RM Glossary and Acronyms

2. Resource Management

3. Glossary and Acronyms

Table of contents Glossary

The Department of Finance has developed this glossary and acronyms as part of the resource management framework. All terms that make reference to legislation must be read in conjunction with relevant legislation and legislative instruments. This glossary consolidates resource management terms from a range of different glossaries that Finance currently produces. The purpose of the combined resource management glossary is to support the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and accompanying guidance material when the PGPA Act commences on 1 July 2014. The purpose is not to describe every term relating to the use and management of public resources. Rather the glossary seeks to explain the common terms and in specialist areas (e.g. financial reporting or procurement) it refers readers to other topic specific glossaries.

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Account (in relation to the payment of accounts) Can mean an invoice, claim or any legitimate request for the payment of moneys made on an entity

Accountable authority Each Commonwealth entity has an accountable authority. In accordance with subsection 12(2) of the PGPA Act, the following table sets out the person(s) or body that is the accountable authority of a Commonwealth entity: Item if the Commonwealth entity is then the accountable authority of the entity is 1 a Department of State the Secretary of the Department 2 a Parliamentary Department the Secretary of the Department 3 a listed entity the person or group of persons prescribed by the Rules as the accountable authority of the entity 4 a body corporate established by the governing body of the entity, unless a law of the Commonwealth otherwise prescribed by the Rules

Accountable authority instructions Section 20A of the PGPA Act enables the accountable authority to give written instructions to officials about:  any matter relating to the finance law;  approving the proposed expenditure of relevant money;  banking;  debiting or crediting an appropriation;  any other matter prescribed by the rules.

Act of grace payment A payment made to an individual or other body in special circumstances and where there is otherwise no legal obligation to make the payment. Act of grace payments must be authorised by the Finance Minister or a delegate under section 65 of the PGPA Act. They may be appropriate where an entity’s conduct or Commonwealth legislation or policy has resulted in an unintended, inequitable, anomalous or otherwise unacceptable outcome. Act of grace payments are used where any obligation to the applicant is moral, rather than legal.

Additional Estimates The Additional Estimates Appropriation Bills seek appropriation authority from Parliament for the additional expenditure of money from the Consolidated Revenue Fund, in order to meet requirements that have arisen since the last Budget. Further annual appropriation Bills can be introduced during the year if required. These Bills are called the Additional Estimates Appropriation Bills (after MYEFO) or Supplementary Additional Estimates Appropriation Bills (at the same time as bills for the next budget). Additional Rules (in procurement) They refer to the requirements in Division 2 of the CPR that apply to procurement where the estimated value of the procurement is at or above the relevant procurement threshold.

Administer Subsection 23(1) of the PGPA Act and section 32B of the Financial Framework (Supplementary Powers) Act 1997 (formerly the FMA Act) refer to the ability of an accountable authority to administer the arrangements that an entity enters into arrangements on behalf of the Commonwealth. In subsection 23(1) of the PGPA Act, administer is referred to: (1) The accountable authority of a non-corporate Commonwealth entity may, on behalf of the Commonwealth: (a) enter into arrangements relating to the affairs of the entity; and (b) vary and administer those arrangements In subsection 32B of the 32B of the Financial Framework (Supplementary Powers) Act 1997, administer is referred to: (a) in relation to an arrangement—includes give effect to; or (b) in relation to a grant—includes make, vary or administer (i.e., give effect to) an arrangement that relates to the grant. The Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 3) 2012 which added section 32B to the former FMA Act states that giving effect to an arrangement or grant agreement includes:  making a payment in accordance with that arrangement or grant agreement; and  making decisions required by the arrangement, such as whether milestones have been met.

Administered items Items administered by the entity on behalf of the government. They are amounts required to meet the total estimated expenses for administered activities that are expected to be incurred.

Administrative Arrangements Order A legislative instrument issued by the Governor-General to formally establish the matters to be dealt with by each Department of State and the legislation to be administered by each minister through the Administrative Arrangements Order (see the PM&C website).

