Finance Circular
No. 2013/02

Australian Government Grants:Briefing and Reporting

Key points

This circular:

  • provides guidance to Financial Management and Accountability Act 1997
    (FMA Act) agencies on the reporting requirements under the Commonwealth Grant Guidelines (CGGs)
  • is relevant for chief executives and agency staffinvolved in grants administration, including agency staff who advise ministers on grants
  • reflects changes to the CGGsthat take effect on1 June 2013
  • replaces Finance Circular 2009/04 Grants - Reporting Requirements
  • is available on the Finance website at

Contents

Foreword

Key Concepts

Part 1Requirements for agency staff

1.1Reporting and documentation requirements for agency staff

1.1.1Documenting decisions relating to grants

1.1.2Grant guidelines

1.1.3Web-based reporting on grants

1.1.4Reporting of special confidentiality clauses on agency websites

1.1.5Web-based reporting exemptions

1.2Briefing requirements

1.3Other reporting requirements

Part 2Requirements for ministers

2.1Reporting requirements for ministers

2.1.1Electorate reporting

2.1.2Electorate reporting exceptions

2.1.3Approval of grants that agency staff has recommended be rejected

Part 3Requirements for grant recipients

3.1Reporting requirements for grant recipients

3.1.1Performance measurement

3.1.2Proportionality

3.1.3Report once, use often

Part 4Frequently asked questions

Attachment AGrant guidelines – Better practice checklist

Attachment BTemplate – Publishing grant information on agency websites

Attachment CChecklist for agency staff briefing ministers on proposed grants

Attachment DTemplate – Grants awarded in minister’s own electorate

Attachment ETemplate – Annual ministerial report where a minister has approved a grant that the relevant department or agency staff recommended be rejected

Finance Circular 2013/02

Page 1 of 23Department of Finance and Deregulation

Foreword

The objective of grants administration is to promote the proper use of Commonwealth resources through collaboration with the non-government sector to achieve government policy outcomes.

Grants administration encompasses all processes involved in granting activities, and includes:

  • planning and design
  • selection and decision-making
  • the making of a grant
  • the management of grant agreements
  • the ongoing relationship with grants recipients
  • reporting
  • review and evaluation.

Accountability arrangements in grants administration relate to both the process of grants administration, including grants allocation processes and ongoing grants management, as well as the achievement of government objectives. Ministers, chief executives, agency staff and grant recipients all have their respective roles to play in achieving specific government objectives and should be held accountable for the ways in which they fulfill their roles.

This circular provides guidance for chief executives and agency staffonreporting and briefing requirements that apply to grants administration. It includes frequently asked questions and more detailed technical informationinthe attached templates.

This circular reflects changes to the CGGs, which take effect on 1 June 2013,including:

  • amendments to the definition of a ‘grant’
  • extending the timeframe for agencies to publish information on their websites from seven to 14 days
  • removing the requirement for ministers to report own-electorate grants where the grants are awarded onthe basis of a formula
  • new briefing requirements for agency staff
  • the introduction of a requirement for agency staff to report when special confidentiality provisions are contained in grant agreements
  • a greater emphasis on agency staff applyingthe ‘report once, use often’ and proportionality principles when designing reporting requirements for grant recipients.

The CGGs can be found on the Finance website at

Questions about this Finance Circular and the application of the CGGs should be directed to the Grants Policy Team or visit our website.

Kerry Markoulli

Assistant Secretary

Resource Management Branch

Governance and Resource Management Group

May2013

Finance Circular 2013/02

Page 1 of 23Department of Finance and Deregulation

Key Concepts

Key concepts

agency meansa department of state (including persons allocated to the department by the Financial Management and Accountability Regulations 1997 (FMA Regulations)), a parliamentary department, or any agency prescribed under the FMA Regulations (see section 5 of theFMAAct).

agency staffmeans officials of the agency. This includes persons who are not employed by the agency, but perform a ‘financial task’ for the agency. A ‘financial task’ is defined in FMARegulation 3 as ‘a task or procedure relating to the commitment, spending, management or control of public money’.

