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Policy, Plans and Procedure / IGT officials / General / Corporate Governance

INSPECTOR-GENERAL OF TAXATION – POLICY, PLANS and PROCEDURES

ACCOUNTABLE AUTHORITY INSTRUCTIONS 2014-16

Instructions endorsed and approved

Last reviewed December 2014

Introduction

1.The purpose of this document is to establish an administrative framework for the delegation of the Inspector-General of Taxation(IGT)Accountable Authority’s(AA) statutory powers under the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

2.The other purpose of this document is to ensure officials (including all IGT staff and relevant Treasury service provider staff) are aware of other legislation and regulation, as well as IGT policies, plans and procedures (PPP) which they are required to comply with.

3.The PGPA Act[1] places a duty upon the AA to govern in a way that:

(a)promotes the proper use and management of public resources for which the AA is responsible;

(b)promotes the achievement of the purposes of the entity; and

(c)promotes the financial sustainability of the entity.

4.In making decisions for the above purposes, the AA must take into account the effect of those decisions on public resources generally.

5.The powers are provided directly by the PGPA Act[2] or indirectly by way of delegation by the Finance Minister.

6.Accountable Authority Instructions (AAIs) may be issued by accountable authorities to officials (including all staff members) to enable and effect the application of the key principles and requirements of the resource management framework in their agency’s operations.

Compliance by officials with delegations and AAIs is mandatory.

Official is defined in section 13 of the PGPA Act to mean an individual who is in, or forms part of, the entity. This includes the AA, all persons employed by the IGT (staff members) and any person who performs a financial task on behalf of the IGT, including Treasury service provider staff.

7.A diagrammatic overview of how this document fits within the legal infrastructure for this framework is outlined in the appendix atFigure 1.

Part 1 – Resource Management Framework (PGPA Act)and the relationship with other legislation, regulation and IGT Policy, Plans and Procedures

8.In the conduct of duties, officials are directed to the below key resource management framework documents.

  • Inspector-General’s Public Governance and Accountability Act Financial Delegation – this document specifies the AA’s financial delegations
  • Department of Finance Resource Management Guidance ‘Accountable Authority Instructions’– this document provides detailed explanation about each AAI together with links to source legislation, regulations, policy, guidelines and other guidance.

AAIs apply to all officials of an entity unless clearly specified otherwise.

9.Any breach of these instructions can be the basis of action under the Public Service Act 1999 (such as termination of employment). Separately, a breach may have consequences directly under other relevant employment arrangements.

10.IGT officials are also required to comply with a range of other legislation and regulation, as well as IGTPPP that are themselves located in separate documents outside the PGPA framework– for example the IGT’s Fraud Control Plan.

9.The IGT has a range of ‘resource management’ PPP that are embodied in both IGT-specific and general IGT documents. The AA has also issued non-PGPA related management instructions on general or specific PPP to staff members in addressing other legal or operational requirements. For example on employment related matters in relation to the Public Service Act 1999. While these do not form part of the AAIs, all officials must comply with them.

10.The IGT has a general policy of adopting Treasury documents for matters where specific IGT documents do not exist. This applies for both IGT resource and non-resource management PPP.

All officials must refer to the IGT General Policy for directions on other IGT policy requirements. AAIs are not the only IGT PPP requirements.

11.As noted throughout the Treasury’s AAIs, a broad range of functions are completed by the Treasury via the IGT/Treasury Memorandum of Understanding-Service Level Arrangement (SLA) and IGT officials are to adhere to TreasuryPPP as required. This includes the detailed operational guidelines linked to the Treasury’s AAIs: seeTreasury AAI Operational Guidelines

IGT adoption of Treasury PPP documents may require interpretation or assimilation to the IGT’s specific micro office circumstance. All officials should refer such matters to the IGT Executive2[3]for appropriate advice – for example, a reference to the Head of Human Resources may be to the IGT Chief Finance Officer(IGT CFO) or that of the Treasury.

