Centrally Commissioned Processes and Reviews for the Australian Government High-Level Overview

Centrally Commissioned Processes and Reviews for the Australian Government

High-Level Overview
September 2013

Further Information:

Website:

Email:

Assurance Reviews Branch

Implementation and Performance Improvement Division

Financial Management Group

Department of Finance

John Gorton Building, King Edward Terrace

PARKES ACT 2600

Copyright

ISBN 978-1922096-14-2 (Online)

With the exception of the Commonwealth Coat of Arms and the Department of Finance’s logo, all material in this publication is licensed under a Creative Commons Attribution 3.0 Australia licence (CC BY 3.0).

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Attribution

This publication and any material obtained from it must be attributed as: the Commonwealth of Australia 2012, Department of Finance, Centrally Commissioned Processes and Reviews for the Australian Government High-Level Overview

Use of the Coat of Arms

The terms under which the Coat of Arms can be used are detailed on the following website:

Contents

Foreword

Figure 1: High-Level Process Map

Figure 2: High-Level Process Overview

Figure 3: Process Map 1: Planning / Design

ICT Two Pass Review (First Pass)

Property Framework Two Pass (First Pass)

Figure 4: Process map 2: Resourcing / Decision Making

Risk Potential Assessment Tool (RPAT)

Implementation Plans

Regulatory Impact Statements (RIS)

ICT Two Pass Review (Second Pass)

Property Framework Two Pass (Second Pass)

Gateway Reviews (Pre-decision)

Implementation Readiness Assessments (IRAs)

Figure 5: Process Map 3: Implementation

Gateway Reviews

Figure 6: Process Map 4: Evaluation / Reporting

Gateway Reviews

Agency Capability Reviews

Agency Capability Initiative (P3M3®)

Strategic Review

Figure 7: Appendix A: Calendar of Budget Process
and Indicative timing

Foreword

Implementation and delivery of Australian Government policy initiatives is one of the key responsibilities of Government agencies. The planning processes and advice leading up to Cabinet decisions are critical in setting the path for effective program implementation, but there are separate aspects of program delivery that need to be addressed in the implementation phase after Cabinet’s decision has been made.

External assurance can add important new insights to internal control, as well as an independent perspective. It may in some cases act as a catalyst for lead agencies to bring together the different elements of the policy-to-delivery chain. An integrated approach to assurance which selects the right tool at the right time will enhance the prospects of the implementation program achieving the intended policy outcomes. Not every program or project would need a centrally commissioned review and assurance process; these would need to be applied judiciously and for good purpose.

The processes and reviews included in this document reflect those that are not well understood by the public sector, and which have a common theme aimed at strengthening policy development, planning and implementation. Each of the processes and reviews has a fit for purpose aspect which highlights the importance and need for each process.

The intent for this handbook is to provide a high-level overview for each process or review (visually and succinctly). This information may assist the reader to better understand the circumstance that the processes and reviews are applied, where to seek further detailed information and the general timing for these in order to plan and prepare for them.

The handbook is structured to provide:

• A high-level process map which aligns the centrally commissioned processes and reviews to a management planning cycle and which allows the reader to quickly identify how these processes engage during the management phases for delivery. Refer to High-level Process Map;
• A high-level process overview which allows the reader to identify (in a Budget Process context) whether the process or review occurs before or after Cabinet deliberation, the primary audience they inform and the broad focus for the process or review. Refer to High-level Process Overview;
• Process flow maps and detail regarding each process and review aligned to the management planning cycle. These sections provide a level of granularity to allow the reader to better understand each process (base level understanding) and how these processes engage; and
• A Budget process map with indicative timing of key events has been provided to further assist understanding and planning processes. Refer to Appendix A: Calendar of Budget Process and Indicative Timing.

The information contained within the handbook is not exhaustive and should only be used to guide the conduct to a review and not as a definitive approach[1]. Further information and assistance on the centrally commissioned processes and reviews and their application can be sought from the responsible agency website, links have been provided for each process described in the detailed section of this document under the category of ‘Responsible Agency’.

1

Figure 1:High-Level Process Map

High-level overview reflecting the management cycle and the centrally commissioned processes and reviews which engage with each phase.

Process Map 1 / Process Map 2 / Process Map 3 / Process Map 4 / Return to Contents

1

Figure 2:High-Level Process Overview

High-level overview reflecting indicative timing related to Government decision points, the primary purpose, audience and level of focus for each centrally commissioned process/review.

High Level Process Map / Process Map 1 / Process Map 2 / Process Map 3 / Process Map 4 / Return to Contents

1

Figure 3:Process Map 1: Planning / Design

High Level Process Map / Process Map 2 / Process Map 3 / Process Map 4 / Return to Contents

1

ICT Two Pass Review (First Pass)

Supports Cabinet’s decisions on major information and communication technology (ICT) - enabled proposals by providing staged consideration and information on the benefits, costs, risks and agencies’ delivery capability.

