1 Part I: The Resource Management Framework Resource Management and Budget Training November 2014.
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Transcript of 1 Part I: The Resource Management Framework Resource Management and Budget Training November 2014.
2
Resource Management and Budget Training — Part I
• Commonwealth Resource Management Framework
• The Australian system of government
• Governance arrangements• Appropriations• The PGPA Act• Rules, policy and guidance• Other legislation
Part I: The Resource Management Framework
Part II: Use of public resources
Part III: The Budget process
• The Budget Framework• Planning and budgeting• Implementing and
monitoring• Reporting and
evaluation
• Accountability and performance
• Risk management• Spending relevant money• Managing relevant property• Compliance reporting
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Resource Management and Budget Training — Part I
Contact and acknowledgement information
©Commonwealth of Australia 2014 All material produced by the Department of Finance (Finance) constitutes copyright administered by Finance. Finance reserves the right to set out the terms and conditions for the use of such material. Apart from any use permitted under the Copyright Act 1968, and those explicitly granted herein, all other rights are reserved.
Unless otherwise noted, all material in this publication, except the Commonwealth Coat of Arms, and any material protected by a trademark is licensed under the Creative Commons BY SA Attribution Share Alike 4.0 Australia Licence. Details of this licence are available at: http://creativecommons.org/licenses/by-sa/4.0/. Enquiries For enquiries or suggestions about this presentation, please contact [email protected]
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Resource Management and Budget Training — Part I
• Commonwealth Resource Management Framework
• The Australian system of government
• Governance arrangements• Appropriations• The PGPA Act• Rules, policy and guidance• Other legislation
Part I: The Resource Management Framework
Part II: Use of public resources
Part III: The Budget process
• The Budget Framework• Planning and budgeting• Implementing and
monitoring• Reporting and
evaluation
• Accountability and performance
• Risk management• Spending relevant money• Managing relevant property• Compliance reporting
Resource Management and Budget Training Overview
5
Resource Management and Budget Training — Part I
• Commonwealth Resource Management Framework
• The Australian system of government
• Governance arrangements• Appropriations• The PGPA Act• Rules, policy and guidance• Other legislation
Part I: The Resource Management Framework
Part II: Use of public resources
Part III: The Budget process
• The Budget Framework• Planning and budgeting• Implementing and
monitoring• Reporting and
evaluation
• Accountability and performance
• Risk management• Spending relevant money• Managing relevant property• Compliance reporting
Commonwealth Resource Management Framework
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Resource Management and Budget Training — Part I
Activity: Introduction to the framework
Commonwealth Resource Management Framework
Museum of Millennium Technology
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Resource Management and Budget Training — Part I
What are public resources?
Relevant property • property owned or held by the Commonwealth
or a corporate Commonwealth entity• includes real property, personal property
and intellectual property
Relevant money• money held as cash or in a bank account
by the Commonwealth or a corporate Commonwealth entity
Appropriations• authority to draw money from
the Consolidated Revenue Fund
Commonwealth Resource Management Framework
8
Resource Management and Budget Training — Part I
Why is a resource management framework important?
