Duty of care and diligence

An official is required to exercise their powers, perform their functions and discharge their duties with the same degree of care and diligence that a reasonable person would exercise if they were an official of the entity and occupied that position (section 25 of the PGPA Act).

This reasonable person test is similar to the common law reasonable person test. An official has to consider whether they have taken reasonable steps, given the circumstances, to assess the consequences of their actions. To take reasonable steps, the person needs to be appropriately informed, capable, aware of the law, and fair minded.

A reasonable person will weigh the following factors before acting:

evaluation methods

Examples of exercising care and diligence:

  • for banking relevant money or entering into an arrangement an official could demonstrate that they have considered and followed their entity's internal controls and any relevant guidance
  • in a high-risk activity or decision-making process such as engaging in significant business contracts with third parties, an official could exercise more caution to inform themselves of all the circumstances in order to make a reasonable decision (ASIC v Lindberg [2012] VSC 332).

Examples of not exercising care and diligence could be:

  • not taking reasonable steps to inform yourself about significant issues before making a decision
  • knowingly performing actions that are inconsistent with statutory obligations
  • undertaking an unfamiliar task without checking legislative requirements, related guidance and the entity's operational guidelines.

Case study

George is the manager of a high-value procurement process that involves his entity entering into a contract with a private sector company. While on the internet one night at home, George visits the blog of an environmental group that he often visits that details allegations of serious environmental breaches against the private sector company. The company has not been charged with any offence as yet, but the blog says that investigations are ongoing.

Appropriate action: Despite the nature and source of the information, George should investigate the allegations commensurate with the level of risk that this issue poses to his entity. George will also need to ensure that any particular course of action is not inconsistent with the Commonwealth Procurement Rules or pose unreasonable contractual risks to the entity. He should document his assessment, ensuring a clear audit trail, and communicate all relevant information to the accountable authority.

For APS employees, the APS Code of Conduct requires the employee to 'act with care and diligence in connection with APS employment' (section 13(2) of the Public Service Act 1999, the Parliamentary Service Code of Conduct in the Parliamentary Service Act 1999 has a similar provision).


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