allocated official means a person outside the Commonwealth who performs a ‘financial task’ in relation to grants administration and temporarily becomes an official of the agency while they are undertaking that task. As an allocated official, they are subject to all the requirements of the financial management framework that apply to all officials, including: FMA legislation; the CGGs; the policies of the Commonwealth; and the relevant agency’s ChiefExecutive’s Instructions(CEIs).

approver means a minister or agency chief executive (including a chief executive’s delegate). An approver is authorised to consider and approve spending proposals under FMA Regulation 9. Aperson may also be authorised to approve proposals to spend public money under legislation other than the FMA Act (see FMA Regulation 3).

arrangement means an arrangement, including a contract or agreement, under which public money is payable or may become payable, other than:

(a)an arrangement for:

(i)the engagement of an employee; or

(ii)the appointment of a person to a statutory office; or

(iii)the acquisition of particular property or services under a general arrangement with the supplier of that property or those services, for the purposes of providing a statutory or employment entitlement; or

(b)an international agreement governed by international law (see FMA Regulation 3).

An arrangement includes an arrangement under which public money is, or may become, payable in the form of a notional payment.

assessment criteria are the specified principles or standards against which applications will be judged. These criteria are also used to assess the merits of proposals and, in the case of a competitive granting activity, to determine applicant rankings.

Commonwealth Grant Guidelines (CGGs) are issued by the Minister for Finance and Deregulation (Finance Minister) under section 64 of the FMA Act and Regulation 7A of the FMARegulations. The CGGs establish the overarching Commonwealth grants policy framework within which agencies develop their own specific grants administration practices. They also articulate the expectations for all FMA Act agencies. The CGGs aresplit into two parts.
Part 1 contains the mandatory requirements. Part 2 contains information on the seven principles of grants administration.

eligibility criteria refer to the mandatory criteria which must be met for a grant application to qualify for a grant. Eligibility criteria may apply in addition to assessment criteria.

financial acquittalrefers to areport of financialtransactions relating to a grant. The report may require recipients to provide item by itemexpenditureinformation. It is generally certified,and may sometimes be independently certified.

grantis defined by FMA Regulation 3A(1) as an arrangement for the provision of financial assistance by the Commonwealth:

(a)under which public money is to be paid to a recipient other than the Commonwealth; and

(b)which is intended to assist the recipient achieve its goals; and

(c)which is intended to help address one or more of the Australian Government’s policy objectives; and

(d)under which the recipient may be required to act in accordance with specified terms or conditions.

The CGGs apply to all arrangements defined in FMA Regulation 3A(1). FMA Regulation 3A(2) exempts certain arrangements from the definition of a grant (see paragraph 2.9 of the CGGs for a list of these arrangements), and therefore from the requirements of the CGGs. See FinanceCircular2013/01 Grants, Procurements and other Financial Arrangements for further guidance.

granting activity(ies) refers to the process of providing public money to potential grant recipients, whether through a grant program or other grant giving exercises. Granting activities can take a variety of forms, including payments made: as a result of competitive or
non-competitive selection processes; where particular criteria are satisfied; or on a one-off or adhoc basis.

grant agreement sets out the relationship between the parties to the agreement, and specifies the details of the grant.

grant guidelinesmay consist of a suite of documents that relate to one or more granting activities, such as overarching guidelines, specific application or expression of interest documentation and/or documentation covering the ongoing operation of the grant, such as a grant agreement.

grant project/task/services refers to a combination of activities undertaken by grant recipients funded by the grant money.

Minister means a minister of state, including a parliamentary secretary.

one-off or ad hoc grant refers to a grant that generally does not involve a planned selection process,but is designed to meet a specific need, often due to urgency or other circumstances. These grants are generally not available to a range of applicants or on an ongoing basis.

proper use means efficient, effective, economical and ethical use that is not inconsistent with the policies of the Commonwealth (see section 44(3) of the FMAAct).

proportionalityinvolves striking a balance between the complexity of a granting activity and managing the risks for beneficiaries and the Australian Government.

public money means

(a)money in the custody or under control of the Commonwealth; or

(b)money in the custody or under control of any person acting for or on behalf of the Commonwealth in respect of the custody or control of the money;

including such money that is held on trust for, or otherwise for the benefit of, a person other than the Commonwealth (see section 5 of the FMAAct).

selection criteria comprise eligibility criteria and assessment criteria.

selection process is the method used to select potential grant recipients. This process may involve comparative assessment of applications or the assessment of applications against the eligibility criteria and/or the assessment criteria.