We use and manage taxpayers money – must have regard to the public interest, require a framework that supports:
• planning
• improved decision making
• improved use of resources
• mitigation of risks
• accountability
Commonwealth Resource Management Framework
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Commonwealth Resource Management Framework
Commonwealth Resource Management Framework
Legislative instruments Policy
Entity internal controls
reporting and evaluation
planning objectives and strategies
budgeting and operational planning
implementing and monitoring
PUBLIC RESOURCES
accountabilitygovernance
performancerisk management
appropriations
procurement
proper use
commitments
efficiency
earned autonomy
spendinggrants management
property management transparencyaudit
cooperation with others
Appropriationacts
PGPA Act Otherlegislation
Constitution
10
Resource Management and Budget Training — Part I
• Commonwealth Resource Management Framework
• The Australian system of government
• Governance arrangements• Appropriations• The PGPA Act• Rules, policy and guidance• Other legislation
Part I: The Resource Management Framework
Part II: Use of public resources
Part III: The Budget process
• The Budget Framework• Planning and budgeting• Implementing and
monitoring• Reporting and
evaluation
• Accountability and performance
• Risk management• Spending relevant money• Managing relevant property• Compliance reporting
The Australian system of government
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Resource Management and Budget Training — Part I
Three tiers of government
Commonwealth Government• make laws for the whole of Australia
6 state and 2 territory governments• make laws for their state or territory
Over 560 local governments• make laws (by-laws) for their region or district
The Australian system of government
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Resource Management and Budget Training — Part I
Commonwealth powers
Commonwealth powers defined in Constitution (s51)
Most other law making powers reserved for states
The Australian system of government
• trade and commerce• taxation• postal and
telecommunications services
• foreign policy • census and statistics
• weights and measures• bankruptcy and
insolvency• quarantine • lighthouses, lightships,
beacons and buoys
• fisheries• currency• copyright• marriage• immigration• defence
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Resource Management and Budget Training — Part I
Commonwealth state relations
Guided by Council of Australian Governments (COAG)• Prime Minister, state premiers and territory chief ministers• policy reforms requiring cooperation among governments
Intergovernmental Agreement on Federal Financial Relations (FFR)
• framework for policy between Australian Government and states• financial relations and payment arrangements
The Australian system of government
14
Executive accountable to the Parliament
Separation of powers
The Australian system of government
Executive accountable to the Parliament
Executive administer the laws made by
Parliament
Executive appoint
the Judiciary
Judges may be removed by the vote of both Houses of Parliament on the grounds of proved misbehaviour or incapacity
Judiciary interpret the
laws
Constitution
Legislative
Legislative power to makes the laws
exercised by
• Governor General • House of
Representatives• Senate
Executive
Executive power exercised by
• Governor General
as advised by• Prime Minister• Ministers and
Parliamentary Secretaries
• officials in Commonwealth entities
Judiciary
Judicial power exercised by
• High Court of Australia
• Federal Court• Family Court and
Federal Magistrates service
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Resource Management and Budget Training — Part I
• Commonwealth Resource Management Framework
• The Australian system of government
• Governance arrangements• Appropriations• The PGPA Act• Rules, policy and guidance• Other legislation
Part I: The Resource Management Framework
Part II: Use of public resources
Part III: The Budget process
• The Budget Framework• Planning and budgeting• Implementing and
monitoring• Reporting and
evaluation
• Accountability and performance
• Risk management• Spending relevant money• Managing relevant property• Compliance reporting
Governance arrangements
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Resource Management and Budget Training — Part I
Governance arrangements: portfolios
Each portfolio:• at least one Department of State• other Commonwealth entities• may have Commonwealth companies
The Australian system of government
Foreign Affairs and TradeHealthImmigration and Border ProtectionIndustryInfrastructure and Regional DevelopmentPrime Minister and CabinetSocial Services (includes Human Services)Treasury
Administrative Arrangements
Order
AgricultureAttorney-GeneralsCommunicationsDefence (includes Veterans’ Affairs)EducationEmploymentEnvironmentFinance
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Governance arrangements: types of Commonwealth bodies
The Australian system of government
corporate Commonwealth
entities
Commonwealth companies
non-corporate Commonwealth
entities
Commonwealth entities
coercive or regulatory powers?
commercial focus?
requires a governing board?
?within the general government sector?
fits within existing entity or company?
partnership with others?
enabling legislation?
