Commonwealth: Public Governance, Performance and Accountability Act 2013 (Cth)

Public Governance, Performance and Accountability Act 2013 No. 123, 2013 Compilation No. 4 Compilation date: 23 August 2017 Includes amendments up to: Act No. 92, 2017 Registered: 28 August 2017 About this compilation This compilation This is a compilation of the Public Governance, Performance and Accountability Act 2013 that shows the text of the law as amended and in force on 23 August 2017 (the compilation date). The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law. Uncommenced amendments The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law. Application, saving and transitional provisions for provisions and amendments If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes. Editorial changes For more information about any editorial changes made in this compilation, see the endnotes. Modifications If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law. Self‑repealing provisions If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes. Contents Chapter 1—Introduction Part 1‑1—Introduction Division 1—Preliminary 1 Short title 2 Commencement 3 This Act binds the Crown 4 This Act extends to things outside Australia Division 2—Objects of this Act 5 Objects of this Act Division 3—Guide to this Act 6 Guide to this Act Part 1‑2—Definitions Division 1—Guide to this Part 7 Guide to this Part Division 2—The Dictionary 8 The Dictionary Chapter 2—Commonwealth entities and the Commonwealth Part 2‑1—Core provisions for this Chapter Division 1—Guide to this Part 9 Guide to this Part Division 2—Core provisions for this Chapter 10 Commonwealth entities 11 Types of Commonwealth entities 12 Accountable authorities 13 Officials Part 2‑2—Accountable authorities and officials Division 1—Guide to this Part 14 Guide to this Part Division 2—Accountable authorities Subdivision A—General duties of accountable authorities 15 Duty to govern the Commonwealth entity 16 Duty to establish and maintain systems relating to risk and control 17 Duty to encourage cooperation with others 18 Duty in relation to requirements imposed on others 19 Duty to keep responsible Minister and Finance Minister informed Subdivision B—Rules about general duties of accountable authorities 20 Rules about general duties of accountable authorities Subdivision BA—Accountable authority instructions 20A Accountable authority instructions Subdivision C—Application of government policy 21 Non‑corporate Commonwealth entities 22 Corporate Commonwealth entities Subdivision D—Special provisions applying to accountable authorities of non‑corporate Commonwealth entities 23 Power in relation to arrangements and commitments 24 Power to establish advisory boards Division 3—Officials Subdivision A—General duties of officials 25 Duty of care and diligence 26 Duty to act honestly, in good faith and for a proper purpose 27 Duty in relation to use of position 28 Duty in relation to use of information 29 Duty to disclose interests Subdivision B—Provisions relating to general duties of officials 30 Termination—accountable authority, or member of accountable authority, contravening general duties of officials 31 Interaction between Subdivision A and other laws Subdivision C—Officials to whom the Public Service Act or Parliamentary Service Act applies 32 Officials to whom the Public Service Act or Parliamentary Service Act applies Part 2‑3—Planning, performance and accountability Division 1—Guide to this Part 33 Guide to this Part Division 2—Planning and budgeting 34 Key priorities and objectives of the Australian Government 35 Corporate plan for Commonwealth entities 36 Budget estimates for Commonwealth entities Division 3—Performance of Commonwealth entities 37 Records about performance of Commonwealth entities 38 Measuring and assessing performance of Commonwealth entities 39 Annual performance statements for Commonwealth entities 40 Audit of annual performance statements for Commonwealth entities Division 4—Financial reporting and auditing for Commonwealth entities 41 Accounts and records for Commonwealth entities 42 Annual financial statements for Commonwealth entities 43 Audit of annual financial statements for Commonwealth entities 44 Audit of subsidiary's financial statements Division 5—Audit committee for Commonwealth entities 45 Audit committee for Commonwealth entities Division 6—Annual report for Commonwealth entities 46 Annual report for Commonwealth entities Division 7—Australian Government financial reporting 47 Monthly financial reports 48 Annual consolidated financial statements 49 Audit of annual consolidated financial statements Part 2‑4—Use and management of public resources Division 1—Guide to this Part 50 Guide to this Part Division 2—Funding and expenditure 51 Making amounts appropriated available to Commonwealth entities 52 Commitment or expenditure of relevant money Division 3—Banking 53 Banking by the Commonwealth 54 Banking by corporate Commonwealth entities 55 Banking or dealing with relevant money Division 4—Borrowing 56 Borrowing by the Commonwealth 57 Borrowing by corporate Commonwealth entities Division 5—Investment 58 Investment by the Commonwealth 59 Investment by corporate Commonwealth entities Division 6—Indemnities, guarantees, warranties and insurance 60 Indemnities, guarantees or warranties by the Commonwealth 61 Indemnities, guarantees or warranties by corporate Commonwealth entities 62 Insurance obtained by corporate Commonwealth entities Division 7—Waivers, modifications of payment terms, set‑offs and act of grace payments 63 Waiver of amounts or modification of payment terms 64 Setting off amounts owed to, and by, the Commonwealth 65 Act of grace payments by the Commonwealth Division 8—Special provisions applying to Ministers and certain officials Subdivision A—Gifts of relevant property 66 Gifts of relevant property Subdivision B—Liability of Ministers and certain officials for unauthorised gifts and loss 67 Liability for unauthorised gifts of relevant property 68 Liability for loss—custody 69 Liability for loss—misconduct 70 Provisions relating to liability of Ministers and officials Division 9—Special provisions applying to Ministers only 71 Approval of proposed expenditure by a Minister 72 Minister to inform Parliament of certain events Part 2‑5—Appropriations Division 1—Guide to this Part 73 Guide to this Part Division 2—Appropriations relating to non‑corporate Commonwealth entities and the Commonwealth 74 Receipts of amounts by non‑corporate Commonwealth entities 74A Recoverable GST for non‑corporate Commonwealth entities 75 Transfers of functions between non‑corporate Commonwealth entities 76 Notional payments and receipts by non‑corporate Commonwealth entities 77 Repayments by the Commonwealth Division 3—Special accounts 78 Establishment of special accounts by the Finance Minister 79 Disallowance of determinations relating to special accounts 80 Special accounts established by an Act Part 2‑6—Cooperating with other jurisdictions Division 1—Guide to this Part 81 Guide to this Part Division 2—Cooperating with other jurisdictions 82 Sharing information with other jurisdictions 83 Auditing by State and Territory Auditors‑General Part 2‑7—Companies, subsidiaries and new corporate Commonwealth entities Division 1—Guide to this Part 84 Guide to this Part Division 2—Companies and subsidiaries Subdivision A—The Commonwealth's involvement in companies 85 The Commonwealth's involvement in companies Subdivision B—Subsidiaries of corporate Commonwealth entities 86 Subsidiaries of corporate Commonwealth entities Division 3—New corporate Commonwealth entities 87 Establishing new corporate