Checklist for abolishing or merging Commonwealth entities

The following table identifies issues to consider when abolishing or merging Commonwealth entities.

Issue Action required Other things to note or consider
Governance
General governance If government decides to abolish or merge a body, particularly a body listed on the flipchart, the body should advise Finance, by email, at governancepolicy@finance.gov.au of the details and timing of the change. When the body is abolished or merged, the body should advise Finance, by email, at AGOR@finance.gov.au to remove the body from the Australian Government Organisations Register.
Audit committee Make arrangements to terminate the contracts of the entity’s audit committee. The timing for abolishing the audit committee will largely depend on residual annual reporting obligations.
Legal
Legislation (including transitional legislation if required) Develop drafting instructions for the Office of Parliamentary Counsel (OPC) to abolish the entire Act or discrete parts to give effect to government decision. Talk to OPC about what obligations and requirements can be dealt with by the transitional legislation (e.g. annual reporting and compliance reporting obligations).
Appropriations Discuss with your Agency Advice Unit (AAU) in Finance how deal with residual appropriations, including whether they need to be abolished or transferred to another entity under section 75 of the PGPA Act. If a special account has been established through a determination of the Finance Minister (under section 72 of the PGPA Act), discuss how to abolish it with Finance. The abolition of special appropriations or statutory special accounts is addressed by the transitional legislation. Unused appropriations (including cash in bank accounts) need to be returned to the Official Public Account. Discuss this with your AAU in Finance.
Financial    
Banking arrangements Close bank accounts or transfer them to the entity taking on the activity, if required. There are different banking rules for corporate and non-corporate entities.
Investments Make sure all investments have been cashed out or will be novated to the Commonwealth or appropriate entity. If the Finance Minister has granted investment powers, discuss with Finance how to abolish the instrument.
Taxation Ensure that all taxation obligations are met or finalised, including completing Business Activity Statements.  
Novation of liabilities and assets Assets and liabilities can be novated through transitional legislation. For non-corporate entities, where there may be no transitional legislation, the portfolio department will generally take responsibility for residual assets and liabilities for and on behalf of the Commonwealth unless the entity is being merged with another entity. The Commonwealth has an ethical obligation to meet the liabilities of Commonwealth companies after they are abolished. The assets of Commonwealth companies, particularly wholly-owned Commonwealth companies, need to be returned to Commonwealth ownership.
Final annual report (including financial statements) If an entity is being abolished, discuss with the portfolio department whether it will prepare the entities final annual report. If an entity is being merged with another entity, the newly formed entity is responsible for the residual reporting for both merged entities. If a body within an entity is being abolished, the entity is responsible for any residual reporting obligations. Discuss proposed annual reporting arrangements with the Australian National Audit Office before finalising them.
Corporate
Transition of employees and office holders Close off all employee liabilities under the PS Act or the relevant employment contract. Consider how the payout or transfer of employee entitlements will be managed. Discuss the transfer of superannuation entitlements with Commonwealth Superannuation Corporation.
Archiving of information Either archive all relevant records or transfer them to the gaining body in accordance with the Archives Act.  

Contact for information on this page: GovernancePolicy@finance.gov.au

Last updated: 18 December 2015