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Resource Management and Budget Training — Part I
Non-corporate Commonwealth entities
Part of the Commonwealth • not legally and financially separate• not a body corporate• officials employed under the Public Service Act
or the entities’ enabling legislation
Includes:• Departments of State e.g. Finance, AGD, PM&C• Parliamentary Departments established by
Parliamentary Service Act• other entities listed in legislation and in
the PGPA Rule, e.g. ANAO, AEC, APSC, ABS
The Australian system of government
100non-corporate
Commonwealthentities
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Resource Management and Budget Training — Part I
Corporate Commonwealth entities
Legally and financially separate from the Commonwealth• a body corporate established by legislation for a public purpose• officials engaged under entities’ enabling legislation or
the Public Service Act
The Australian system of government
74 corporate Commonwealth entities
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Resource Management and Budget Training — Part I
Commonwealth companies
Legally and financially separate from the Commonwealth• Commonwealth controlled companies established under the
Corporations Act 2001• does not include subsidiaries
The Australian system of government
19 Commonwealth companies
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Resource Management and Budget Training — Part I
Commonwealth public sector
General government sector• most Commonwealth
entities and companies• provide non-market public
services• funded mainly through taxes
Government business enterprises (GBEs)
• public sector• provide market services • for profit
The Australian system of government
General government sector (GGS)
corporate Commonwealth entities Commonwealth companies
non-corporate Commonwealth entities
Government business enterprises (GBEs)
Public non-financial corporations
Public financial corporations
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Resource Management and Budget Training — Part I
Commonwealth public sector
Public financial corporations• trade in financial assets and
liabilities• operate in financial marketse.g. Reserve Bank of Australia
and other borrowing authorities
Public non-financial corporations
• provide goods and services on a commercial basis
• non-regulatory, non-financial in nature
e.g. NBN Co
The Australian system of government
General government sector (GGS)
corporate Commonwealth entities Commonwealth companies
non-corporate Commonwealth entities
Government business enterprises (GBEs)
Public non-financial corporations
Public financial corporations
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Commonwealth public sector
The Australian system of government
Australian Competition and Consumer Commission (ACCC) Australian Prudential Regulation Authority (APRA) Australian Securities and Investments Commission (ASIC)
Bodies corporate deemed as non-corporate
74 corporate Commonwealth entities 19 Commonwealth companies
8 government business enterprises (GBEs)
Departments of stateParliamentary departmentsListed entities
13 other Commonwealth companies
Defence Housing Authority (DHA)
63 other corporate Commonwealth entities
Airservices Australia Albury-Wodonga Development Corp Australian Hearing Services
Australian Government Solicitor (AGS)
Australian Postal Corporation
ASC Pty Ltd Australian Rail Track Corp Ltd Moorebank Intermodal Co Ltd NBN Co Ltd
Medibank Private Ltd Australian Reinsurance Pool Corp Export Finance and Insurance Corp Coal Mining Industry (Long Service
Leave Funding) Corp Reserve Bank of Australia (RBA)
Australian National University (ANU)
Australian River Co Ltd
Publ
ic
finan
cial
co
rps
Gen
eral
gov
ernm
ent
sect
or High Court of Australia
100 non-corporate Commonwealth entities
Publ
ic
non-
finan
cial
co
rps
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Resource Management and Budget Training — Part I
Activity: Australia Post
The Australian system of government
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Resource Management and Budget Training — Part I
• Commonwealth Resource Management Framework
• The Australian system of government
• Governance arrangements• Appropriations• The PGPA Act• Rules, policy and guidance• Other legislation
Part I: The Resource Management Framework
Part II: Use of public resources
Part III: The Budget process
• The Budget Framework• Planning and budgeting• Implementing and
monitoring• Reporting and
evaluation
• Accountability and performance
• Risk management• Spending relevant money• Managing relevant property• Compliance reporting
Appropriations
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Resource Management and Budget Training — Part I
Legislative instruments Policy
Entity internal controls
reporting and evaluation
planning objectives and strategies
budgeting and operational planning
implementing and monitoring
PUBLIC RESOURCES
accountabilitygovernance
performancerisk management
appropriations
procurement
proper use
commitments
efficiency