Advance to the Finance Minister A provision in the annual appropriation Acts that enables the Finance Minister to provide additional urgently needed appropriation to entities for expenditure in the current year.

Amount owing to the Commonwealth A sum of money which is owing to the Commonwealth that is ascertainable or certain (i.e. known or able to be determined objectively), including debts due for payment and amounts that are not yet due for payment (for example, an amount owing to an entity from a supplier where an invoice has been issued, but payment is not due until a later date). Annual appropriations Annual Appropriation Acts provide annual funding for government operations and programs and also for investment in assets or to reduce liabilities. Bills proposing appropriations for the forthcoming financial year are introduced into Parliament on budget night and, when passed, fund approximately 20 per cent of all government expenditure for the year.

Approach to market Defined in Appendix C of the CPR as any notice inviting potential suppliers to participate in a procurement including, but not limited to a request for tender, quote, expression of interest, application for inclusion on a multi-use list, information and proposal.

Appropriation A law of the Commonwealth Parliament that provides authority to draw money from the CRF. An appropriation authorises expenditure for a specified purpose. The Commonwealth cannot spend money without an appropriation authorising that expenditure (and, in some cases, legislation other than an appropriation may be required to authorise the relevant expenditure).

Appropriations and Cash Management Module A module of CBMS that is used to assist in the management of appropriations and cash.

Arrangement Includes:  a contract, agreement, deed or understanding for purposes of the power to enter, vary or administer an arrangement in section 23 of the PGPA Act. This includes an arrangement under which relevant money is, or may become, payable in the form of a notional payment between non-corporate Commonwealth entities.  a contract, agreement or deed for the purposes of the supplementary power to enter, vary or administer an arrangement in relation to certain prescribed programs in section 32B of the Financial Framework (Supplementary Powers) Act 1997 (formerly the FMA Act)

AusTender Defined in Appendix C of the CPR as the central web-based facility for the publication of Australian Government procurement information, including business opportunities, annual procurement plans and procurement contracts awarded.

Australian Accounting Standards The accounting standards issued by the Australian Accounting Standards Board, as in force or applicable from time to time

Authorisation A means of devolving authority whereby statutory power is not transferred (i.e. the power remains with the issuing official). Authorised officials only act for and on behalf of the person issuing the authorisation —they do not operate in their own right. In performing the specified task or function, they are required to think and act as though they were the person who gave the authorisation and comply with any conditions attached to the authorisation. The person who gave the authorisation continues to be responsible for the particular task or function as though they actually carried it out and remains accountable for any decisions and actions in exercising the relevant power.

Authority The legal authority (whether express or implied) to exercise a power or function that can be given directly through legislation (e.g. Accountable Authorities’ powers under section 23 PGPA Act and section 32B of the FMA Act or other specific legislation) or through a delegation or authorisation.

Bank Defined under section 8 of the PGPA Act as follows: (a) an authorised deposittaking institution (within the meaning of the Banking Act 1959); or (b) the Reserve Bank of Australia; or (c) a person who carries on the business of banking outside Australia.

Business Activity Statement (BAS) The form used to report and comply with a number of taxation obligations, including GST, PAYG instalments, PAYG withholding and FBT instalments. Entities must lodge a BAS with the ATO for each tax period.

Budget Cabinet The final stage in the budget decision-making process. Decisions from the ERC are reviewed and those that are endorsed by the full cabinet are included in the budget.

Budget Estimates Agency based estimates of revenue and expenditure within the context of the Australian Government Budget.

Budget Process Operational Rules Rules endorsed by Cabinet setting out the major administrative and operational arrangements that underlie the management of the government’s budget process.

Cabinet Submission A document that a minister or ministers present to Cabinet to obtain its agreement to a course of action. It is coordinated by portfolio departments and signed off by the relevant portfolio minister. The format and content must be in accordance with strict guidelines laid out in the Cabinet Handbook, which is issued by the Cabinet Secretariat. Central entities The central entities are the Department of the Prime Minister and Cabinet, the Department of the Treasury, and the Department of Finance.