Commonwealth entities Chapter 3—Commonwealth companies Part 3‑1—General Division 1—Guide to this Part 88 Guide to this Part Division 2—Core provisions for this Chapter 89 Commonwealth companies 90 Wholly‑owned Commonwealth companies Division 3—Special requirements for wholly‑owned Commonwealth companies 91 Duty to keep the responsible Minister and Finance Minister informed 92 Audit committee 93 Application of government policy Part 3‑2—Planning and accountability Division 1—Guide to this Part 94 Guide to this Part Division 2—Planning and budgeting 95 Corporate plan for Commonwealth companies 96 Budget estimates for wholly‑owned Commonwealth companies Division 3—Reporting and accountability 97 Annual reports for Commonwealth companies 98 Auditor of Commonwealth companies 99 Audit of subsidiary's financial statements Chapter 4—Rules, delegations and independent review Part 4‑1—The rules Division 1—Guide to this Part 100 Guide to this Part Division 2—The rules 101 The rules 102 Rules relating to the Commonwealth and Commonwealth entities 103 Rules relating to the Commonwealth and non‑corporate Commonwealth entities 104 Rules relating to the Commonwealth Superannuation Corporation 105 Rules in relation to other CRF money Part 4‑1A—Other instruments Division 1—Guide to this Part 105A Guide to this Part Division 2—Instruments relating to procurement 105B Instruments relating to procurement Division 3—Instruments relating to grants 105C Instruments relating to grants Division 4—Instruments relating to intelligence or security agencies or listed law enforcement agencies 105D Instruments relating to intelligence or security agencies or listed law enforcement agencies Part 4‑2—Delegations Division 1—Guide to this Part 106 Guide to this Part Division 2—Delegations 107 Finance Minister 108 Treasurer 109 Finance Secretary 110 Accountable authority Part 4‑3—Independent review Division 1—Guide to this Part 111 Guide to this Part Division 2—Independent review 112 Independent review Endnotes Endnote 1—About the endnotes Endnote 2—Abbreviation key Endnote 3—Legislation history Endnote 4—Amendment history An Act about the governance, performance and accountability of, and the use and management of public resources by, the Commonwealth, Commonwealth entities and Commonwealth companies, and for related purposes Chapter 1—Introduction Part 1‑1—Introduction Division 1—Preliminary 1 Short title This Act may be cited as the Public Governance, Performance and Accountability Act 2013. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms. Commencement information Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 5 and anything in this Act not elsewhere covered by this table 1 July 2013. 1 July 2013 2. Sections 6 to 112 A single day to be fixed by Proclamation. 1 July 2014 However, if the commencement of the provision(s) is not fixed by Proclamation before 1 July 2014, the provision(s) commence on 1 July 2014. (see F2014L00848) Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act. (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act. 3 This Act binds the Crown This Act binds the Crown in right of the Commonwealth. 4 This Act extends to things outside Australia This Act extends to acts, omissions, matters and things outside Australia. Division 2—Objects of this Act 5 Objects of this Act The objects of this Act are: (a) to establish a coherent system of governance and accountability across Commonwealth entities; and (b) to establish a performance framework across Commonwealth entities; and (c) to require the Commonwealth and Commonwealth entities: (i) to meet high standards of governance, performance and accountability; and (ii) to provide meaningful information to the Parliament and the public; and (iii) to use and manage public resources properly; and (iv) to work cooperatively with others to achieve common objectives, where practicable; and (d) to require Commonwealth companies to meet high standards of governance, performance and accountability. Division 3—Guide to this Act 6 Guide to this Act Overview This Act is mainly about the governance, performance and accountability of Commonwealth entities. It is also about: • the use and management of public resources by the Commonwealth and Commonwealth entities; and • the accountability of Commonwealth companies. Many of the terms in this Act are defined. The Dictionary in section 8 contains a list of every term that is defined in this Act. Chapter 2—Commonwealth entities and the Commonwealth Part 2‑1—Core provisions for Chapter 2 Part 2‑1 has the core provisions for Chapter 2 (which is mainly about Commonwealth entities but does have some provisions relating to the Commonwealth specifically). It: • defines what a Commonwealth entity is (see section 10); and • defines what the 2 types of Commonwealth entities—corporate Commonwealth entities and non‑corporate Commonwealth entities—are (see section 11); and • defines who the accountable authority of the entity is (see section 12); and • defines who the officials of the entity are (see section 13). Part 2‑2—Accountable authorities and officials Part 2‑2 is about the accountable authorities and officials of Commonwealth entities. It mainly deals with the general duties that are imposed on accountable authorities and officials. Part 2‑3—Planning, performance and accountability Part 2‑3 is about planning by, and performance and accountability of, Commonwealth entities. It requires the accountable authority of a Commonwealth entity: • to prepare a corporate plan, and budget estimates, for the entity; and • to measure and assess the performance of the entity, and prepare annual performance statements for the entity; and • to prepare annual financial statements for the entity; and • to prepare an annual report for the entity. It also requires the Finance Minister to publish monthly financial reports and table annual consolidated statements in the Parliament. Part 2‑4—Use and management of public resources Part 2‑4 is about the use and management of public resources by the Commonwealth and Commonwealth entities. It deals with: • banking, borrowing, investments, indemnities, guarantees and warranties by the Commonwealth and corporate Commonwealth entities, and insurance obtained by corporate Commonwealth entities; and • waivers, set‑offs and act of grace payments by the Commonwealth. It also has special provisions that apply to Ministers or officials of non‑corporate Commonwealth entities (for example in relation to making gifts and liability for loss). Part 2‑5—Appropriations Part 2‑5 has some specific provisions relating to appropriations of the CRF. In particular, it deals with special accounts. Part 2‑6—Cooperating with other jurisdictions Part 2‑6 is about the Commonwealth and Commonwealth entities cooperating with the States and Territories. It allows the rules to prescribe situations where the accountable authority of a Commonwealth entity is required to share information with the States and Territories. It also prohibits the Commonwealth from preventing State or Territory Auditors‑General from conducting audits in certain situations. Part 2‑7—Companies, subsidiaries and new corporate Commonwealth entities Part 2‑7 has provisions relating to the Commonwealth's involvement in companies, the responsibility of corporate Commonwealth entities for their subsidiaries, and the creation of new corporate Commonwealth entities. Chapter 3—Commonwealth companies Part 3‑1—General Part 3‑1 has the core provisions for Chapter 3 (which is about Commonwealth companies). It: • defines what a Commonwealth company is (see subsection 89(1)); and • defines what a wholly‑owned Commonwealth company