This page supports you, the accountable authority (Secretaries, Chief Executives and governing board), to fulfil the important role of governing your entity and contributing to the priorities and objectives of the government.
This guide outlines your duties and legal obligations under the PGPA Act, the actions you need to take, and the governance and accountability mechanisms you need to establish and maintain.
You are an official under the PGPA Act and subject to the general duties of officials as well as the additional duties as an accountable authority of a Commonwealth entity.
Your general duties as an accountable authority
The additional duties imposed on you as an accountable authority are to:
- properly govern your Commonwealth entity
- establish and maintain appropriate systems relating to risk management and oversight and internal controls
- encourage officials to cooperate with others to achieve common objectives
- take into account the effects of imposing requirements on others
- keep your minister and the Finance Minister informed.
Governing your entity
You are responsible for leading, governing and setting the strategic direction for your entity. Governing your entity includes:
- promoting the proper (efficient, effective, economical and ethical) use and management of the public resources for which you are responsible
- promoting the achievement of the purposes of your entity
- promoting the financial sustainability of your entity
- importantly, taking account of the effect of your decisions on public resources generally
- establishing appropriate systems of risk management and internal control, including measures directed at ensuring officials comply with the finance law (such as accountable authority instructions and delegations).
RMG-206 Model accountable authority instructions (AAIs) provides more guidance on establishing appropriate systems of risk management and internal control available under Tools and templates.
An accountable authority of a non-corporate Commonwealth entity must govern their entity in a way that is not inconsistent with relevant policies of the Australian Government. Finance has developed guidance to support accountable authorities, in consultation with the Australian Government Solicitor, available under Tools and templates.
An accountable authority of a corporate Commonwealth entity must comply with policies specified in a government policy order made by the Finance Minister, available under Tools and templates.
Proper use of public resources
To promote the proper use and management of public resources you can establish:
- decision-making processes for the proper use of public resources including robust decision-making and control processes for the expenditure of relevant money
- appropriate oversight and reporting arrangements for activities and to address the inappropriate use of resources by officials, including processes to ensure that all officials, disclose material personal interests.
These processes can provide an appropriate level of assurance in accordance with the duty to establish and maintain systems in relation to risk and control.
Achieving the purposes of your entity
To promote the achievement of the purposes of your entity you must:
- set out in your entity’s corporate plan the purposes of the entity and the activities the entity will engage in to achieve those purposes
- establish appropriate oversight and reporting arrangements for programs and activities in your entity.
Sustainability of your entity
To promote the financial sustainability of your entity you can establish processes or strategies to:
- conduct medium to long-term planning and budgeting
- accommodate resourcing and revenue fluctuations, including from appropriations made by the Parliament
- manage the risks, obligations and opportunities that are associated with your entity.
You are required to keep your minister and the Finance Minister informed of any significant decisions, including in relation to expenditure or investment.
Establishing an audit committee
To support good governance, you must ensure that your entity has an audit committee.
An audit committee can provide independent advice and assurance on the appropriateness of your entity’s accountability and control framework, including verifying and safeguarding the integrity of financial and performance reporting.
Supporting your ministers
To assist your minister in discharging their duties of accountability to parliament and the public you must:
- keep your minister informed of the activities of the entity and any subsidiaries
- provide your minister and the Finance Minister with any reports, documents and information they require about those activities
- notify your minister of any significant decision you make about the entity or any of its subsidiaries
- give your minister reasonable notice of any significant non-compliance with the finance law that may affect your entity or any of its subsidiaries, with a copy provided to the Finance Minister
- notify your minister if you become aware of any significant issue that has affected the entity or any of its subsidiaries.
You may also need to advise your minister of their responsibilities under the PGPA Act—for example, when your minister:
- approves a proposed expenditure
- is required to inform parliament about an entity’s involvement in a company.
Finance have developed a template for ministers to inform Parliament available under Tools and templates.
Engaging with risk and establishing controls
The PGPA Act provides you with the flexibility to establish systems of risk oversight and management and internal control that are appropriate for your entity.
Taking appropriate risks in fulfilling the purposes of your entity is consistent with careful and proper use and management of public resources.
The internal controls you introduce need to reflect your entity’s level of tolerance for risk and assist officials to comply with the finance law.
You will be required to exercise your judgement in managing risks and establishing controls, informed by consideration of various factors, including the
- size of your entity
- complexity of the policy environment
- proportionality of risks
- capability of your officials.
You will also need to review your internal controls periodically and when circumstances change.
System of risk oversight and management
An accountable authority of a non-corporate Commonwealth entity must, in accordance with the Commonwealth Risk Management Policy:
- endorse their entity’s risk management policy
- endorse their entity’s risk management framework
- define responsibility for managing risk in their entity, including:
- defining who is responsible for determining the entity’s appetite and tolerance for risk
- allocating responsibility for implementing the risk management framework
- defining roles and responsibilities in managing individual risks.
While the Commonwealth Risk Management Policy is not mandatory for corporate Commonwealth entities, it is good practice.
System of internal control
The PGPA Act requires you to establish and maintain an appropriate system of internal control for your entity. You can use accountable authority instructions to direct officials on the proper use and management of public resources including:
- delegating or authorising officials to exercise functions and powers
- developing a fraud control framework for your entity
- requiring, as a condition of employment, that officials of your entity comply with the finance law
- specifying sanctions (such as termination) that apply to officials for contravening that condition
- establishing contractual arrangements for consultants and contractors that reflect the requirements of the finance law.
