April 2014

Grants News | 1

It has been another busy quarter in grants administration. We have seen the inaugural Repeal Day, with the Low-risk Grant Agreement Template now launched on the Finance website. The grants.gov.au scoping study is underway and the Public Governance, Performance and Accountability Act 2013 (PGPA Act) Taskforce continues to move forward, with the new act to take effect from 1 July 2014.

This edition featuresour first agency profile from the Attorney General’s Department, as well as information from the Australian National Audit Office about value with public money.

2014 Australian Government Repeal Day

On 19 March 2014 (Repeal Day), the PrimeMinister announced a range of measures that contribute towards the
$1 billion target of reduced regulatory burden on individuals, businesses and community organisations. Finance is responsible for implementing a number of initiatives through the grants and procurement frameworks.

As part of the Autumn Repeal Day, the Government officially launched the low-risk grant agreement template. The template includes a standard set of 20 terms and conditions (just two-pages) and aims to reduce the administration and legal costs associated with grant agreements. Finance has also developed an accompanying risk tool and user guide to assist agency staff using the template.

The template, risk tool and user guide are now available on the Finance website. Please contact the Grants Policy Team at if you would like to

arrange an information session for your agency on the low-risk template.

The procurement related initiatives are focussed on making it easier for small business to do business with government. One measure is the Commonwealth Contracting Suite for lowrisk procurements under $200,000. It comprises standardised terms and conditions, combined with user-friendly and intuitive online templates. These should remove the need for legal advice and other associated costs. Probity guidance on the Finance website is also being updated. Government agencies will be encouraged to talk to potential suppliers during the tendering process.

A second policy, effective from 1 July 2014, facilitates prompt payments to small businesses. Credit and debit cards will become the Government’s preferred payment option for purchases under $20,000. This means businesses will save on costs relating to financing cash flow

See this link for additional information on Finance’s low-risk grant agreement template. Once finalised the Commonwealth Contracting Suite will be published on the Finance website, meanwhile updates will be posted on theProcurement Coordinator’s blog.

Minister’s Annual Reporting Requirements: Reminder

The Commonwealth Grant Guidelines (CGGs) require Ministers and Parliamentary Secretaries report to the Finance Minister on all instances where they have approved a grant which agency staff have recommended be rejected. This report is due by 31 March each year. The Finance Secretary wrote to all secretaries and chief executives on 3 February 2014, reminding them of this and advising of the revised reporting period, toaccommodate the change of government. Finance has received 51 responses. Foragencies yet to report please do so, including for nil responses.

The grants.gov.au project

As previously reported, Finance is undertaking a scoping study to inform the development of the Australian Government Grants System(grants.gov.au). As you may be aware, Finance requested all FMA agencies to complete a questionnaire, which sought comprehensive data on agencies granting activities. Responses to the questionnaire closed 3 February 2014.

We received responses from 106 FMA Act agencies, with data relating to either the 2012-13 financialyear or the 2012 calendar year. The preliminary data indicates around 40 FMA Act agencies provided grants in 2012-13. There were approximately
800 grant programmes across these 40 agencies. Agencies received over 62,000 applications and entered into over 26,000 grant agreements.

To help identify any issues Finance is consulting with potential grant recipients. A survey was sent to over 100 potential grant recipients and we have been meeting with specific stakeholders.The results of this survey are currently being analysed.

The final scoping study report is due to be completed by mid 2014, with the system to be operational by mid 2016.

If you would like to know more please contact .

Resource Management Instructions under the PGPA Act

Commonwealth entities are currently preparing for the start of the PGPA Act on
1 July 2014. The PGPA Act consolidates into a single piece of legislation the governance, performance and accountability requirements for the Commonwealth, and sets out a regulatory framework for all Commonwealth entities (regardless of whether they are currently FMA or CAC Act entities).

To help entities transition to the PGPA Act and Rules, the Model Resource Management Instructions (RMIs) for non-corporate Commonwealth entities (thiscovers most FMA Act agencies under the currentframework) are being developed in consultation with a cross-agency working group. These are based on the Model Chief Executive Instructions (CEIs) that were developed by Finance and agencies in 2011.

The Model RMIs are essentially a summary of the key requirements of the resource management framework in simpler language. They seek to improve consistency across entities and help all staff members to understand and comply with the key requirements of the resource management framework. The draft RMIs include topics on grants and approving and committing relevant money. Together these two instructions will help staff in the administration of grants and entering into grant agreements.

A draft version of the Model RMIs has been distributed to agency CFOs for comment by mid-April.

For further information on the draft model resource management instructions refer

Attorney-General’s Department Profile

The Attorney-General’s Department (AGD) is currently preparing for the introduction of the PGPA Act, which is set to replace the FMA Act and the CAC Act. This involves the substitution of the CGGs for the Commonwealth Grant Rules and Guidelines(CGRGs), which take effect 1 July 2014. Tasks include making adjustments to guidance material and internal practices, particularly as a consequence of the removal of the FMA Regulations relating to spending of public money, and providing awareness training to programme staff about the impending legislative changes.