Central Budget Management System (CBMS) The system used to manage the flow of financial information between Finance and Australian Government entities to facilitate cash and appropriations management, the preparation of budget documentation and financial reporting.

Charges The payments to Commonwealth entities by other government entities, individuals, and non-government organisations for goods and services and/or regulation, provided to them. The Commonwealth Government may direct entities to charge for some or all of their activities in a specific manner and/or apply a specific policy framework, such as cost recovery.

Comcare The workers' compensation insurer for the Commonwealth Government, providing safety, rehabilitation and compensation services to Commonwealth employees (and employees of the ACT Government) under the auspices of the safety, rehabilitation and compensation services to Commonwealth employees.

Comcover The Commonwealth Government’s self-managed insurance fund responsible for protecting Commonwealth entities against insurable losses and promoting better practice risk management to improve policy formulation and the delivery of Government programs and services. All Commonwealth entities within the general government sector are insured through Comcover. Entities nominally purchase cover for all normally insurable risks, with the exception of workers' compensation, which remains the responsibility of Comcare.

Commonwealth company Under subsection 89(1) of the PGPA Act, (1) A Commonwealth company is a Corporations Act company that the Commonwealth controls. However, it does not include a company that is a subsidiary of: (a) a Commonwealth company; or (b) a corporate Commonwealth entity; or (c) the Future Fund Board of Guardians. (2) The Commonwealth controls a company if, and only if, it: (a) controls the composition of the company’s board; or (b) is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of the company; or (c) holds more than one-half of the issued share capital of the company (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital). (3) Without limiting paragraph (2)(a), the Commonwealth is taken to control the composition of a company’s board if the Commonwealth can appoint or remove all, or the majority, of the directors of the company. (4) For the purposes of subsection (3), the Commonwealth is taken to have power to appoint a person as a director of a company if: (a) the person cannot be appointed as a director of the company without the exercise by the Commonwealth of such a power in the person’s favour; or (b) the person’s appointment as a director of the company follows necessarily from the person being: (i) an Entity Head; or (ii) a statutory office holder.

Commonwealth Competitive Neutrality Policy Statement A policy, which applies competition principles to government activities and forms part of the Competition Principles Agreement. It aims to remove a net competitive advantage that government business activities may have over competitors by virtue of their public ownership. The responsibility for competitive neutrality policy, as a matter of competition policy, rests with the Treasurer.

Commonwealth credit card A credit card issued to the Commonwealth to enable the Commonwealth to obtain cash, goods or services on credit. Credit cards and credit vouchers issued to the Commonwealth are different from personal credit cards or vouchers, as they do not provide the holder with a revolving line of credit. Money borrowed by the Commonwealth through the use of a credit card or credit voucher must be paid in full within a specific timeframe.

Commonwealth entity Defined under subsection 10(1) of the PGPA Act as: (a) a Department of State; or (b) a Parliamentary Department; or (c) a listed entity; or (d) a body corporate established by a law of the Commonwealth. Note: Paragraph (d) does not cover bodies corporate, such as Commonwealth companies, that are established under, but not by, a law of the Commonwealth. Subsection 10(2) of the PGPA Act notes that the High Court and the Future Fund Board of Guardians are not Commonwealth entities.

Commonwealth entity premises All premises owned or leased by a Commonwealth entity, or premises otherwise occupied by or in the care, custody or control of the Commonwealth. This includes land and buildings, as well as aircraft, vessels, vehicles, containers or receptacles.

Commonwealth Grants Rules and Guidelines (CGRGs) A legislative instrument issued by the Finance Minister under section 101 of the PGPA Act. The CGRGs establish the policy framework under which entities determine their own specific grants administration processes. All officials performing duties in relation to grants administration must act in accordance with the CGRGs. Commonwealth Procurement Rules (CPRs) A legislative instrument issued by the Finance Minister under section 101 of the PGPA Act. The CPRs establish the rules for Australian Government procurement and articulate the Australian Government’s requirements for officials performing duties in relation to procurement.