is (see section 90). It also has some requirements that apply to the directors of wholly‑owned Commonwealth companies. Part 3‑2—Planning and accountability Part 3‑2 is about planning by, and the accountability of, Commonwealth companies. It requires the directors of a Commonwealth company: • to prepare a corporate plan and, in the case of a wholly‑owned Commonwealth company, budget estimates for the company; and • to prepare an annual report for the company. Chapter 4—Rules, delegations and independent review Part 4‑1—The rules Part 4‑1 is about the rules. It provides the general power to make the rules and provides additional matters in relation to which rules can be made. Part 4‑2—Delegations Part 4‑2 is about delegations. It sets out when the Finance Minister, the Treasurer, the Finance Secretary and the accountable authority of a non‑corporate Commonwealth entity may delegate a power, function or duty under this Act or the rules. Part 4‑3—Independent review Part 4‑3 requires the Finance Minister, in consultation with the Joint Committee of Public Accounts and Audit, to conduct an independent review of the operation of this Act and the rules. Part 1‑2—Definitions Division 1—Guide to this Part 7 Guide to this Part This Part is about the terms that are defined in this Act. Division 2 has the Dictionary (see section 8). The Dictionary is a list of every term that is defined in this Act. A term will either be defined in the Dictionary itself, or in another provision of this Act. If another provision defines the term, the Dictionary will have a signpost to that definition. Division 2—The Dictionary 8 The Dictionary In this Act: accountable authority: see subsection 12(2). accounting standards means the accounting standards issued by the Australian Accounting Standards Board, as in force or applicable from time to time. Agency Head has the meaning given by section 7 of the Public Service Act 1999. arrangement: see subsection 23(2). authorised investment: see subsection 58(8). bank means: (a) an authorised deposit‑taking institution (within the meaning of the Banking Act 1959); or (b) the Reserve Bank of Australia; or (c) a person who carries on the business of banking outside Australia. bankable money: see subsection 55(2). Commonwealth company: see subsection 89(1). Commonwealth entity: see subsections 10(1) and (2). controls: see subsection 89(2). corporate Commonwealth entity: see paragraph 11(a). Corporations Act company means a body corporate that is incorporated, or taken to be incorporated, under the Corporations Act 2001. CRF (short for Consolidated Revenue Fund) means the Consolidated Revenue Fund referred to in section 81 of the Constitution. Department of State: (a) includes any body (except a body corporate), person, group of persons or organisation that is prescribed by an Act or the rules in relation to a specified Department of State; and (b) excludes any part of a Department of State that is a listed entity. director of a Commonwealth company has the meaning given by the Corporations Act 2001. eligible delegate: see subsection 108(2). enabling legislation for a Commonwealth entity that is established by or under an Act or legislative instrument means that Act or legislative instrument. finance law means: (a) this Act; or (b) the rules; or (c) any instrument made under this Act; or (d) an Appropriation Act. Finance Minister means the Minister who administers this Act. Finance Secretary means the Secretary of the Department. Future Fund Board of Guardians means the Future Fund Board of Guardians established by section 34 of the Future Fund Act 2006. governing body of a corporate Commonwealth entity means: (a) for a corporate Commonwealth entity that has a board, council or other governing body—that board, council or governing body; and (b) otherwise—all of the members of the entity. government business enterprise means a Commonwealth entity or Commonwealth company that is prescribed by the rules. government policy order: see subsections 22(1) and 93(1). GST has the same meaning as in the GST Act. GST Act means the A New Tax System (Goods and Services Tax) Act 1999, as it applies because of Division 177 of that Act. Note: Under Division 177 of the GST Act, that Act applies notionally to the Commonwealth and Commonwealth entities. They are therefore notionally liable to pay GST, are notionally entitled to input tax credits and notionally have adjustments. GST qualifying amount: see subsection 74A(3). intelligence or security agency has the same meaning as in section 85ZL of the Crimes Act 1914. listed entity means: (a) any body (except a body corporate), person, group of persons or organisation (whether or not part of a Department of State); or (b) any combination of bodies (except bodies corporate), persons, groups of persons or organisations (whether or not part of a Department of State); that is prescribed by an Act or the rules to be a listed entity. listed law enforcement agency means a law enforcement agency (within the meaning of section 85ZL of the Crimes Act 1914) that is prescribed by the rules. Minister includes a Presiding Officer. money includes cheques and similar instruments. non‑corporate Commonwealth entity: see paragraph 11(b). official: see subsections 13(2), (3), (4) and (5). other CRF money: see subsection 105(2). Parliamentary Department means a Department of the Parliament established under the Parliamentary Service Act 1999 and includes any body (except a body corporate), person, group of persons or organisation that is prescribed by an Act or the rules in relation to a specified Parliamentary Department. Presiding Officer means the President of the Senate or the Speaker of the House of Representatives. proper, when used in relation to the use or management of public resources, means efficient, effective, economical and ethical. public resources means relevant money, relevant property, or appropriations. purposes of a Commonwealth entity or Commonwealth company includes the objectives, functions or role of the entity or company. relevant body: see subsection 72(2). relevant company: see subsection 85(2). relevant money means: (a) money standing to the credit of any bank account of the Commonwealth or a corporate Commonwealth entity; or (b) money that is held by the Commonwealth or a corporate Commonwealth entity. relevant property means: (a) property (other than relevant money) that is owned or held by the Commonwealth or a corporate Commonwealth entity; or (b) any other thing prescribed by the rules. reporting period for a Commonwealth entity, a Commonwealth company, or a subsidiary of a corporate Commonwealth entity or Commonwealth company, means: (a) the period of 12 months commencing on 1 July; or (b) any other period prescribed by an Act or the rules for the entity, company or subsidiary. responsible Minister for a Commonwealth entity or Commonwealth company means the Minister who is responsible for the entity or company, unless otherwise prescribed by the rules. rules means the rules made under section 101. special account means: (a) a special account that is established by the Finance Minister under section 78; or (b) a special account that is established by an Act (including this Act). spending limit provision: see subsection 59(3). subsidiary of a corporate Commonwealth entity or a Commonwealth company means an entity that is controlled by the corporate Commonwealth entity or Commonwealth company. For this purpose, entity and control have the same meanings as in the accounting standard that applies for the purpose of deciding whether a company has to prepare consolidated financial statements under the