earned autonomy
spendinggrants management
property management transparencyaudit
cooperation with others
Appropriationacts
PGPA Act Otherlegislation
Constitution
Appropriation acts
• authority to draw money from the Consolidated Revenue Fund (CRF)
• two types: annual and special
Appropriations
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Resource Management and Budget Training — Part I
The flow of money
Revenue and receipts:• ‘All revenues or moneys raised or received by
the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund’ (s. 81 Constitution)
Appropriations
Consolidated Revenue Fund
Non-tax revenue (fines and penalties,
commercial charging, cost recovery)
General taxation
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Resource Management and Budget Training — Part I
The flow of money
To access money in the CRF:• must be appropriated for the purposes
of the Commonwealth (s. 81 Constitution)• can only be spent if supported by an appropriation made by law,
i.e. relevant legislative authority (s. 83 Constitution)
Appropriations
Consolidated Revenue Fund
Other acts with special
appropriations
Annual appropriations
acts
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Resource Management and Budget Training — Part I
Annual appropriations
• departmental items• administered items
– payments to corporate entities
Appropriations
Governmentservices
Parliamentary services
e.g. Appropriation (Parliamentary Departments)
Act (No. 1) Ordinary annual services
of the government e.g. Appropriations Acts
(No 1) & (No 3)
Other Purposes
e.g. Appropriations Acts (No 2) & (No 4)
• new administered outcomes• non-operating
– capital costs & equity injections – payments to corporate entities– some payments to states,
territories and local governments
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Resource Management and Budget Training — Part I
Special appropriations
Appropriations
established by determination of the
Finance Minister e.g. Reef Trust Special Account
2014 (Environment) Finance Minister Determination 2014/01
established by legislation other than annual appropriation acts
• most are unlimited in amounte.g. aged pension, Social Security Act
• Some are limited by amounte.g. salaries for independent statutory
office holders such as High Court judges, Judges' Pensions Act
• limited by time e.g. Australian Renewable Energy Act
established by legislation
e.g. Aboriginal Benefit Account (PM&C) Aboriginal Land Rights Act 1976
Special appropriations Special accounts
32
Resource Management and Budget Training — Part I
• Commonwealth Resource Management Framework
• The Australian system of government
• Governance arrangements• Appropriations• The PGPA Act• Rules, policy and guidance• Other legislation
Part I: The Resource Management Framework
Part II: Use of public resources
Part III: The Budget process
• The Budget Framework• Planning and budgeting• Implementing and
monitoring• Reporting and
evaluation
• Accountability and performance
• Risk management• Spending relevant money• Managing relevant property• Compliance reporting
The PGPA Act
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Resource Management and Budget Training — Part I
The PGPA Act
• primary piece of Commonwealth resource management legislation– replaced the FMA Act and the CAC Act on 1 July 2014
• establishes a coherent system of governance and accountability• greater focus on planning, performance and reporting
The PGPA Act
Legislative instruments Policy
Entity internal controls
reporting and evaluation
planning objectives and strategies
budgeting and operational planning
implementing and monitoring
PUBLIC RESOURCES
accountabilitygovernance
performancerisk management
appropriations
procurement
proper use
commitments
efficiency
earned autonomy
spendinggrants management
property management transparencyaudit
cooperation with others
Appropriationacts
PGPA Act Otherlegislation
Constitution
34
Resource Management and Budget Training — Part I
Key elements of the PGPA Act
• Government operates as a coherent whole
• maintain the operational independence of entities
• apply a uniform set of duties to accountable authorities and officials
• clarify the definition of public resources
The PGPA Act
• establish systems of risk management
• emphasise performance monitoring, evaluation and reporting
• cooperate and partner to achieve common objectives
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Resource Management and Budget Training — Part I
Objectives for entities and companies
• meet high standards of governance, performance and accountability
• provide meaningful information to Parliament and the public
• use and manage public resources properly• work cooperatively with others to achieve
common objectives
The PGPA Act
• meet high standards of governance, performance and accountability
corporate Commonwealth
entities
Commonwealth companies
non-corporate Commonwealth
entities
Section
5
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Resource Management and Budget Training — Part I
PGPA Act applies to...