Consolidated financial statements The annual, end-of-year financial statements for the Australian Government, prepared under section 48 of the PGPA Act and in accordance with Australian Accounting Standards. They present the consolidated results for the Australian Government as well as disaggregated information on the various sectors of government.

Consolidated Revenue Fund (CRF) The CRF is established by section 81 of the Constitution and consists of all revenues and moneys raised or received by the executive government of the Commonwealth. The CRF is self-executing in nature, which means that all money forms part of the CRF automatically upon receipt by the Commonwealth.

Contingent liability A present commitment that may give rise to a cost as a result of a future event. They often result from indemnities, guarantees, warranties or other commitments of this type which are included in contracts.

Contract management The active management throughout the life of a procurement contract or other contract to ensure a contractor’s performance is satisfactory, stakeholders are well informed and all contract requirements are met. It includes managing the contractual relationships and ensuring that deliverables are provided to the required standard, within the agreed timeframe and achieve value for money.

Coordinated Procurements Procurement where the Australian Government has decided that certain goods and/or services that should be procured at the whole-of-government level. Non- corporate Commonwealth entities must use coordinated procurement arrangements where they exist, unless an exemption has been granted. Corporate Commonwealth entities and Commonwealth companies are exempt unless a Government Policy Order has been issued by the Finance Minister.

Corporate Commonwealth entity Under subsection 11(a) of the PGPA Act a corporate Commonwealth entity is a Commonwealth entity that is a body corporate that is legally separate from the Commonwealth.

Corporations Act company. A body corporate that is incorporated, or taken to be incorporated, under the Corporations Act 2001.

Correctly rendered invoice A valid tax invoice that also includes entity specific information as defined in the contract, agreement or other arrangement (some contracts, agreement and arrangements may also contain their own references to what is a ‘correctly rendered invoice’). Costings An assessment of the financial impact of a proposed policy change. The Commonwealth Government requires that its entities provide costings for any new policy proposal seeking Cabinet endorsement. Finance must agree to these costings before they can be incorporated into a submission for Cabinet.

Cost Recovery Guidelines The overarching policy framework under which Commonwealth entities design, implement and review cost recovered activities. Cost recovery involves charging individuals or non-government organisations some or all of the costs of a specific government activity.

Custody of relevant money Subsection 68(3) of the PGPA Act states that a person has custody of relevant money if the person: (a) holds the money by way of a petty cash advance, change float or other advance; or (b) has received the money, but has not yet dealt with it as required under section 55 of the PGPA Act (which is about banking of relevant money).

Custody of relevant property Subsection 68(4) PGPA Act states that, a person has custody of relevant property if: (a) the person has taken delivery of the property and has not returned it to another person entitled to receive the property on behalf of the Commonwealth; and (b) when the person took delivery of the property the person signed a written acknowledgement that the property was delivered on the express condition that the person would at all times take strict care of the property.

Debt A sum of money owing to the Commonwealth which is known and not being disputed, due for payment now and legally capable of being recovered in an action for debt. For example, a staff member who has been overpaid a salary, or a person who has been overpaid a social security payment, may owe a debt to the Commonwealth as a result of the overpayment.

Defective administration Defective administration (in relation to the CDDA Scheme) is defined as: (a) a specific and unreasonable lapse in complying with existing administrative procedures that would normally have applied to the claimant’s circumstances; or (b) an unreasonable failure to institute appropriate administrative procedures to cover a claimant’s circumstances; or (c) giving advice to (or for) a claimant that was, in all circumstances, incorrect or ambiguous; or (d) an unreasonable failure to give to (or for) a claimant, the proper advice that was within the official’s power and knowledge to give (or was reasonably capable of being obtained by the official to give).

Delegate An individual who has been given statutory authority, by an instrument of delegation, to make particular decisions or perform particular functions. A delegate is constrained by any limitations expressed in the delegation instrument.