Corporations Act 2001. wholly‑owned Commonwealth company: see section 90. Chapter 2—Commonwealth entities and the Commonwealth Part 2‑1—Core provisions for this Chapter Division 1—Guide to this Part 9 Guide to this Part This Part has the core provisions for this Chapter, which is mainly about Commonwealth entities. (For Commonwealth companies, see Chapter 3.) It: • defines what a Commonwealth entity is (see section 10); and • defines what the 2 types of Commonwealth entities—corporate Commonwealth entities and non‑corporate Commonwealth entities—are (see section 11); and • defines who the accountable authority of the entity is (see section 12); and • defines who the officials of the entity are (see section 13). Division 2—Core provisions for this Chapter 10 Commonwealth entities (1) A Commonwealth entity is: (a) a Department of State; or (b) a Parliamentary Department; or (c) a listed entity; or (d) a body corporate that is established by a law of the Commonwealth; or (e) a body corporate that: (i) is established under a law of the Commonwealth (other than a Commonwealth company); and (ii) is prescribed by an Act or the rules to be a Commonwealth entity. Note: Commonwealth companies are not Commonwealth entities because they are not covered by this subsection. Chapter 3 deals with Commonwealth companies. (2) However, the High Court and the Future Fund Board of Guardians are not Commonwealth entities. 11 Types of Commonwealth entities There are 2 types of Commonwealth entities: (a) a corporate Commonwealth entity, which is a Commonwealth entity that is a body corporate; and (b) a non‑corporate Commonwealth entity, which is a Commonwealth entity that is not a body corporate. Note: Corporate Commonwealth entities are legally separate from the Commonwealth, whereas non‑corporate Commonwealth entities are part of the Commonwealth. 12 Accountable authorities (1) Each Commonwealth entity has an accountable authority. (2) The following table sets out the person or body that is the accountable authority of a Commonwealth entity: Accountable authorities Item If the Commonwealth entity is: then the accountable authority of the entity is: 1 a Department of State the Secretary of the Department. 2 a Parliamentary Department the Secretary of the Department. 3 a listed entity the person or group of persons prescribed by an Act or the rules to be the accountable authority of the entity. 4 a body corporate the governing body of the entity, unless otherwise prescribed by an Act or the rules. 13 Officials (1) Each Commonwealth entity has officials. Officials of Commonwealth entities (other than listed entities) (2) An official of a Commonwealth entity (other than a listed entity) is a person who is in, or forms part of, the entity. (3) Without limiting subsection (2), an official of a Commonwealth entity (other than a listed entity) includes: (a) a person who is, or is a member of, the accountable authority of the entity; or (b) a person who is an officer, employee or member of the entity; or (c) a person, or a person in a class, prescribed by an Act or the rules to be an official of the entity. (4) Despite subsections (2) and (3), each of the following is not an official of a Commonwealth entity (other than a listed entity): (a) a Minister; (b) a judge; (c) a consultant or independent contractor of the entity (other than a consultant or independent contractor of a kind prescribed by an Act or the rules for the purposes of paragraph (3)(c)); (d) a person, or a person in a class, prescribed by an Act or the rules not to be an official of the entity. Officials of listed entities (5) An official of a Commonwealth entity that is a listed entity is a person who is prescribed by an Act or the rules to be an official of the entity. Part 2‑2—Accountable authorities and officials Division 1—Guide to this Part 14 Guide to this Part This Part is about the accountable authorities and officials of Commonwealth entities. Accountable authorities There are general duties that apply to all accountable authorities. Those duties are set out in sections 15 to 19. Accountable authorities may give instructions to officials under section 20A. Those instructions are part of the finance law. In relation to whether accountable authorities must apply government policy, different requirements apply depending on whether the entity is a non‑corporate Commonwealth entity (see section 21) or a corporate Commonwealth entity (see section 22). The accountable authorities of non‑corporate Commonwealth entities have power to enter into arrangements, and approve commitments of relevant money, on behalf of the Commonwealth (see section 23). Officials There are general duties that apply to all officials. Those duties are set out in sections 25 to 29. If an official who is the accountable authority, or a member of the accountable authority, of a corporate Commonwealth entity contravenes those duties, the official's appointment may be terminated (see section 30). Division 2—Accountable authorities Subdivision A—General duties of accountable authorities 15 Duty to govern the Commonwealth entity (1) The accountable authority of a Commonwealth entity must govern the entity in a way that: (a) promotes the proper use and management of public resources for which the authority is responsible; and (b) promotes the achievement of the purposes of the entity; and (c) promotes the financial sustainability of the entity. Note: Section 21 (which is about the application of government policy) affects how this duty applies to accountable authorities of non‑corporate Commonwealth entities. (2) In making decisions for the purposes of subsection (1), the accountable authority must take into account the effect of those decisions on public resources generally. 16 Duty to establish and maintain systems relating to risk and control The accountable authority of a Commonwealth entity must establish and maintain: (a) an appropriate system of risk oversight and management for the entity; and (b) an appropriate system of internal control for the entity; including by implementing measures directed at ensuring officials of the entity comply with the finance law. Note 1: An example of a measure directed at ensuring officials of the entity comply with the finance law is a measure: (a) requiring, as a condition of employment of an official of the entity, that the official complies with the finance law; and (b) specifying sanctions (such as termination) that apply to the official for contravening that condition. Such a measure would not be needed for officials to whom the Public Service Act 1999 or Parliamentary Service Act 1999 applies because, under that Act, sanctions may be imposed on those officials for contravening the finance law: see section 32 of this Act. Note 2: This duty includes managing consultants and independent contractors who work for the entity, even if they are not officials of the entity. 17 Duty to encourage cooperation with others The accountable authority of a Commonwealth entity must encourage officials of the entity to cooperate with others to achieve common objectives, where practicable. 18 Duty in relation to requirements imposed on others When imposing requirements on others in relation to the use or management of public resources for which the accountable authority of a Commonwealth entity is responsible, the accountable authority must take into account: (a) the risks associated with that use or management; and (b) the effects of imposing those requirements. 