding whether to devolve 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).
An accountable authority can meet these duties by giving directions or instructions to officials about the commitment of relevant money, as part of their entity’s systems of risk management and internal control. For example, an accountable authority could give officials:
- instructions on what is expected from officials to demonstrate the proper use of relevant money
- instructions to encourage officials to consider, where practicable
- entering into a contract where the services can be accessed by other entities
- cooperatively sharing an arrangement that allows the inclusion of other entities
- dealing with contracts and payments on behalf of other entities (in these cases, arrangements might also be established to reimburse the entity bearing the initial costs of such contracts).
Exercising the power to enter into arrangement
Officials who are able to enter into arrangements on behalf of a CCE must exercise the power in accordance with their general duties under sections 25 to 29 of the PGPA Act. In particular, they must exercise the power with the degree of care and diligence that a reasonable person would exercise in the same position (section 25 of the PGPA Act) and act honestly, in good faith and for a proper purpose (section 26 of the PGPA Act). This will include being suitably informed of and, where necessary, complying with:
- their entity’s purposes and program objectives
- the environment their entity operates in and the risk appetite of their entity
- any relevant instructions from their accountable authority
- any other relevant legislative requirements (for example, the requirement to keep a written record of an approval to commit relevant money in accordance with section 18 of the PGPA Rule or, where required, the Commonwealth Procurement Rules).
Recording an approval to commit relevant money
An official can provide verbal approval for a commitment of relevant money. However, an official must make a written record of the approval as soon as practicable after giving it (section 18 of the PGPA Rule).
If applicable, officials will also need to have regard to requirements for documenting approvals under Commonwealth Procurement Rules (CPRs), for example, recording the procurement requirements and process, how value for money was considered and achieved and approvals and decisions made. The CPRs apply to CCEs listed in section 30 of the PGPA Rule.
The accountable authority’s instructions may set out what type of record of an approval to commit relevant money is appropriate in the circumstances. In considering what form of record will be sufficient, consider:
- whether the record is proportionate to the significance, value, level of risk and sensitivities associated with the commitment, for example, when hiring a taxi to attend a meeting, the cab charge voucher and a receipt from the taxi driver could themselves be sufficient to record the approval, and
- who will rely on the record.
What is an appropriate record of an approval to commit relevant money?
The written record of an approval can:
- be paper or electronic (an email or within an information system where a delegate ‘presses a button’), provided it creates a record which can be retrieved (section 12 of the Electronic Transactions Act 1999)
- be a signed minute, a signed purchase order or purchase order request
- include the terms and/or basis of particular approvals
- include other relevant information, such as the parties involved and the costs of the proposed commitment.
For example, records of high-risk commitments could include, where appropriate:
- the key elements of the proposed commitment, such as the item, cost, parties, timeframes and any risks associated with the proposal
- any conditions on the approval, such as timing, or additional approvals and
- contingent liabilities, such as indemnities.