Part 2 – Accountable Authority Instructions - Table of Contents

MODEL AAI TOPIC / SUBTOPICS / PAGE
MANAGING RISK AND INTERNAL ACCOUNTABILITY / Managing risk / 6
Fraud risk management and control / 7
Audit / 8
Accounts and records / 8
Insurance / 9
Accountability of officials / 10
APPROVAL AND COMMITMENT OF RELEVANT MONEY / Approving and entering into commitments of relevant money / 11
Guarantees, indemnities, and warranties, on behalf of the Commonwealth / 13
Official hospitality / 14
Official travel / 15
PROCUREMENT / 17
GRANTS / - / 18
COMMONWEALTH CREDIT CARDS AND CABCHARGE CARDS / - / 19
MAKING PAYMENTS OF RELEVANT MONEY / Making payments / 22
Discretionary compensation mechanisms / 23
Taxation obligations / 24
Drawing rights / 25
MANAGING RELEVANT MONEY / Receiving relevant money / 27
Banking / 27
Lossand recovery of relevant money / 28
Cash advances (including petty cash and cash floats) / 28
Investments and borrowings / 28
Special accounts / 29
User charging / 29
ARRANGEMENTS RELATING TO OTHER CRF MONEY / - / 30
MANAGING DEBT / Recovery of debts / 31
Non-recovery (write-off) of debts / 31
Waiver of amounts owing to the Commonwealth / 32
Payment by instalments or deferral of the time for payment / 32
MANAGING RELEVANT PROPERTY / Acquiring relevant property / 33
Disposing of relevant property / 34
Custody, use and management of relevant property / 35
Loss and recovery of relevant property / 36
WORKING WITH OTHER COMMONWEALTH ENTITIES / - / 37
APPENDIX / - / 38

AAI1- MANAGING RISKAND INTERNAL ACCOUNTABILITY

ThisAAIprovidesinstruction toofficialsonactivitiesrelatingto corporategovernance, including:

•managingrisks;

•fraudrisk management andcontrol;

•audit;

•accountsand records;

•insurance; and

•accountabilityof officials.

AAI1.1- MANAGING RISK

AccountabilityandresponsibilityforIGT’sperformancelieswith theAA.This includesaccountabilityfortheIGT’smanagementofrisk. Whileoverallaccountability forrisk management is withtheAA,it is theresponsibility of allofficials to undertake themanagementofrisk.

Instructions–Allofficials

Youmust actively manage risksthatarepartof yourday-to-day workby:

• complyingwiththe IGT’srisk management framework;

• identifying key risksandresponding tothem;and

• reporting key riskstothe responsibleperson.

Overall accountability for risk management is with the AA. Responsibilityfortheimplementation oftheIGT’srisk management framework has been allocated to theIGT CFO,whohasbeen appointed tosponsorand provide guidance toothersonmanagingrisk.

Instructions–IGT CFO

Ensure that awrittenrisk management policy is developed and maintained,which:

•complieswiththe AS/NZS/ISO31000:2009Standard;

•isendorsedby the AA;

•definesthe linkage betweenIGT’s approachto the management of risk and itsstrategicplansandobjectives;

•containsanoutlineofkey accountabilitiesand responsibilities formanaging risk and implementingIGT’s risk management framework; and

•containsa businesscontinuity policy, including framework,guidelinesand plansthat complywithBSISO 22301:2012Standard.

The policyshouldclearlydefine responsibilityfor managing risk,including:

•responsibility forthe implementationof IGT’s risk management framework;

•how responsibility for the management ofriskcontrolsisdetermined, assignedand monitored;

•the role of those IGTfunctionswithspecific responsibilities forsupporting and reviewing the effectivenessof IGT’s riskmanagement framework,e.g.audit and/or risk committees; and

•building riskcapability to both implement IGT’s risk management framework and the application of risk management practices.

1

Youare toensure thatthe risk management framework is integratedwithother business processes.

Youare to determine and describein the policy the attributesof theriskculture that

IGT seeksto develop.

Youare toimplementarrangements toensure the effective communication andreporting ofrisk,bothwithinIGTand withrelevantexternalstakeholders.

Youare toassessandmaintainsufficientcapability andresourcing toboth implement

IGT’srisk management framework andmanage its risks.

Youare toreviewandupdate IGT’srisk management framework,the applicationof itsrisk management practices,anditsrisksonaregularbasis.

Youare toestablishprocesses for riskmanagement reviews, whichmustbe effectively documentedandendorsedat the appropriate levelwithinIGT.