19 Duty to keep responsible Minister and Finance Minister informed (1) The accountable authority of a Commonwealth entity must do the following: (a) keep the responsible Minister informed of the activities of the entity and any subsidiaries of the entity; (b) give the responsible Minister or the Finance Minister any reports, documents and information in relation to those activities as that Minister requires; (c) notify the responsible Minister as soon as practicable after the accountable authority makes a significant decision in relation to the entity or any of its subsidiaries; (d) give the responsible Minister reasonable notice if the accountable authority becomes aware of any significant issue that may affect the entity or any of its subsidiaries; (e) notify the responsible Minister as soon as practicable after the accountable authority becomes aware of any significant issue that has affected the entity or any of its subsidiaries. (2) However, for a Commonwealth entity that is related to a court or tribunal, subsection (1) applies only to activities, reports, documents, information or notifications about matters of an administrative nature. (3) Without limiting subsection (1), the rules may prescribe matters to be taken into account in deciding whether a decision or issue is significant. (4) The accountable authority must comply with a requirement under paragraph (1)(b) within the time limits set by the Minister concerned. Relationship with other laws and powers (4A) If a Commonwealth entity has enabling legislation, then subsection (1) applies only to the extent that compliance with that subsection is not inconsistent with compliance with that legislation. (4B) This section is subject to any Commonwealth law that prohibits disclosure of particular information. (5) This section does not limit any other power that a Minister has to require information from a Commonwealth entity. Subdivision B—Rules about general duties of accountable authorities 20 Rules about general duties of accountable authorities The rules may prescribe matters relating to discharging duties under Subdivision A. Subdivision BA—Accountable authority instructions 20A Accountable authority instructions (1) The accountable authority of a Commonwealth entity may, by written instrument, give instructions to an official of the entity about any matter relating to the finance law. (2) The accountable authority of a Commonwealth entity may, by written instrument, give instructions to an official of another Commonwealth entity in relation to: (a) the official approving the commitment of relevant money for which the accountable authority is responsible; and (b) the official banking, or otherwise dealing with, relevant money for which the accountable authority is responsible; and (c) the official debiting or crediting an appropriation for which the accountable authority is responsible; and (d) any matter prescribed by the rules that relates to the official dealing with public resources for which the accountable authority is responsible. (3) An instruction under subsection (1) or (2) is not a legislative instrument. Subdivision C—Application of government policy 21 Non‑corporate Commonwealth entities The accountable authority of a non‑corporate Commonwealth entity must govern the entity in accordance with paragraph 15(1)(a) in a way that is not inconsistent with the policies of the Australian Government. Note: Paragraph 15(1)(a) is about promoting the proper use and management of public resources for which the accountable authority is responsible. 22 Corporate Commonwealth entities (1) The Finance Minister may make an order (a government policy order) that specifies a policy of the Australian Government that is to apply in relation to one or more corporate Commonwealth entities. (2) Before making a government policy order that applies in relation to a corporate Commonwealth entity, the Finance Minister must be satisfied that the Minister responsible for the policy has consulted the entity on the application of the policy. (3) If a government policy order applies in relation to a corporate Commonwealth entity, the accountable authority of the entity must ensure that the order is complied with: (a) in relation to the entity; and (b) in relation to any subsidiary of the entity, so far as practicable. (4) A government policy order is a legislative instrument, but section 42 (disallowance) of the Legislation Act 2003 does not apply to it. Subdivision D—Special provisions applying to accountable authorities of non‑corporate Commonwealth entities 23 Power in relation to arrangements and commitments (1) The accountable authority of a non‑corporate Commonwealth entity may, on behalf of the Commonwealth: (a) enter into arrangements relating to the affairs of the entity; and (b) vary and administer those arrangements. (2) An arrangement includes a contract, agreement, deed or understanding. (3) The accountable authority of a non‑corporate Commonwealth entity may, on behalf of the Commonwealth, approve a commitment of relevant money for which the accountable authority is responsible. 24 Power to establish advisory boards (1) The accountable authority of a non‑corporate Commonwealth entity may establish an advisory board to assist the authority in governing the entity. (2) An advisory board for a non‑corporate Commonwealth entity may include individuals who are not officials of the entity. Division 3—Officials Subdivision A—General duties of officials 25 Duty of care and diligence (1) An official of a Commonwealth entity must exercise his or her powers, perform his or her functions and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if the person: (a) were an official of a Commonwealth entity in the Commonwealth entity's circumstances; and (b) occupied the position held by, and had the same responsibilities within the Commonwealth entity as, the official. (2) The rules may prescribe circumstances in which the requirements of subsection (1) are taken to be met. 26 Duty to act honestly, in good faith and for a proper purpose An official of a Commonwealth entity must exercise his or her powers, perform his or her functions and discharge his or her duties honestly, in good faith and for a proper purpose. 27 Duty in relation to use of position An official of a Commonwealth entity must not improperly use his or her position: (a) to gain, or seek to gain, a benefit or an advantage for himself or herself or any other person; or (b) to cause, or seek to cause, detriment to the entity, the Commonwealth or any other person. 28 Duty in relation to use of information A person who obtains information because they are an official of a Commonwealth entity must not improperly use the information: (a) to gain, or seek to gain, a benefit or an advantage for himself or herself or any other person; or (b) to cause, or seek to cause, detriment to the Commonwealth entity, the Commonwealth or any other person. 