Australia: Commonwealth entities get new performance assessment requirements

Key Points:

Commonwealth entities will need to adopt new approaches to corporate planning, risk management and performance assessment under the new Public Governance, Performance and Accountability Act 2013.

As part of a move to establish a coherent and robust performance framework across the Australian Government, new corporate planning, risk management and performance assessment requirements will apply to Commonwealth entities from 1July 2014.

The preliminary sections of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) commenced on 1July 2013, with the operative provisions expected to commence on 1July 2014. The Department of Finance and Deregulation is currently working on the PGPA Rules which are disallowable instruments and are expected to commence on 1July 2014.

The PGPA Act and Rules consolidate the governance, performance and accountability requirements for the Commonwealth, and will replace the Financial Management and Accountability Act 1997 (FMA Act), the Commonwealth Authorities and Companies Act 1997 (CAC Act) and the regulations made under those Acts.

This article focuses on the new performance requirements for Commonwealth entities and does not cover other requirements of the PGPA Act applicable to Commonwealth entities or the framework for Commonwealth companies.

Key concepts under the PGPA Act and Rules

The PGPA Act mainly applies to Commonwealth entities. A "Commonwealth entity" includes both a non-corporate Commonwealth entity (essentially an FMA agency under current terminology) and a corporate Commonwealth entity (essentially a CACAct authority). However, the PGPA Act also contains provisions about planning by, and the accountability of, "Commonwealth companies" (CACAct companies under current terminology).

The PGPA Act contains a number of significant changes in the governance of Commonwealth entities. A single definition of "public resources" is used to apply to all money and all property held by Commonwealth entities, including corporate Commonwealth entities. This is a major change and the rationale for extending this definition to Commonwealth authorities is that their moneys and property are still public resources in the sense that they should be properly managed. The PGPA Act contains provisions on the use and management of public resources by Commonwealth entities, including a uniform set of duties relating to Commonwealth entities, their accountable authorities and their officials.

Every Commonwealth entity has an "accountable authority". This is the Secretary of a department, the person or group of persons prescribed for an agency that is not a department and the Board of a corporate Commonwealth entity. The accountable authority of a Commonwealth entity must govern the entity in a way that promotes the proper use and management of public resources for which the authority is responsible, promotes the achievement of the purposes of the entity and promotes the financial sustainability of the entity. The accountable authority must take into account the effect of its decisions on public resource generally.

Each Commonwealth entity also has "officials" who include officers and employees of the entity, including the accountable authority or members of that authority (as relevant).

New performance requirements

Key elements of the new performance framework for Commonwealth entities are:

  • the Australian Government may, from time to time, publish a statement setting out its key priorities and objectives;
  • each Commonwealth entity must prepare a corporate plan in accordance with the Rules, setting out its objectives, strategies, assumptions, risks and performance targets, and explaining how it will use its resources to achieve the relevant priorities of Government;
  • each Commonwealth entity must prepare budget estimates covering the entity's activities for each reporting period;
  • each Commonwealth entity must prepare annual performance statements, including information about the entity's performance in achieving its purposes, to be tabled in Parliament as part of its annual report;
  • the responsible Minister for a Commonwealth entity or the Finance Minister may request the Auditor-General to examine and report on the entity's annual performance statements (to be tabled by the requesting Minister in each House of the Parliament);
  • each Commonwealth entity must keep records that properly record and explain the entity's performance in achieving its purposes, comply with the Rules and enable the preparation of the annual performance statements; and
  • each Commonwealth entity must establish and maintain an appropriate system of risk oversight and management for the entity.

These requirements for Commonwealth entities are drafted as obligations directly on the entity's accountable authority. The corporate planning requirements have elements consistent with corporate planning practices commonly adopted in the private sector, in that an organisation specifies its vision, its priorities in achieving its vision and its strategies to achieve its priorities, and seeks to align the planning activities and resources of individual corporate units with the priorities of the organisation as a whole.

Practical implications

Many Commonwealth entities currently produce corporate plans – for example, as a GBE under the CAC Act, under their enabling legislation, or in accordance with the Minister's expectations, financial reporting guidelines and better practice for agencies. A first step will be for Commonwealth entities to conduct a gap analysis between their current practices and the requirements of the PGPA Act. Chief Executive Instructions will also need to be updated to reflect the PGPA Act and Rules. A number of important matters of detail remain to be confirmed in the Rules.

An important step for Commonwealth entities will be to clarify their purposes, which are defined to include their objectives, function or role, and consider how their operations and activities relate to the key priorities and objectives set out in the Australian Government statement (as applicable from time to time).

They will also need to determine appropriate metrics to be used in measuring, assessing and reporting on performance, and ensure that their record-keeping processes adequately record and explain their performance and will readily enable a performance audit of the process for selecting appropriate metrics and assessing performance.

Risk management systems should be reviewed to ensure that policies and business processes for identifying, measuring, managing and reporting materials risks, commensurate with the level of risk, are in place.

Commonwealth entities will need to develop a performance reporting timetable alongside their financial reporting timetable, as performance statements will become part of an integrated annual report that brings together information about an entity's strategy, governance and financial and non-financial performance.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.