Delegation A statutory procedure permitting a person (the delegator) to entrust their statutory authority to another person (the delegate). Delegates personally hold and possess the powers and responsibilities that they have been given and are personally accountable for their decisions and actions in the exercise or performance of the powers and responsibilities that they have been given. A delegation is distinct from an authorisation.

Department Capital Budget Departmental (or Administered) Capital Budget (DCB/ACB) are provided to Non- Corporate Entities (as an equity injection) that receive government funding to meet the costs associated with the replacement of minor assets (assets valued at $10 million or less) or maintenance costs that are eligible to be capitalised. The funding for depreciation, amortisation and makegood expenses was replaced with a DCB in the 201011 Budget.

Department of State: Is defined in section 8 of the PGPA Act to: (a) include any body (except a body corporate), organisation or group of persons that is prescribed by the Rules in relation to a specified Department of State (within the ordinary meaning of the expression); and (b) exclude any part of a Department of State (within the ordinary meaning of the expression) that is a listed entity.

Director The director of a Commonwealth company has the meaning given by the Corporations Act 2001.

Efficiency dividend Currently, all federal public sector entities are subject to an annual efficiency dividend that reduces departmental budgets each year in anticipation of efficiencies being found. The efficiency dividend applies to the operational (running) costs. The objectives of the efficiency dividend have been to:  provide managers with a financial incentive to continually seek new or more efficient ways of carrying out ongoing government business;  allow government to redirect a portion of efficiency gains to higher priority activities; and  clearly demonstrate public service efficiencies resulting from improvements in management and administrative practices and return these gains to the Budget.

Enabling legislation For a Commonwealth entity is the Act or legislative instrument that establishes the entity.

Finance law Defined under section 8 of the PGPA Act to mean: (a) the PGPA Act; or (b) the Rules relating to the PGPA Act (including the PGPA Rules, the CPR, the CGRG and the FMRs); or (c) any instrument made under the PGPA Act (e.g. determinations establishing Special Accounts under section 78, determinations transferring functions between non-corporate Commonwealth entities under section 75, and government policy orders under section 22 or 93); or (d) an Appropriation Act.

Finance Minister’s Rules The Finance Minister may make Rules under section 101 of the PGPA Act to outline the requirements and guidance for the annual financial statements prepared by the accountable authority of an entity. They are produced each year and have the force of law under the PGPA Act.

Fiscal balance An accrual measure that shows whether the government has to borrow from financial markets to cover its activities. Fiscal balance equals revenue less expenses less investment in non-financial assets.

Fiscal policy The use of government spending and taxation to influence the level of economic activity.

Fraud (against the Commonwealth) Defined by the Commonwealth Fraud Control Better Practice Guidance as ‘dishonestly obtaining a benefit, or causing a loss, by deception or other means’ and may include (but is not limited to):  theft;  accounting fraud (false invoices, misappropriation etc);  unlawful use of, or obtaining property, equipment, material or services;  causing a loss, or avoiding and/or creating a liability;  providing false or misleading information to the Commonwealth, or failing to provide it when there is an obligation to do so;  misuse of Commonwealth assets, equipment of facilities;  cartel conduct; making, or using false, forged of falsified documents, and;  wrongfully using Commonwealth information or intellectual property.

General government sector (GGS) Government-controlled entities that provide public services which are mainly non- market in nature, mainly for the collective consumption of the community, involving the transfer of redistribution of income and financed mainly through taxes and other compulsory levies.

Gifting Commonwealth resources given without payment or condition.

Governing body The governing body of a corporate Commonwealth entity means: (a) for a corporate Commonwealth entity that has a board, council or other governing body – that board, council or governing body; and (b) Otherwise – all of the members of the entity.

Government policy order: The PGPA Act enables the Finance Minister to make an order (a government policy order) that specifies a policy of the Australian Government that is to apply:

 to one or more corporate Commonwealth entities in accordance with section 22 of the PGPA Act; or  to one or more wholly-owned Commonwealth companies in accordance with section 93 of the PGPA Act.