29 Duty to disclose interests (1) An official of a Commonwealth entity who has a material personal interest that relates to the affairs of the entity must disclose details of the interest. (2) The rules may do the following: (a) prescribe circumstances in which subsection (1) does not apply; (b) prescribe how and when an interest must be disclosed; (c) prescribe the consequences of disclosing an interest (for example, that the official must not participate at a meeting about a matter or vote on the matter). Subdivision B—Provisions relating to general duties of officials 30 Termination—accountable authority, or member of accountable authority, contravening general duties of officials (1) A person (the appointer) may terminate the appointment of another person (the appointee) to a position in a corporate Commonwealth entity if: (a) the appointer is responsible for appointing the appointee to the position; and (b) the appointee is, or is a member of, the accountable authority of the entity; and (c) the appointee contravenes Subdivision A, or rules made for the purposes of that Subdivision, in relation to the entity; and (d) the termination is in accordance with any requirements prescribed by the rules. Ex officio positions (1A) A person's appointment may be terminated under subsection (1): (a) even if the person was not appointed as the accountable authority, or a member of the accountable authority, of the entity but is the accountable authority, or a member of the accountable authority, as a result of holding the position in the entity to which the person was appointed; and (b) whether or not the contravention referred to in paragraph (1)(c) relates to the person's duties as the accountable authority. Note: This section does not apply to a person who is appointed to a position in a Commonwealth entity and, as a result of holding that position, is or is a member of the accountable authority of a different Commonwealth entity. Procedure for terminating appointments (2) The appointer terminates the appointment by giving the appointee a written notice signed by the appointer. (3) The notice must include a statement of reasons for the termination. (4) The appointer must cause a copy of the notice to be tabled before each House of the Parliament within 15 sitting days of that House after the day the appointer gives the notice to the appointee. Rules may prescribe positions whose appointments must not be terminated (5) Without limiting paragraph (1)(d), the rules may prescribe positions in relation to which appointments must not be terminated under this section. Relationship with other termination of appointment provisions (6) This section applies in addition to, and does not limit, any provision in any enabling legislation for a corporate Commonwealth entity that provides for the termination of the appointment of a person in relation to the entity. 31 Interaction between Subdivision A and other laws Subdivision A, and rules made for the purposes of that Subdivision, do not limit: (a) a law of the Commonwealth, or any principles or rules of the common law or equity relating to: (i) the duty or liability of a person because of his or her position or employment in relation to a Commonwealth entity; or (ii) conflicts of interest; and (b) any provision in any enabling legislation for a Commonwealth entity that restricts an official of the entity from: (i) having a material personal interest in a matter; or (ii) holding an office or possessing property; involving duties or interests that conflict with his or her duties or interests as an official. Subdivision C—Officials to whom the Public Service Act or Parliamentary Service Act applies 32 Officials to whom the Public Service Act or Parliamentary Service Act applies To avoid doubt, the finance law is an Australian law for the purposes of subsection 13(4) of the Public Service Act 1999 and subsection 13(4) of the Parliamentary Service Act 1999. Note 1: If the Public Service Act 1999 or Parliamentary Service Act 1999 applies to an official of a Commonwealth entity, the official will be required under subsection 13(4) of that Act to comply with applicable Australian laws (which include the finance law). This means that if the official contravenes the finance law, sanctions (such as termination of employment) may be imposed on the official under section 15 of that Act. Note 2: For dealing with a contravention of the finance law by an official of a Commonwealth entity to whom the Public Service Act 1999 or Parliamentary Service Act 1999 does not apply, see section 16 of this Act (which requires the accountable authority of the entity to implement measures directed at ensuring officials of the entity comply with the finance law). Part 2‑3—Planning, performance and accountability Division 1—Guide to this Part 33 Guide to this Part This Part is about planning by, and performance and accountability of, Commonwealth entities. Division 2 is about planning and budgeting. It requires the accountable authority of a Commonwealth entity to prepare a corporate plan, and budget estimates, for the entity. Division 3 is about the performance of Commonwealth entities. It requires the accountable authority of a Commonwealth entity: • to cause records to be kept about the entity's performance; and • to measure and assess the entity's performance; and • to prepare annual performance statements about the entity's performance for inclusion in the entity's annual report. Division 4 is about financial reporting and auditing for Commonwealth entities. It requires the accountable authority of a Commonwealth entity: • to cause accounts and records to be kept about the entity's transactions and financial position; and • to prepare annual financial statements for the entity for inclusion in the entity's annual report. It also requires the Auditor‑General to audit those annual financial statements. Division 5 requires the accountable authority of a Commonwealth entity to ensure that the entity has an audit committee. Division 6 requires the accountable authority of a Commonwealth entity to prepare annual reports for the entity. Division 7 is about Australian Government financial reporting by the Finance Minister. It requires the Finance Minister to publish monthly financial reports and table annual consolidated statements in the Parliament. It also requires the Auditor‑General to audit those annual consolidated statements. Division 2—Planning and budgeting 34 Key priorities and objectives of the Australian Government The Australian Government may, from time to time, publish a statement setting out its key priorities and objectives. 35 Corporate plan for Commonwealth entities Commonwealth entities (1) The accountable authority of a Commonwealth entity must: (a) prepare a corporate plan (however described) for the entity at least once each reporting period for the entity; and (b) give the corporate plan to the responsible Minister and the Finance Minister in accordance with any requirements prescribed by the rules. (2) The corporate plan must comply with, and be published in accordance with, any requirements prescribed by the rules. (3) If: (a) a statement of the Australian Government's key priorities and objectives is published under section 34; and (b) the purposes of the Commonwealth entity relate to those priorities and objectives; then the corporate plan must set out how the activities of the entity will contribute to achieving those priorities and objectives. (4) However, if the Commonwealth entity has enabling legislation, then subsection (3) applies only to the extent that compliance with that subsection is not inconsistent with compliance with that legislation. Subsidiaries (5) If the Commonwealth entity has subsidiaries, the corporate plan must cover both the entity and its subsidiaries. In particular, for each subsidiary the corporate plan must include details of any matters prescribed by the rules, so far as they are applicable. Variation of corporate plan (6) If the accountable authority varies the plan, the authority must comply with any requirements relating to variations of corporate plans that are prescribed by the rules. 