Finance Circular 2013/02

Page 1 of 23Department of Finance and Deregulation

Part 1 – Requirements for agency staff

Part 1Requirements for agency staff

1.1Reporting and documentation requirements for agency staff

  1. Effective disclosure and reporting in grants administration areessential to ensure transparency and public accountability. Reliable and timely information on grants opportunities and awarded grants helps to provide both the public and the Parliament with confidence in the quality and integrity of grants administration.
  2. Accountability in grants administration depends on the development, maintenance, awareness and public availability of appropriate grants documentation, processes and information. Reporting and record keeping by agency staff is therefore a key component of good grants administration. Agency staff involved in grants administration should ensure that all grant documentation is clear, concise, well-designed and consistent with the CGGs.
  3. Agency staff who make recommendations to ministers on grants administration, must ensure that they provide the minister with sufficient information to make an informed and transparent decision,particularly in relation to awarding specific grants and approving the expenditure of public money.

1.1.1Documenting decisions relating to grants

  1. Agency staff must establish and document whether a proposed activity is a grant prior to applying the CGGs (see FinanceCircular2013/01 Grants, Procurements and otherFinancial Arrangementsfor further information).
  2. Agency staff should use competitive, merit-based selection processes to allocate grants, unless specifically agreed otherwise by a minister, chief executive or delegate. If an alternative process is used, agency staff should document why this approach was taken and who made the decision.

1.1.2Grant guidelines

  1. Agency staff must develop grant guidelines for all new granting activities, and revise guidelines where significant changes have been made to a current granting activity.Agency staff must ensure that grant guidelines, and any related operational guidance,are consistent with the CGGs.
  2. Where grant guidelines have been in place for a considerable time, agency staff should review the content and structure of the guidelines to ensure they are in accordance with the relevant legislative provisionsand the CGGs.
  3. Agency staff should identify opportunities to appropriately accommodate one-off or ad hoc grant giving activities within the structure of a grant program. This will also assist with the requirement to have legal authority for these payments.
  4. Finance should be consulted about the need for grant guidelines for a significant one-off or ad hoc grant, or when agency staff are considering approving a number of one-off or ad hoc grants for similar purposes, whether in the same round or over a period of time.
  5. Agency staff should ensure that the rules of granting activities are simply expressed, clear in their intent and effectively communicated to stakeholders. Agency staff should consider testing the clarity of grant guidelines with stakeholders prior to their release.
  6. At a minimum, grant guidelines should provide potential grant applicants access to adequate information to submit a grant application. The guidelines should also include a statement of the granting activity objectives; an outline of the selection and assessmentprocesses, including who will be responsible for making the final recommendations and approval decisions; any reporting and acquittal requirements; and a description of appeal and review mechanisms.The checklist at Attachment A[1]contains further information on what should be included in grant guidelines.
  7. Grant guidelines must be publicly available on agency websites, except where:
  8. there is a specific policy reason not to publicise the grant guidelines
  9. grants are provided on a one-off or adhoc basis.
  10. Before grant guidelines are published, agencies must ensure they have complied with the Australian Government’s process for approval of new or revised program guidelines.[2]