You can establish internal controls for officials in written instructions on any matter relating to the finance law. For example, you can issue instructions on such things as:
- approving a commitment of relevant money
- official banking or dealing with relevant money
- debiting or crediting an appropriation.
RMG-206 Model accountable authority instructions (AAIs) provides more guidance on establishing appropriate systems of risk management and internal control, available under Tools and templates.
Delegations or authorisations
The accountable authority of a non-corporate Commonwealth entity can delegate many of the powers, functions and duties in the PGPA Act or PGPA Rule to officials.
A corporate Commonwealth entity can authorise officials to exercise functions and powers under its enabling legislation.
Role of the audit committee
Your audit committee can provide you with regular independent advice and assurance on the appropriateness of your entity’s systems of risk oversight and management and internal control.
Cooperating with others
Cooperation can involve anyone who has a stake in the outcomes of the government policy, or can help develop and/or implement the policy in the most effective, economical and efficient manner.
You are required to:
- make resource management decisions in the context of government acting as a coherent whole
- cooperate with others to achieve common objectives
- have regard to the burdens you impose on others.
These requirements are broader than simply making decisions in the best interests of your entity. You are required to engage with others in a manner that does not impose excessive burden or stifle the innovative capabilities of those you are cooperating with.
The PGPA Act requires you to:
- encourage officials to cooperate with others to achieve common objectives
- take a proportional, risk-based approach to imposing administrative burdens on other parties that work with government.
To meet these duties you could:
- take positive steps to build a culture that encourages officials to explore how your entity can collaborate with others in achieving common purposes
- articulate your entity’s risk appetite in terms that recognise the risks that arise from collaborative activities
- consider opportunities to streamline acquittal and reporting processes
- decide whether the compliance, red tape, cost and reporting burdens imposed by your entity are directed at promoting the proper use and management of public resources.
Improving performance reporting and accountability
The PGPA Act sets out requirements for performance planning and reporting to promote accountability to ministers, Parliament and the public for the use of public resources.
For each reporting period, you must prepare and publish:
- a corporate plan that sets out the purposes of your entity
- if you receive appropriations from the Parliament, Portfolio Budget Statements, which provide budgetary information related to your corporate plan and annual performance statements
- an annual report, which must be tabled in parliament and contain annual performance statements, that reports on the financial and non-financial performance of your entity.
The corporate plan is the principal planning document for your entity. Corporate plans must cover at least four reporting periods and address:
- the purposes of your entity
- the environment in which your entity will operate
- how your entity’s performance will be measured and assessed
- the capability of your entity, including the key strategies and plans that your entity will implement to achieve its purposes
- the risk oversight and management systems of your entity.
Unless otherwise provided by legislation, the corporate plan must be:
- given to your minister and the Finance Minister as soon as practicable after it is prepared and before it is published
- published on your entity’s website by the last day of the second month of the reporting period. For most entities, this will be by 31 August each year.
The Finance website has more guidance on preparing corporate plans available under Policies, legislation and guidelines.
Keeping accounts and records
You must ensure accounts and records are kept that:
- explain your entity’s performance in achieving its purposes and enable measurement and assessment of that performance
- record and explain your entity’s transactions and financial position.
After the end of each reporting year, you must prepare an annual report for your entity that includes:
- annual performance statements
- audited annual financial statements.
The annual report must meet the requirements for set out in the PGPA Rule.
Unless otherwise provided by legislation, you must provide your entity’s annual report to your Minister by the 15th day of the fourth month after the end of the reporting period for your entity (usually 15 October), for tabling in parliament by your Minister.
The Finance website has more guidance on preparing annual reports available under Policies, legislation and guidelines.
Annual performance statements
The annual performance statements provide an assessment of the extent to which your entity has succeeded in achieving its purposes. The statements must provide a direct acquittal of the performance criteria in your entity’s corporate plan and Portfolio Budget Statements for the reporting period.
The Finance website provides more guidance on preparing annual performance statements available under Policies, legislation and guidelines.
Audited annual financial statements
The PGPA Financial Reporting Rule sets out minimum requirements for all reporting entities in preparing financial statements.
This rule promotes consistency between entities’ financial statements and enables the preparation of the Australian Government’s consolidated financial statements.
The Finance website provides more guidance on preparing annual financial statements available under Policies, legislation and guidelines.
Other legal requirements
In addition to your duties and responsibilities under the PGPA Act and related legislative instruments, you also have duties and legal obligations under other Commonwealth legislation. More information can be found under Tools and templates.
The general duties in the PGPA Act do not limit the application of any other duties or liabilities in other laws relating to a person’s position or employment in a Commonwealth entity.
The PGPA Act is as an Australian law for the purposes of the Public Service Act 1999 and the Parliamentary Service Act 1999.
Penalties and sanctions
The PGPA Act does not contain penalties and sanctions. Penalties and sanctions for not meeting your duties are addressed in your employment arrangements or, for criminal conduct, in the Criminal Code Act 1995 or Crimes Act 1914.
The exception is the power in section 30 of the PGPA Act to remove an accountable authority or a member of an accountable authority of a corporate Commonwealth entity for failing to comply with their duties as an official. This provision is intended for use only if the entity’s enabling legislation or another legislative instrument is inadequate to address the breach.