36 Budget estimates for Commonwealth entities (1) The accountable authority of a Commonwealth entity must: (a) prepare the budget estimates covering the entity's activities for each reporting period for the entity, and for any other periods directed by the Finance Minister; and (b) give the budget estimates to the Finance Secretary in accordance with any directions under subsection (3). (2) The budget estimates must: (a) fairly present the estimated financial impacts of the entity's activities for the reporting period or other period; and (b) comply with any directions under subsection (3); and (c) be accompanied by any information relating to the budget estimates for the entity that is required by any direction under subsection (3). (3) The Finance Secretary may give written directions to the accountable authority of a Commonwealth entity for the purposes referred to in paragraph (1)(b) or subsection (2). (4) A direction made under subsection (3) is not a legislative instrument. Division 3—Performance of Commonwealth entities 37 Records about performance of Commonwealth entities (1) The accountable authority of a Commonwealth entity must cause records to be kept that properly record and explain the entity's performance in achieving its purposes. (2) The accountable authority must ensure that the records are kept in a way that: (a) complies with any requirements prescribed by the rules; and (b) enables the preparation of the annual performance statements required by section 39. (3) The responsible Minister and the Finance Minister are entitled to full and free access to the records kept under this section. However, those Ministers' access is subject to any Commonwealth law that prohibits disclosure of particular information. 38 Measuring and assessing performance of Commonwealth entities (1) The accountable authority of a Commonwealth entity must measure and assess the performance of the entity in achieving its purposes. (2) The measurement and assessment must comply with any requirements prescribed by the rules. 39 Annual performance statements for Commonwealth entities (1) The accountable authority of a Commonwealth entity must: (a) prepare annual performance statements for the entity as soon as practicable after the end of each reporting period for the entity; and (b) include a copy of the annual performance statements in the entity's annual report that is tabled in the Parliament. Note: See section 46 for the annual report. (2) The annual performance statements must: (a) provide information about the entity's performance in achieving its purposes; and (b) comply with any requirements prescribed by the rules. 40 Audit of annual performance statements for Commonwealth entities (1) The responsible Minister for a Commonwealth entity or the Finance Minister (the requesting Minister) may request the Auditor‑General to examine and report on the entity's annual performance statements. Note: The Auditor‑General may at any time conduct a performance audit of a Commonwealth entity: see Division 2 of Part 4 of the Auditor‑General Act 1997. (2) If, under a request under subsection (1), the Auditor‑General examines and reports on the entity's annual performance statements, the Auditor‑General must give a copy of the report to the requesting Minister. (3) The requesting Minister must cause a copy of the Auditor‑General's report to be tabled in each House of the Parliament as soon as practicable after receipt. The copy that is tabled must be accompanied by a copy of the entity's annual performance statements. Division 4—Financial reporting and auditing for Commonwealth entities 41 Accounts and records for Commonwealth entities (1) The accountable authority of a Commonwealth entity must cause accounts and records to be kept that properly record and explain the entity's transactions and financial position. (2) The accountable authority must ensure that the accounts and records are kept in a way that: (a) complies with any requirements prescribed by the rules; and (b) enables the preparation of the annual financial statements required by sections 42 and 48; and (c) allows those financial statements to be conveniently and properly audited in accordance with this Act. Note: The Auditor‑General audits the financial statements of Commonwealth entities (see section 43). (3) The Finance Minister and the responsible Minister are entitled to full and free access to the accounts and records kept under this section. However, those Ministers' access is subject to any Commonwealth law that prohibits disclosure of particular information. 42 Annual financial statements for Commonwealth entities (1) The accountable authority of a Commonwealth entity must: (a) prepare annual financial statements for the entity as soon as practicable after the end of each reporting period for the entity; and (b) give the statements to the Auditor‑General as soon as practicable after they are prepared. (2) The annual financial statements must: (a) comply with the accounting standards and any other requirements prescribed by the rules; and (b) present fairly the entity's financial position, financial performance and cash flows. Note: If financial statements for a Commonwealth entity prepared in accordance with the accounting standards would not present fairly the entity's financial position, financial performance and cash flows, the accountable authority of the entity must add the information and explanations required to present fairly those matters. (3) In the annual financial statements, the accountable authority must state whether, in the authority's opinion, the statements comply with subsection (2). (4) If the Commonwealth entity is a government business enterprise, the accountable authority must state whether, in the authority's opinion, there are reasonable grounds to believe, when the statement is made, that the entity will be able to pay its debts as and when they fall due. 43 Audit of annual financial statements for Commonwealth entities (1) As soon as practicable after receiving annual financial statements under section 42 for a Commonwealth entity, the Auditor‑General must: (a) examine the statements and prepare an audit report; and (b) give the report to the entity's responsible Minister as soon as practicable after it is prepared. (2) In the audit report, the Auditor‑General must state whether, in the Auditor‑General's opinion, the annual financial statements: (a) comply with the accounting standards and any other requirements prescribed by the rules; and (b) present fairly the entity's financial position, financial performance and cash flows. If the Auditor‑General is not of that opinion, the Auditor‑General must state the reasons. (3) If the Auditor‑General is of the opinion that a failure of the annual financial statements to comply with: (a) the accounting standards; or (b) any other requirements prescribed by the rules; has a quantifiable financial effect, then the Auditor‑General must quantify that financial effect and state the amount, where practicable. (4) A copy of the annual financial statements and the Auditor‑General's report must be included in the Commonwealth entity's annual report that is tabled in the Parliament. Note: See section 46 for the annual report. 