1.1.3Web-based reporting on grants

  1. Agenciesmust publish information on individual grants on their website no later than 14working days after the grant agreement takes effect (date of effect). Finance recommends agencies use theweb-based reporting template at AttachmentB.
  2. The date of effect may mean different things for different types of grants and agency staff should document why they have chosen a specific date of effect. Agency staff may decide thatthe date of effect is the date that the grant agreement is entered intoor the date of the first payment, depending on the granting activities. However, there may also be instances where the date of effect isanother specified date. For example, the date of effect may be set to coincide with the announcement of successful grant recipients or there may be a planned delayed start forgrant projects to coincide with the commencement of the financial year.
  3. Agencies should adopt a consistent approach for grants awarded in the same program
  4. Where the nature of the grant means that a grant agreement is not required, then the 14working days would apply from the relevant date of effect, for example, the date of the first invoice or payment.
  5. Grants information must be retained on agency websites for two financial years. Where it is not practicable to do so, agencies must retain appropriate records and ensure that they are readily available when requested. Agencies should generally keep information on grant programs and successful recipients electronically in a searchable, easily obtainable and useable format.

1.1.4Reporting of special confidentiality provisions on agency websites

  1. There are generally two broad types of confidentiality related clauses used in grant agreements:
  2. general clausesreferencing confidentiality requirements in legislation, such as under the Privacy Act 1988
  3. special confidentiality provisions, which protect the confidentiality of: all or part of the grant agreement; or information obtained or generated in relation to the grant project.
  4. The CGGs require agencies to report on specialconfidentiality provisions contained in grant agreements. References to requirements in other legislation do not need to be reported. There is no threshold for reporting on special confidentiality provisions in grant agreements. An example of how to report on a special confidentiality provision is included in the web-based reporting template at Attachment B.
  5. Reporting of special confidentiality provisionsshould allow agencies to align the reporting requirements of Procedural Orders of Continuing Effect: 11 Departmental and agency contractswith the web-based reporting requirements for grants.
  6. When agencies publish information on individual grants, as part of web based reporting, they must include information identifying whether a grant agreement containsany specialconfidentiality provisionsand,if so, providethereasons why they are included.
  7. For additional information on reporting of confidentiality provisions, agency staff can draw from information provided for procurement contractsat:

1.1.5Web-based reporting exemptions

  1. Where agency staff determine that publishing grants information on agency websites may jeopardise government policy outcomes, then the responsible minister can write to the Finance Minister seeking an exemption to the web-based reporting requirements. The letter should detailthe rationale and include information about whether the exemption is to apply for a one-off grant, for the whole of the grant program or granting activity or a particular grant round, or on an ongoing basis for a particular group of grants. An example of a rationaleis where Privacy Act 1988 considerations are prevalent. Agency staff should consult the Grants Policy Team () prior to commencing this process.

1.2Briefing requirements

  1. Ministers must not approve a grant or grants without first receiving written advice from agency staff on the merits of the grant or grants.
  2. Where the minister is the grant approver, agency staff must provide written advice and the minimumbriefing requirementsapply. Agency staff can include additional information in the brief. At a minimum, the brief must include:
  3. information that the spending proposal is a grant
  4. applicable requirements of the FMA Act,FMA Regulations and the CGGs
  5. the legal authority for the grant
  6. information on the grant application and selection processes used
  7. the merits of proposed grants relative to the grant guidelines and value with public money considerations.
  8. When briefing ministers on the merits of a grant or group of grants relative to the grant guidelines and achieving value with public money, agency staff should indicate: which grant applications fully meet the selection criteria; which applications partially meet the criteria; and which applications do not meet any of the criteria. Any specific recommendations regarding grant applications for approval can be in addition to this information.
  9. In addition to the requirements in the CGGs, there are further requirements in the FMAAct and FMA Regulations that apply to ministers, chief executives and agency staff. For example, FMA Regulation 9 provides that an approver must not approve a spending proposal unless the approver is satisfied, after reasonable inquiries, that giving effect to the spending proposal would be a ‘proper use’ of Commonwealth resources.
  10. Agency staff should refer to Attachment C, which outlines the minimum briefing requirements and provides a checklist for agency staff to use when preparing advice where ministers are approving grants.
  11. Where the approver of the grant or grants is a chief executive or delegate, agency staff advising such approvers should still have regard to the minimum briefing requirements, particularly in relation to advising on the merits of the proposed grant relative to the grant guidelines and the key consideration of achieving value with public money.

1.3Otherreporting requirements