Government Finance Statistics (GFS) The GFS system provides statistics that are based on accounting information, which enable policy-makers and other stakeholders to:  assess the impact of policy decisions on the economy;  make international comparisons of performance information; and  analyse the financial operations and financial position of the public sector at either the specific government, institutional sector or transactional level. The GFS system covers all activities of governments that can be measured in financial terms. The system distinguishes between transactions and other economic flows that impact on movements in assets and liabilities held by governments. The statistics also include information about the value of governments’ investments and debt. GFS is not an accounting system – accounts are mapped to a GFS view, providing an alternative view of the accounting data (see the GFS manual).

Grant Grants are defined in the Commonwealth Grants Rules and Guidelines (CGRGs) to mean an arrangement for the provision of financial assistance by the Commonwealth or on behalf of the Commonwealth: (a) under which relevant money or other CRF money is to be paid to a recipient other than the Commonwealth; (b) which is intended to assist the recipient achieve its goals; (c) which is intended to help to 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. It is important to note that this definition is different from the definition for accounting purposes. The CGRGs also exempts certain arrangements from the definition of a grant, and therefore from the CGRGs, including procurements, tax concessions, loans, investments, certain intergovernmental payments and international official development assistance.

Guarantee A legally binding promise whereby one party assumes responsibility for the debt, or performance obligations, of another party should that party default in some way – for example, where an entity guarantees payment of bank borrowings by a third party.

Indemnity A legally binding promise whereby a party undertakes to accept the risk of loss or damage another party may suffer. For example, where an entity hires a venue to host a conference it may indemnify the owner of that venue against losses that may be suffered if attendees damage the venue. An indemnity may give rise to a contingent liability.

Indexation The process by which the forward cost estimates are updated to reflect the forecast economic conditions of the year in which costs are expected to occur.

Intelligence or security entity For the PGPA Act has the same meaning as in section 85ZL of the Crimes Act 1914.

Inter-entity agreement A documented relationship for the provision of services, exchange of information or other administrative function or support, signed between two or more entities. Examples include: an MoU, Exchange of Letters, Business Partnership or a Service Level Agreement.

Intergenerational report A report, published by Treasury, that assesses the long-term sustainability of current government policies over the 40 years following the release of the report, including taking into account the financial implications of demographic change. L

Legal Services Directions 2005 Directions issued by the Attorney-General under the Judiciary Act 1903. These directions set out certain requirements for Commonwealth legal work.

Legislation A law or body of laws formally made or enacted. The term includes statute law or Acts of Parliament, but also encompasses law made by other bodies under the authority of Parliament.

Liability cap A legally binding commitment whereby a contactor’s liability for damage or loss is limited to a certain amount.

Listed entity A listed entity is defined in section 8 of the PGPA Act, to be any of the following that is prescribed by the Rules: (a) any body (except a body corporate), person, group of persons or organisation; (b) any combination of bodies (except bodies corporate), persons, groups of persons or organisations; whether or not that body or combination of bodies is part of a Department of State.

Listed law enforcement entity. A law enforcement entity (within the meaning of section 85ZL of the Crimes Act 1914) that is prescribed by the Rules.

Material entities Government entities are classified based on the extent to which their financial information has a material impact on the whole-of-government financial statements. The breakdown is determined by aggregating the total income, expenses, assets and liabilities of all entities. Entities whose total falls within the top 99 per cent of the total general government sector are classified as ‘material’ entities and the rest are ‘non-material’. Exceptions apply to entities that are considered material in nature, such as Departments of State.

Measure A policy or decision of the government that affects revenues or expenses (on a Government Finance Statistics basis).

Memorandum of Understanding (MoU) Is a written agreement between two or more parties that defines the working relationship, expectations and responsibilities. MoUs are usually not legally binding on the parties. They are commonly used to clarify arrangements between non- corporate Commonwealth entities.

Minister Includes a Presiding Officer of a Parliamentary Department.