44 Audit of subsidiary's financial statements (1) This section applies in relation to a corporate Commonwealth entity that has a subsidiary at the end of the subsidiary's reporting period. (2) The accountable authority of the Commonwealth entity must ensure that all the subsidiary's financial statements for a reporting period of the subsidiary are audited. (3) The subsidiary's financial statements must be audited by the Auditor‑General unless: (a) the subsidiary is incorporated or formed in a place outside Australia; and (b) either: (i) under the law applying to the subsidiary in that place, the Auditor‑General cannot be appointed as auditor of the subsidiary; or (ii) in the Auditor‑General's opinion, it is impracticable or unreasonable for the Auditor‑General to audit, or to be required to audit, the statements. Note: If the Auditor‑General is not the subsidiary's auditor, this subsection requires the Auditor‑General to do an audit of the statements in addition to that done by the subsidiary's auditor, except in the circumstances referred to in paragraphs (3)(a) and (b). (4) For a subsidiary that is a Corporations Act company that, under the Corporations Act 2001, is required to have those statements audited, the Auditor‑General's report on the subsidiary's financial statements must be prepared using the relevant rules in the Corporations Act 2001. Those rules must also be used for other subsidiaries, so far as is practicable. (5) The accountable authority of the Commonwealth entity must give the report of the auditor to the responsible Minister (whether or not the auditor is the Auditor‑General), together with a copy of the subsidiary's financial statements. Division 5—Audit committee for Commonwealth entities 45 Audit committee for Commonwealth entities (1) The accountable authority of a Commonwealth entity must ensure that the entity has an audit committee. (2) The committee must be constituted, and perform functions, in accordance with any requirements prescribed by the rules. Division 6—Annual report for Commonwealth entities 46 Annual report for Commonwealth entities (1) After the end of each reporting period for a Commonwealth entity, the accountable authority of the entity must prepare and give an annual report to the entity's responsible Minister, for presentation to the Parliament, on the entity's activities during the period. Note: A Commonwealth entity's annual report must include the entity's annual performance statements and annual financial statements (see paragraph 39(1)(b) and subsection 43(4)). (2) The annual report must be given to the responsible Minister by: (a) the 15th day of the fourth month after the end of the reporting period for the entity; or (b) the end of any further period granted under subsection 34C(5) of the Acts Interpretation Act 1901. (3) The annual report must comply with any requirements prescribed by the rules. (4) Before rules are made for the purposes of subsection (3), the rules must be approved on behalf of the Parliament by the Joint Committee of Public Accounts and Audit. Division 7—Australian Government financial reporting 47 Monthly financial reports (1) As soon as practicable after the end of each month of a financial year, the Finance Minister must publish monthly financial reports in relation to that month. (2) The monthly financial reports: (a) must be in a form that is consistent with the budget estimates for the financial year; and (b) may include any additional information that the Finance Minister considers relevant. 48 Annual consolidated financial statements (1) The Finance Minister must: (a) prepare annual consolidated financial statements as soon as practicable after the end of each financial year; and (b) give the statements to the Auditor‑General as soon as practicable after they are prepared. (2) The annual consolidated financial statements must: (a) comply with the accounting standards and any other requirements prescribed by the rules; and (b) present fairly the consolidated financial position, financial performance and cash flows. (3) If the Finance Minister has not given the annual consolidated financial statements to the Auditor‑General within 5 months after the end of the financial year, the Finance Minister must cause to be tabled in each House of the Parliament a statement of the reasons why the statements were not given to the Auditor‑General within that period. 49 Audit of annual consolidated financial statements (1) As soon as practicable after receiving the annual consolidated financial statements under section 48, the Auditor‑General must: (a) examine the statements and prepare an audit report; and (b) give a copy of the report to the Finance Minister as soon as practicable after it is prepared. (2) In the audit report, the Auditor‑General must state whether, in the Auditor‑General's opinion, the annual consolidated financial statements: (a) comply with the accounting standards and any other requirements prescribed by the rules; and (b) present fairly the consolidated financial position, financial performance and cash flows. If the Auditor‑General is not of that opinion, the Auditor‑General must state the reasons. (3) If the Auditor‑General is of the opinion that a failure of the annual consolidated financial statements to comply with: (a) the accounting standards; or (b) any other requirements prescribed by the rules; has a quantifiable financial effect, then the Auditor‑General must quantify that financial effect and state the amount, where practicable. (4) The Finance Minister must cause a copy of the audit report to be tabled in each House of the Parliament as soon as practicable after receipt. The copy that is tabled must be accompanied by a copy of the annual consolidated financial statements. Part 2‑4—Use and management of public resources Division 1—Guide to this Part 50 Guide to this Part This Part is about the use and management of public resources by the Commonwealth and Commonwealth entities. Many of the provisions in this Part apply to either the Commonwealth or corporate Commonwealth entities, and do not expressly refer to non‑corporate Commonwealth entities. This is because non‑corporate Commonwealth entities are legally part of the Commonwealth. Generally, the Finance Minister has the power to act on behalf of the Commonwealth for the purposes of the provisions of this Part. Division 2 allows the Finance Minister to make available to Commonwealth entities amounts that have been appropriated by the Parliament for the entity. It also allows the rules to prescribe matters relating to the commitment or expenditure of relevant money by the Commonwealth or Commonwealth entities. Division 3 is about banking for the Commonwealth and corporate Commonwealth entities. It also has requirements about how Ministers and officials are to deal with relevant money that they receive. Division 4 is about borrowing by the Commonwealth and corporate Commonwealth entities. Division 5 is about investment by the Commonwealth and corporate Commonwealth entities. Division 6 is about indemnities, guarantees and warranties by the Commonwealth and corporate Commonwealth entities, and insurance obtained by corporate Commonwealth entities. Division 7 is about the Commonwealth. It deals with the Commonwealth: • waiving amounts owed to it; and • setting off amounts owed to, or by, it against another amount that is owed to, or by, another person; and • granting act of grace payments to a person. Division 8 has special provisions that apply to Ministers and officials of non‑corporate Commonwealth entities. • Subdivision A prohibits Ministers and those officials from making gifts of relevant property unless authorised as provided in section 66. • Subdivision B makes Ministers and those officials liable to pay an amount to the Commonwealth if they make an unauthorised gift or are responsible for the loss of relevant money or relevant property. Division 9 has requirements that apply to Ministers only. Section 71 has requirements that apply to a Minister when the Minister is approving proposed expenditure. Section 72 requires a Minister who has responsibility for certain events (for example, the forming of a new company) to inform Parliament of the event. Division 2—Funding and expenditure 51 Making amounts appropriated available to Commonwealth entities (1) If an amount is appropriated by the Parliament in relation to a Commonwealth entity, then the Finance Minister may,