Accountable authorities• person or body that is the head of a
Commonwealth entity• typically secretaries and governing bodies
Officials• officers, employees or members of an entity• includes accountable authorities• excludes Ministers and judges
The PGPA Act
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Resource Management and Budget Training — Part I
Uniform duties: accountable authorities
Responsibilities and powers to promote high standards of accountability and performance:
• responsible for the financial management of the entity• meeting reporting requirements
General duties:• govern the entity• establish and maintain systems relating to risk and control • encourage cooperation and partnering• minimise red tape• keep the responsible Minister and Finance Minister
informed
Accountability
Sections
15-19
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Resource Management and Budget Training — Part I
Uniform duties: officials
PGPA Act requires officials of Commonwealth entities to meet high standards of governance, performance and accountability
Officials are required to:• act with care and diligence of a reasonable person • act honestly, in good faith and for proper purpose • not misuse position or information• disclose material personal interests
Accountability
Sections
25-29
39
Resource Management and Budget Training — Part I
• Commonwealth Resource Management Framework
• The Australian system of government
• Governance arrangements• Appropriations• The PGPA Act• Rules, policy and guidance• Other legislation
Part I: The Resource Management Framework
Part II: Use of public resources
Part III: The Budget process
• The Budget Framework• Planning and budgeting• Implementing and
monitoring• Reporting and
evaluation
• Accountability and performance
• Risk management• Spending relevant money• Managing relevant property• Compliance reporting
Rules, policy and guidance
40
Resource Management and Budget Training — Part I
Rules and instruments
PGPA Rule 2014• made by Finance Minister• apply to some or all entities and companies• can be disallowed by Parliament
Other instruments (also called rules) :• Commonwealth Procurement Rules (CPRs)• Commonwealth Grants Rules and Guidelines (CGRGs)
• made by Finance Minister• apply to non-corporate entities (and some corporate entities)• cannot be disallowed by Parliament
Rules, policy and guidance
41
Resource Management and Budget Training — Part I
PGPA Rule 2014
Establishes further accountability and control mechanisms including:• setting minimum requirements for dealing with fraud• requiring accountable authorities to pursue debts• setting how officials should disclose interests• setting minimum requirements for audit committees• requiring records of approvals to commit relevant money• requiring money received to be banked promptly• setting amounts non-corporate Commonwealth entities can retain• setting restrictions around borrowing, investment and obtaining insurance• setting the events ministers must inform Parliament about
Also lists:• GBEs, some entities (and their accountable authorities), law enforcement
agencies• corporate Commonwealth entities subject to the CPRs.
Rules, policy and guidance
42
Resource Management and Budget Training — Part I
Commonwealth Procurement Rules
Applies to:• all non-corporate Commonwealth entities• corporate Commonwealth entities prescribed
in the PGPA Rule• the entire process for procuring
goods and/or services
Combines good practice with Australia's international obligations:
• Division 1 sets the rules for all procurements• Division 2 sets out additional rules for
procurements above relevant thresholds
Rules, policy and guidance
43
Resource Management and Budget Training — Part I
Commonwealth Grants Rules and Guidelines
Rules, policy and guidance
Applies to non-corporate Commonwealth entities and grants administration performed by:
• ministers• accountable authorities and officials in
those entities• third parties who administer grants on
behalf of the Commonwealth.
Is divided into two parts:• Part 1 sets out the mandatory requirements • Part 2 explains how accountable authorities
and officials should apply the seven principles of grants administration.