Model Accountable Authority Instructions (AAIs) Section 20A of the PGPA Act enables the accountable authority to give written instructions to officials about:  any matter relating to the finance law;  approving the proposed expenditure of relevant money;  banking;  debiting or crediting an appropriation;  any other matter prescribed by the rules. The Model Accountable Authority Instructions provide model instructions on which an accountable authority can base his or her instructions to officials. The Model AAIs have been developed to assist accountable authorities of non-corporate Commonwealth entities and corporate Commonwealth entities to establish instructions on resource management matters. The Model AAIs were developed by Finance in consultation with other Commonwealth entities.

National Partnership Payments Under subsection 16(1) of the Federal Financial Relations Act 2009 (FFR Act): (1) The Minister may determine that an amount specified in the determination is to be paid to a State specified in the determination for the purpose of making a grant of financial assistance to: (a) support the delivery by the State of specified outputs or projects; or (b) facilitate reforms by the State; or (c) reward the State for nationally significant reforms (see FFR Act)

Net debt A common measure of the strength of the government’s financial position. Net debt equals interest-bearing debts less nominated financial assets.

Net worth An economic measure of wealth. Net worth equals assets less liabilities.

New policy proposals (NPPs) Any proposals that require a government decision and that:  have a certain or potential financial impact including on the fiscal balance, underlying cash balance, headline cash balance, net debt or net worth on existing estimates within the forward estimates period or beyond (including drawing down on cash reserves or moving expenditure from outside into the forward estimates); or  have changes in expenses offset by changes in other expenses or user charges (revenue); or  create a legal, financial, contingent or other commitment for the Commonwealth; or  changes the intent of a previous new policy decision or position, including proposals that are fully offset, absorbed within existing resources, or involve movements between or within outcomes.

Noncorporate Commonwealth entity: A non-corporate Commonwealth entity is defined by paragraph 11(b) of the PGPA Act as a Commonwealth entity that is not a body corporate. That is, non-corporate Commonwealth entities:  are part of the Commonwealth;  are not legally and financially separate from the Commonwealth.

Non-operating appropriation Nonoperating appropriations (sometimes called 'capital' costs) are included in the even number appropriation acts (e.g. Appropriation Act (No. 2 or 4)). These appropriations include:  'equity injections', which are provided to entities to, for example, enable investment in assets to facilitate departmental activities;  a ‘Collection Development Acquisition Budget’ (CDAB) for Designated Collecting Institutions (such as the National Gallery of Australia) to purchase Heritage and Cultural assets;  'administered assets and liabilities' appropriations, which provide funding for acquiring new administered assets, enhancing existing administered assets and discharging administered liabilities relating to activities administered by entities on behalf of the government; and  ‘Corporate Commonwealth entities payment' appropriations in Appropriation Bill (No. 2) are made available to the responsible portfolio department for payment to corporate Commonwealth entities to meet their nonoperating costs.

Non-recovery of a debt (write-off) The PGPA Rule permits the accountable authority (or delegate) not to pursue the recovery of a debt where it is considered not economical, a debt is not legally recoverable or the write-off is authorised by an Act. A decision to write off a debt does not legally extinguish the debt. For example, if the debtor’s circumstances change in the future the debt can be reinstated and pursued.

Notional payments and receipts Transactions that do not actually involve money leaving the CRF, because both parties to the transaction are part of the Commonwealth, or acting on behalf of the Commonwealth. For example, where one non-corporate Commonwealth entity pays another for services, or where one part of a non-corporate Commonwealth entity pays another division of that entity. Section 76 PGPA Act treats these notional payments and receipts as real payments and receipts and as such, the appropriation relied on for the transaction should be debited/credited as appropriate. O

Official Subsection 13(2) of the PGPA Act defines an official of a Commonwealth entity as an individual who is in, or forms part of, the entity. Under subsection 13(3), and without limiting subsection (2), an official: (a) includes an individual who: (i) is, or is a member of, the accountable authority of the entity; or (ii) is an officer, employee or member of the entity; or (iii) is an individual, or an individual in a class, prescribed by the Rules; and (b) does not include an individual who: (i) is a Minister; or (ii) is a judge; or (iii) is a consultant or independent contractor of the entity (other than a consultant or independent contractor of a kind prescribed by the Rules for the purposes of subparagraph (a)(iii)); or (iv) is an individual, or an individual in a class, prescribed by the Rules.