AAI1.2- FRAUDRISKMANAGEMENT ANDCONTROL

TheAAmusttakeallreasonablemeasurestoprevent,detect,anddealwith fraud relatingtoIGT.

TheMinisterforJusticehasissuedguidanceabout thecontrolof fraud,fraud risk assessments,fraud control plansand reportingof fraud.

Instructions–Allofficials

Youmust actinaccordance withtheIGT’s fraudcontrol policies, plans and procedures.

Additional instructions:

IGT CFO toensure that:

•IGThasa currentfraud control plan andpolices thatare consistentwiththeFraudControlGuidanceissued by the Minister forJustice;

•six monthly reports are provided to the IGT Audit & Risk Committee;

•a fraud risk assessment is undertaken at least every two years; and

•the fraud control plan is updated following the above assessment and where there are significant changes to the IGT’s activities, policies or systems.

AAI1.3- AUDIT

TheAAistoensurethat IGThasan audit committee,withthefunctionsand membership complyingwiththePGPA Rule. The AA has delegated responsibility of chairing the committee to an independent committee member.

Instructions–Allofficials

Youmustcooperate with:

•IGT’sinternalaudit function;

•IGT’sAuditand Risk Committee;and

•the CommonwealthAuditor-General represented by officialsof theAustralianNational

Audit Office.

Additional Instructions:

IGT CFO must:

•consider recommendations made by both internal and external auditors in the IGT’s planning and work processes.

•ensure that the Audit & Risk Committee Charter is maintained.

AAI1.4- ACCOUNTS ANDRECORDS

TheAAmustensurethat IGT’saccountsand recordsare keptinamannerthat properly recordand explainIGT’stransactionsand financialposition.Theformof theserecordsmustconformwith requirementsinthePGPA Rule and facilitates the preparation of the annual financial statements and audit reports.

ResponsibilityforIGT’saccountsandrecords hasbeen allocated totheIGT CFO.

Instructions–Allofficials

Youmust maintainappropriate accountsandrecordstomeetthe requirementsof the PGPA Act,PGPARule andFinancialReporting Rule.

Youmustcomply with any lawfulrequestby the Finance Minister,theresponsible Minister and theCommonwealth Auditor-General for accesstoIGT’s accounts andrecords.

Additional Instructions:

IGT CFO toensure that:

•All financialaccountsandrecords are kept as required.

•Charts of accounts are establishedandmaintainedto accuratelyreflect transactionsinthefinancialrecordsformanagement decision-makingpurposes andto ensure compliancewith externalreportingrequirements.

•IGT’s accounting policies and procedures and business processes are maintained.

•Annual financial statements of the IGT are prepared in accordance with reporting requirements and are included in IGT’s annual report to the Minister.

•Budget estimates and annual financial statements are approved.

Officials (including relevant Treasury staff) involved with preparing accounting records and financial statements must ensure that:

•this is done in accordance with reporting requirements;

•all accounts and records are retained and destroyed in accordance with the General Disposal Schedules issued under the Australian Archives Act 1983; and

•that all material published on the IGT website meets minimum government online publishing standards and be approved by either the AA or IGT CFO.

AAI1.5- INSURANCE

TheIGT isrequiredtoarrangeinsuranceof insurableassetsand liabilitiesthrough Comcover,and toarrangeworkerscompensation insurancethrough Comcare. Therisks normally covered include:

  • property loss, destruction or damage;
  • legalliabilityclaims;
  • motorvehicleloss,destruction ordamage;
  • travelrelatedclaims;
  • workers’compensationclaims;and
  • variousother claims.

Instructions–Allofficials

Youmust manage publicresourcesinaway that minimisesthe riskofaninsurance claim. You mustdisclose any insurance risks andreport any potential insuranceclaim or incidentto

the IGT CFO immediately.

Additional instructions:

All officials:

•The timeliness of the above notification is crucial to ensure that the IGT CFO is able to notify the insurer. Delay in notification could potentially hinder a claim.

•Must not admit liability for, or settle any claim or incur any costs in connection with a claim, without the IGT CFO first obtaining written consent of the insurer.[4]

•For relevant procurement, are to consult with the Treasury Central Procurement Team – see AAI 3 Procurement.