Currently, an internal grant reform taskforce is reviewing and preparing a suite of standard documents to be made available to all programmes to coincide with the introduction of the new act and rules. Associated with this standardisation exercise, the department has, along with other agencies, set up a deregulation unit, to monitor the impact of regulation on stakeholders and focus on the reduction of red-tape, including red-tape in grant programmes. AGD has already trialled the Commonwealth low-risk grant agreement template across several grant programmes and welcomes its’ recent formal launch as a means of streamlining administrativeprocesses to reduce the regulatory burden on grantees and to allow for efficiencies within agencies when developing grant agreements.

Revising existing programme guidelines and consulting Finance

Programme guidelines can only be revised where a change does not constitute a New Policy Proposal (NPP). Where proposed changes are considered NPPs, agencies should comply with the relevantBudget Process Operational Rules.

Agencies revising grant programmes or grant guidelines should consult with their Agency Advice Unit (AAU) within Finance and the relevant area in Prime Minister & Cabinet (PMC)when a change is made to:

  • the scope of the grant
  • the purpose or the intentof the grant
  • financial implications of the previously released granting activity.

Where these types of changes occur, agencies need to submit a new risk analysis assessment, along with the revised grant guidelines, to your Finance AAU. Once a risk rating is agreed, agencies should write to the Finance Minister (see Estimates Memorandum 2014/07).

Administrative changes, resulting from machinery of government changes, such as changing agency titles, Minister’s names or corrections to typos and formatting, are minor revisions provided there are no other changes and there is no impact to risk. If you think your guidelines are in this category you should contact your AAU to discuss. Provided your AAU agrees that the changes are minor and administrative, and there is no change to the level of risk, you can vary the guidelines without consulting the Finance Minister.

Finance and PMC agree a risk rating for the granting activity. Finance does not ‘approve’ grant guidelines, and nor does the
Finance Minister. In the case of medium to high risk granting activities the Finance Minister ‘agrees’ to the release of the programme guidelines. The guidelines, their quality, compliance and administrative management of the grant, remains the responsibility of the relevant agency.

Where in doubt, contact your AAUin Finance for clarification.

Frequently Asked Questions

I have responsibility for updating some grant guidelines that were published years ago. I think the changes are minor. Can I make theses changes without going through the process outlined in Estimates Memorandum 2014/07?

Where programme guidelines have been in place for a long time, and have not been through a risk assessment process, then you should conduct an agency risk self-assessment and seek agreement from Finance and PMC. Given the CGGs have been in place for over five years, by now agency staff should havereviewedthe content and structure of most guidelines to ensure that they are in accordance with current legislative provisions and the CGGs.

Generally, minor administrative changes to published guidelines, such as updating contact details resulting from Machinery of Government changes,do not need to go through the risk assessment processes outlined in EM 2014/07. To determine what you will need to do,consult your AAU.

Grants management business process and taxonomy development

As mentioned in the December 2013 edition of Grants News, Finance (AGIMO), together with agencies managing significant grants programmes, has been undertakingbusiness analytical work in relation to grants processes. The two projects have involved identifying and mapping the high level business process involved in grants administration and compiling a taxonomy for grants management. This work has recently been completed and will be submitted to the Secretaries ICT Governance Board for discussion and agreement in May 2014.

Finance thanks those agencies who have been actively involved in this work to date.

ANAO perspective: Value with public money considerations when selecting grant recipients

The CGGs state that it is expected that value with public money will be a core consideration in determining funding recipients under a grant programme. This is in addition to the overall test, required under the Commonwealth’s financial framework, as to whether a spending proposal represents efficient, effective, economical and ethical use of public money that is consistent with the policies of the Commonwealth. Often, this is referred to as a ‘value for money’ test, noting that the CGGs use the phrase ‘value with public money’.

Against this background, ANAO performance audits consider value with public money in the selection of grant recipients at two levels.

The first relates to the detail of the assessment and selection process. Specifically, ANAO’s criteria is that value with public money is promoted by selecting those applications that:

  • are eligible
  • have met the assessment criteria and, where the granting activity is competitive, have demonstrated the greatest comparative merit in terms of those criteria
  • involve a reasonable (rather than excessive) cost having regard to the quality and quantity of deliverables that is proposed (and any relevant benchmarks/comparators)
  • have a risk profile that is acceptable to the Commonwealth, with any identified risks able to be efficiently and effectively managed.

ANAO’s perspective is that applications that are assessed as ineligible or as not satisfactorily meeting the published merit assessment criteria are most unlikely to represent value with public money in terms of the objectives of the granting activity. Additionally, such practices can adversely affect whether the desired outcomes are able to be achieved.

ANAO also examines whether the grants assessment and selection processes demonstrate a focus on outcomes in the allocation of grants (noting that an outcomes orientation is one of the key principles for grants administration included in the CGGs). One practical way for agencies to demonstrate a focus on outcomes is for briefings to grant decision-makers to address whether the applications recommended for funding are, collectively, expected to result in the programme meeting its key performance targets. For example, there may be situations where the package of recommended applications are eligible, have demonstrated merit and any risks are able to be managed, but funding these projects is not expected to see the programme deliver the extent of the community benefits foreshadowed when the programme was designed and approved for implementation. In these circumstances, ANAO will look to see whether the decision-maker and the relevant Minister (where the Minister is not the decision-maker) were advised of this situation and, if funding is nevertheless awarded, the basis on which it was decided that proceeding to award funding provided value with public money.

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Grants News | 1