44
Resource Management and Budget Training — Part I
Other legislative instruments
Determinations made by the Finance Minister:• to adjust annual appropriations to follow the transfer of
functions (not subject to disallowance)• to establish, vary or revoke special accounts (special
commencement and disallowance arrangements)
Government policy orders made by the Finance Minister:• to apply government policies to some or all corporate
Commonwealth entities or Commonwealth companies• not subject to disallowance by Parliament
Rules, policy and guidance
Sections
78-79
Sections
22&93
Section
75
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Resource Management and Budget Training — Part I
Government policies
Non-corporate Commonwealth entities must act in a way that is not inconsistent with the policies of the Australian Government, e.g. • whole-of-government arrangements for goods and services • on-time payment policy for small business
Corporate Commonwealth entities only required to comply with policies if directed by a Finance Minister government policy order
Rules, policy and guidance
Section
21
Section
22
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Resource Management and Budget Training — Part I
PGPA Act guidance
www.finance.gov.au/resource-management/
www.finance.gov.au/resource-management/training/
Rules, policy and guidance
47
Resource Management and Budget Training — Part I
• Commonwealth Resource Management Framework
• The Australian system of government
• Governance arrangements• Appropriations• The PGPA Act• Rules, policy and guidance• Other legislation
Part I: The Resource Management Framework
Part II: Use of public resources
Part III: The Budget process
• The Budget Framework• Planning and budgeting• Implementing and
monitoring• Reporting and
evaluation
• Accountability and performance
• Risk management• Spending relevant money• Managing relevant property• Compliance reporting
Other legislation
Legislative instruments Policy
Entity internal controls
reporting and evaluation
planning objectives and strategies
budgeting and operational planning
implementing and monitoring
PUBLIC RESOURCES
accountabilitygovernance
performancerisk management
appropriations
procurement
proper use
commitments
efficiency
earned autonomy
spendinggrants management
property management transparencyaudit
cooperation with others
Appropriationacts
PGPA Act Otherlegislation
Constitution
48
Resource Management and Budget Training — Part I
Other legislation: process
Budget• Charter of Budget Honesty Act 1998
Particular uses of public resources• Lands Acquisition Act 1989
• Taxation laws including A New Tax System (Goods and Services Tax) Act 1999
Other legislation
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Resource Management and Budget Training — Part I
Other legislation: pPayments tostates and territories
Other legislation
National Partnership Payments
National Specific Purpose Payments (SPPs)
• annual and ongoing payments for states for use in key service delivery sectors such as:― health― education― skills and training― disability services― affordable housing
General RevenueAssistance
• payments to states for specific purposes, to:― to support projects― facilitate major reforms ― reward jurisdictions that
deliver on nationally significant reforms
• payments to states that can be used for any purpose
e.g. GST collected by the Commonwealth and distributed to the states
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Resource Management and Budget Training — Part I
Other legislation: accountability
Audit• Auditor-General Act 1997 & Public Accounts and Audit Act 1951
Review of government decision• Ombudsman Act 1976, AAT Act 1975, ADJR Act• Judiciary Acts 1903
Management of information• Privacy Act 1988, Archives Act 1983, FOI Act 1982, secrecy laws
Penalties• Crimes Act 1914
Other legislation
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Resource Management and Budget Training — Part I
Other legislation: employment frameworks
Other legislation
• Public Service Act 1999
• enabling legislation
• Corporations Act 2001• State or territory
framework where the company is registered
corporate Commonwealth
entities
Commonwealth companies
non-corporate Commonwealth
entities
• Public Service Act 1999
• enabling legislation
53
Resource Management and Budget Training — Part I
• Commonwealth Resource Management Framework
• The Australian system of government
• Governance arrangements• Appropriations• The PGPA Act• Rules, policy and guidance• Other legislation
Part I: The Resource Management Framework
Part II: Use of public resources
Part III: The Budget process
• The Budget Framework• Planning and budgeting• Implementing and
monitoring• Reporting and
evaluation
• Accountability and performance
• Risk management• Spending relevant money• Managing relevant property• Compliance reporting
Wrap up
Legislative instruments Policy
Entity internal controls
reporting and evaluation
planning objectives and strategies
budgeting and operational planning
implementing and monitoring
PUBLIC RESOURCES
accountabilitygovernance
performancerisk management
appropriations
procurement
proper use
commitments
efficiency
earned autonomy
spendinggrants management
property management transparencyaudit
cooperation with others
Appropriationacts
PGPA Act Otherlegislation
Constitution
54
Resource Management and Budget Training — Part I
Questions and feedback
? Excellent Very good Good Average Poor
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Resource Management and Budget Training — Part I
Further information
Department of Finance• finance.gov.au
Australian Government Budget• budget.gov.au
Public management reform• pmra.finance.gov.au
Resource Management and Budget training• finance.gov.au/resource-management/training
Wrap up