IGT CFO to ensure that:

•IGT’s risk profile and insurance is assessed;

•IGT’s insurance requirements and obligations are met, including the payment of premiums.

AAI1.6–ACCOUNTABILITY OFOFFICIALS

Therearefivegeneralduties,which are:

  • a duty of care and diligence;
  • a duty to act in good faith and for proper purpose;
  • a duty not to improperly use your position;
  • a duty not to improperly use information;
  • a dutytodiscloseinterests.

Thesegeneraldutiesprovideauniformset ofexpected behavioursthat coversallofficialsin meeting highstandardsofgovernance,performanceandaccountability.Thesedutiesarein addition toanyotherlegal dutiesthat an officialmay haveundertheiremployment framework or through an employment contract.

Instructions–Allofficials

Youmustconductyourselfina manner thatisconsistentwiththe followingduties:

  • a duty of care and diligence;
  • adutyto actin goodfaith andfor proper purpose;
  • adutynottoimproperlyuseyour position;
  • adutynottoimproperlyuseinformation;
  • adutytodiscloseinterests.

AAI2- APPROVALAND COMMITMENTOF RELEVANT MONEY

ThisAAIprovidesinstruction toIGTofficialsonapprovingand committingrelevant money and enteringinto,varying oradministeringarrangements. It includesinstructionsin relation to:

  • approvingproposed commitmentsof relevantmoney andenteringinto arrangements;
  • guarantees,indemnities, warrantiesand othercontingentliabilities;
  • officialtravel;
  • officialhospitality;and
  • sponsorships.

AAI2.1- APPROVING ANDENTERINGINTOCOMMITMENTS OFRELEVANTMONEY

ApprovingCommitments ofRelevantMoney

Theauthority fortheAAtoapprovea commitment of relevant money comesfrom section 23(3) of the PGPAAct.TheAAhas delegatedthispowertospecific officials.

Section 18of thePGPA Rule(approvingcommitmentsof relevant money) setsout the requirementsthatapplytoall Commonwealth entity officialsapprovingthecommitmentof relevantmoney.

Expenditureforpurposes otherthan theordinaryservicesand functionsofgovernment shouldbeauthorisedbyspecific legislation[forexample,section 32B of the Financial Framework (Supplementary Powers) Act1997].

The AA has through a written instrument[5] delegated authority to approve commitments of relevant money (within specified limits) tospecific Treasury officials, the IGT CFO and to the IGT Operations & Risk Manager.

Instructions–Allofficials

Youmustnotapprove aproposed commitmentofrelevantmoney,unless:

  • you have authorityto enter intothe arrangement (i.e. youhave been providedwith a section 23(3)delegationfrom the AA);
  • you have actedinaccordance with the CommonwealthProcurementRules(CPRs) orCommonwealth Grants Rulesand Guidelines (CGRGs),where relevant; and
  • you have complied with the requirements of section 18 of the PGPA Rule.

Additionally, youshouldnot approve a proposedcommitmentof relevantmoney, unless:

  • you have acted for properpurpose (i.e.,are satisfiedthatthe proposalconstitutes an efficient,effective,economicaland ethicaluse ofresources);
  • youractionisnot inconsistentwiththepoliciesoftheAustralian Government; and
  • funds are availableto meet the proposedcommitment.

Proposedcommitmentsofrelevantmoney mustbe approvedconsistentwithany written requirements specified in these instructions or the terms of the AA’s delegation instrument.

Approvalfor proposedcommitmentsof relevantmoney mustbe properly recorded. If you provideverbalapproval foracommitmentof relevantmoney,youmustrecordin writingthe approvalassoon as practicable aftergiving it(section18 of the PGPARule).

Proposed commitments of public money with expenditure in future years or including a contingent liability, require prior consideration by the AA and the IGT CFO (the approval of contingent liabilities is addressed in AAI 2.2).

Enteringinto,vary oradminister anArrangementCommitting Relevant Money

Theauthority fortheAA toenterinto,varyoradministeran arrangementforthe commitment of relevantmoney comes fromsection23(1) ofthePGPAAct. TheAA has delegatedauthority[6] to enter into, vary or administer an arrangementcommitting relevant money (within specified limits) to specific Treasury officials, the IGT CFO and to the IGT Operations & Risk Manager.