Planning / Design | 1

Entry point

Applies to proposals, that:

• are ICT-enabled
• have a total project cost estimated to be $30 million or more, including ICT costs of at least $10 million; and
• involve high risks.

The Cabinet may also apply the process to proposals that have a total project cost estimated to be less than $30 million.

Primary Audience

Provides Government with a comprehensive analysis to facilitate informed decision making.

Assists agencies to develop robust business cases for ICT- enabled proposals that address the business need, options and implementation.

Intensity

Agencies advise Finance of ICT investment intentions.

Agencies then develop an Initial Business Case (First Pass) and Cabinet submission seeking Cabinet’s in-principle agreement to develop options for Second Pass consideration.

Financial Management and Accountability Act 1997 (FMA Act) agencies with annual ICT spends of over $2 million must have their current capability independently validated using the Portfolio, Programme and Project Management Maturity Model (P3M3®).

Synergy

First Pass processes and requirements inform NPPs and Cabinet submissions.

P3M3® assessments and capability improvement plans inform consideration of agencies’ capability in ICT Two Pass.

If commissioned, IRAs and pre-decision Gateway reviews can provide assurance to the agency and will inform the business cases and Cabinet submissions required at First and Second Pass.

Business cases and implementation plans will inform each other.

The Risk Potential Assessment Tool (RPAT) will inform assessment of the risk entry criteria but more detailed ICT and other information will be sought from agencies.

Timing

From June of each year, agencies notify Finance of ICT investment intentions.

Finance issues deadlines for ICT Two Pass Business Cases and Cabinet submissions in the Budget timetable, generally:

• September/October, agencies submit draft First Pass Business Cases to Finance for review.
• January/February, agencies submit final First Pass Business Cases and lodge Cabinet submissions seeking first-pass approval.

First Pass approval provides authority to develop options for Second Pass consideration.

Key elements

Agencies’ first pass proposals and business cases address the business need and options to deliver the proposal’s outcomes, including their costs, benefits and risks. Agencies include a broad, through-life cost estimate and an indicative schedule for each ICT option.

FMA Act agencies with annual ICT spend over $2 million must use P3M3® to identify any risks to the proposals from weaknesses in their organisational capability and identify strategies to address the risks.

Responsible Agency

Two Pass Review - Department of Finance

Planning / Design | 1

Property Framework Two Pass (First Pass)

The Property Framework includes a number of policies. The application of Cost Benefit analysis and the Two Stage Capital Works Approval Process support Cabinet’s decisions on major construction projects, and provide a methodological approach to developing scope and cost associated, reducing risk and increasing cost certainty.

Planning / Design | 1

Entry Point

Applies to all FMA Act agencies proposing to own, lease or dispose of property and which meet the following thresholds.

The Property Framework and the Department of Defence Two Stage Capital Works Process thresholds (excluding fit-out) are greater than $30 million for non-Defence and greater than $100 million for Defence, and following an assessment of risk and cost benefit analysis.

Where the Commonwealth is considering a build or ownership option, the proponent agency also undertakes the First Stage of the Two Stage Capital Works Approval Process.

Primary Audience

Provides Government with comprehensive analysis to facilitate informed decision making.

Assists agencies to develop robust business cases before investing in large scale property projects.

Intensity

Agencies develop Initial Cost Benefit Analysis in consultation with Finance, commensurate with size and scope of project.

Agencies must also consult with Finance when developing Initial Business Case for Commonwealth build option.

Agencies then develop an Initial Business Case (First Pass) and Cabinet submission seeking Cabinet’s in-principle agreement to develop options for Second Pass consideration.

Synergy

Cost Benefit Analysis and First Pass processes will inform NPPs and Cabinet submissions.

If commissioned, IRAs and pre-decision Gateway reviews can provide assurance to the

agency and will inform the business cases and Cabinet submissions required at First and Second Pass.

The RPAT will inform the risk assessment and more detailed information is provided by the Initial Business Case submitted by the agency.

Timing

The Cost Benefit Analysis of property options is to be undertaken with sufficient lead time to enable the build/ownership or lease options to be pursued.

The First Stage involves the relevant Portfolio Minister seeking Cabinet’s in-principle agreement to develop a project concept for further consideration by Cabinet.

First Stage approval does not provide authority to proceed with the project, merely the authority and initial funding to gather the data necessary to make an informed decision at Second-Stage consideration.

Key Elements

Agencies undertake Cost Benefit Analysis processes on a whole-of-life basis to inform project options.

When pursuing a build or ownership option the Initial Business Case is developed to identify the options and alternatives, underpinned by primary analysis of each option.

It establishes the foundation for the efficient, effective, sustainable and ethical use of Commonwealth property resources.

It also provides appropriate information – specifically in the area of cost, schedule, implementation and risk for capital works.