Instructions–Allofficials

Youmustnotenterintoanarrangement for thecommitment of relevant money unless:

  • you have authoritytoenter into the arrangement(i.e. you have beenprovided witha section23(1)delegationfrom the AA); and
  • the arrangement hasbeenapprovedby a delegate able to approve a commitment of relevant money (under section 23(3) of the PGPAAct).

If the arrangement involves procurement, you must act in accordance with the CPRs (see AAI 3 Procurement).

You must not vary an arrangement unless it is within the scope of your delegation or

authorisation.

Additional Instructions:

IGT Operations & Risk Manager and IGT Office Manager:

•Must review annually the list of regular payment documents in the SAP system that IGT has set up through the Treasury (referred to as Standing Purchase Orders - SPO), to ensure that they are still required and allocated sufficient funds for estimated purchasing throughout the requisite period (normally on a financial year basis).

•Ensure this process is signed-off by the IGT CFO as delegate and referred through to the Treasury to effect changes.

IGT Office Manager:

•Ensure that requests to create a new Purchase Initiation Form (essentially from a new supplier or when making a one-off purchase) are signed-off by the IGT CFO.

AAI2.2- GUARANTEES, INDEMNITIES,ANDWARRANTIES,ONBEHALFOFTHE COMMONWEALTH

TheFinanceMinisterhas delegatedtotheAAthe powertoenterintoan indemnity, guaranteeorwarrantyonbehalfof the Commonwealth.Thedelegationissubjecttoterms and conditions. TheAAhassub-delegatedthispowertothe IGT CFO.

Instructions–Allofficials

Youmust notenter intoanarrangement that includes thegiving ofanindemnity,guarantee or warranty,unlessyouhave been delegated the power togrant anindemnity,guarantee or warrantyonbehalf of the Commonwealth.

Instructions – CFO

When entering an arrangement that involves an indemnity, guarantee or warranty, you must comply with the directions in the delegation.

If the arrangement involves a loan guarantee, you must obtain authorisation from the Finance Minister for the loan guarantee under PGPA Act section 60.

You cannot enter into an arrangement that involves an indemnity, guarantee or warranty with another non-corporate Commonwealth entity.

AAI2.3- OFFICIAL HOSPITALITY

Officialhospitalitygenerally involvesthe useofpublic resourcestoprovide hospitalityto personsother than entity officialstofacilitatetheachievementofoneormoreIGTobjectives.TheAAhasdelegated to the IGT CFOat first instance (and to the IGT Operations & Risk Manager where either the IGT CFO or AAare unavailable for sign-off or are prevented by policy considerations such as self-requisition)toapprovean arrangement toprovideofficialhospitality.

Instructions–Allofficials

Youmustnotapprove anarrangement toprovide official hospitality,unlessyou have been delegated the power to approve suchanarrangement.

Any decisiontospend relevantmoney onofficial hospitality mustbepubliclydefensible.

Youmustnotenterintoanarrangement toprovide official hospitalityunlessyouhave been delegated the power to enterintosuch anarrangement.

Youmust actinaccordance withthe CPRs when procuring goodsor services toprovide official hospitality.

AAI2.4- OFFICIALTRAVEL

Official travelisanytravelwhereaCommonwealthentityisresponsibleforanyof the direct orindirectcostsassociated with that travel.TheAAhasempoweredspecific IGT officialstoapprove officialtravelproposals(domestic[7] andinternational).

Instructions–Allofficials

Youmustnotapprove anarrangement forofficialtravelunlessyou have been delegated the power to approve an arrangement of this type.

Official travelshould only be undertakenwherethere isa demonstratedbusiness needand where other communicationtools,suchas teleconferencing andvideo-conferencing,are an ineffective option.

Youmustnotenterintoanarrangement for officialtravelunless:

  • you have authorityto enter intothe arrangement; and
  • the arrangement hasbeen approvedundersection 23(3) ofthe PGPA Act.

Where the Governmenthasestablishedcoordinated procurementsfor a particulartravel activity,IGTmust use the arrangementestablishedfor thatactivity,unlessan exemption hasbeenprovidedorreimbursementistobe providedforairfares, accommodationand/orcarrental ora travelallowance istobe providedforaccommodation arrangements.