Responsible Agency

Commonwealth Property Management Framework - Department of Finance

Planning / Design | 1

Figure 4:Process map 2: Resourcing / Decision Making

High Level Process Map / Process Map 1 / Process Map 3 / Process Map 4 / Return to Contents

1

Risk Potential Assessment Tool (RPAT)

The RPAT helps agencies to determine and communicate the potential risk of a proposal to ministers before seeking Cabinet’s agreement.

Resourcing / Decision Making |1

Entry Point

Ministers and their agencies are required to include a statement of risk with each new policy proposal (NPP).

The RPAT is a tool to assist with this requirement.

Primary Audience

Provides Government with an assessment of risk and mitigation strategies at the time approval is being sought.

Assists agency risk identification.

Intensity

The RPAT is an automated form that contains 20 mandatory questions. It is a high-level tool to assist the identification of risk and mitigation strategies, and to communicate the consequences if risk were to eventuate.

Synergy

The RPAT’s summary output is to be included in agencies’ NPPs (and can be included in Cabinet submissions).

Agencies are to provide the full RPAT to Finance where unmitigated risks are assessed to be medium or higher.

The RPAT is also used to determine whether assurance reviews might be commissioned to assist agencies’ delivery or determine where an implementation plan will be required in NPPs and submissions.

Additional risk and other information will be required from agencies for Two Pass processes.

Timing

Agencies must complete the tool for each NPP they propose to bring forward to Cabinet.

Key Elements

The RPAT will assist agencies to identify the key sources of risk and likelihood; the consequences were the risks to materialise and mitigation strategies to address the risk.

Responsible Agency

Advice regarding Cabinet submission and NPP requirements is provided through the Department of the Prime Minister and Cabinet.

The RPAT tool and guidelines can be sourced from: Risk Potential Assessment Tool Assessment Tool (RPAT) - Department of Finance

Resourcing / Decision Making |1

Implementation Plans

An implementation plan is a management tool for a specific policy measure, or package of measures, designed to assist agencies to plan for, manage and monitor implementation effectively.

Resourcing / Decision Making |1

Entry Point

All Cabinet submissions that have significant implementation risks or challenges must include implementation plans.

For the most part, the level of implementation planning will be a judgement made by drafters. However, for proposals with significant implementation risks or challenges, PM&C may request additional information on implementation planning before a submission is considered by the Cabinet.

Primary Audience

Provides Government with information about an agency’s preparations for implementation.

Assists agency implementation planning.

Intensity

A key principle for implementation planning is that the level of detail is commensurate with the proposal’s size, complexity and risk.

The riskier the program, the more rigour Cabinet will require on implementation design and oversight, and with the engagement of key stakeholders such as service delivery agencies.

Synergy

The key elements for implementation plans are complementary to requirements in NPPs and Cabinet submissions for details on implementation, risks and mitigation.

An agency’s RPAT will inform whether an implementation plan is required.

Timing

Agencies when required must include the implementation plan when seeking to bring forward a submission to Cabinet.

Key Elements

These plans will address the seven principles of best practice implementation:

1. Governance.
2. Planning.
3. Management controls.
4. Resource management.
5. Risk management.
6. Stakeholder engagement.
7. Review, monitoring, evaluation.

Responsible Agency

The Department of the Prime Minister and Cabinet

Resourcing / Decision Making |1

Regulatory Impact Statements (RIS)

A RIS is a document that is prepared by the department, agency, statutory authority or board responsible for a regulatory proposal. It is prepared following consultation with affected parties.

Planning / Design | 1

Entry Point

Agencies are to prepare a RIS for proposals that are likely to have a regulatory impact on business or the not-for-profit sector.

Exemptions from the RIS requirements for exceptional circumstances can only be granted by the Prime Minister in writing.

Primary Audience

Assists decision makers and the agency to identify and justify the impact of a proposal.

Provides information to the community.

Intensity

The level of analysis, including consultation, should be commensurate with the complexity and significance of the proposal being addressed.

Synergy

The key elements for a RIS are complementary to information requirements for new policy proposals (NPPs) and Cabinet submissions.

If commissioned, an IRA or pre-decision Gateway review can provide assurance to the agency and will assist in finalising these statements.

Timing

Agencies must present the RIS to the decision maker at the time the decision is made.

Regulatory decisions can be made by Cabinet, individual ministers or agencies, and may occur throughout the year.

Key Elements

RIS are to address the following seven key elements:

• Why is the action required?
• What is/are the desired objective(s)?
• What are the options?
• An assessment of its impact.
• A consultation statement.
• A recommended option.
• A strategy to implement and review.

Responsible Agency

Office of Best Practice Regulation - Department of Finance

Planning / Design | 1

ICT Two Pass Review (Second Pass)

Supports Cabinet’s decisions on major ICT-enabled proposals by providing staged consideration and information on the benefits, costs, risks and agencies’ delivery capability.

Resourcing / Decision Making |1

Note: Where information is consistent with earler processes we have not duplicated the content. For information related to Entry Point, Primary Audience, and Synergy, see page 8ICT Two Pass Review (First Pass).

Intensity