Official Public Account (OPA) The Commonwealth’s central bank account is named the Official Public Account. The OPA is one of a group of linked bank accounts, referred to as the Official Public Account Group of Accounts, which are maintained with the Reserve Bank of Australia (RBA). It is a requirement to maintain the Commonwealth’s central bank account with the RBA; this is set out under subsection 53(3) of the PGPA Act.

Other CRF money: According to subsection 105(2) of the PGPA Act, is money that forms part of the CRF other than: (a) relevant money; or (b) any other money of a kind prescribed by the Rules.

Outcomes The results, impacts or consequences of actions by the Australian Government on the Australian community that the government wishes to achieve. For reporting purposes, outcomes equate to major activities in AASB 1052 (section 20).

Parameters Economic or program variables which influence the price or cost of the program. Economic parameters are the forecasts in the budget and forward years of various economic indicators including movements in prices, production levels and exchange rates. Program-specific parameters, estimated by entities in consultation with Finance, refer to changes in non-economic variables such as conditions of specific programs (e.g. the number of unemployment benefit recipients or the number of sole parents).

Parliamentary department A department of the Parliament established under the Parliamentary Service Act 1999 to provide a range of services and support for the working of Parliament. Currently, the parliamentary departments are: the Department of the Senate; the Department of the House of Representatives; the Department of Parliamentary Services; and the Parliamentary Budget Office.

Payment pending probate Relates to an amount which the Commonwealth owes to a person at the time of their death. The PGPA Rule gives the Finance Minister the power to authorise a payment to a person’s estate without requiring production of a will or letters of administration. In authorising the payment the Finance Minister must have regard to the persons who are entitled to the property of the deceased person under the deceased person’s will or under the law relating to the disposition of the property of deceased persons.

Portfolio Refers to an area of responsibility assigned to a minister of the Australian Government under the Administrative Arrangements Order. A portfolio may encompass more than one Department of State, for example, the Defence Portfolio consists of the Department of Defence and the Department of Veterans’ Affairs.

Portfolio Additional Estimates Statements (PAES) The purpose of the PAES, like that of the Portfolio Budget Statements, is to inform senators, members of the House of Representatives and the public of the proposed allocation of resources to entities within a portfolio to assist them to achieve government outcomes. The focus of the PAES is on explaining the changes in resourcing by outcome since the Budget. As such, the PAES provides information on new measures and their impact on the financial and/or non-financial planned performance of programs supporting those outcomes. The PAES facilitate understanding of the proposed appropriations in Appropriation Bills (Nos. 3 & 4).

Portfolio Budget Statements (PB Statements) The PB Statements inform members of parliament and the public of the proposed allocation of resources to government outcomes. They also assist the Senate standing committees with their examination of the government's Budget. The PB Statements are tabled in Parliament on Budget night and published as budget- related papers.

Portfolio budget submissions Cabinet submissions setting out all of the proposals for a portfolio to be considered in the annual budget process, including savings, spending and any other matters. Portfolio Supplementary Additional Estimates Statements (PSAES) The purpose of the PSAES, like that of the Portfolio Budget Statements, is to inform senators, members of the House of Representatives and the public of the proposed allocation of resources to entities within a portfolio to assist them to achieve government outcomes. The focus of the PSAES is on explaining the changes in resourcing by outcome since the Additional Estimates update. The PSAES facilitate understanding of the proposed appropriations in Appropriation Bills (Nos. 5 & 6). These Bills are not produced every year.

Pre-election Economic and Fiscal Outlook (PEFO) The Charter of Budget Honesty Act 1998 requires the secretaries of the Department of Treasury and the Department of Finance to release a pre-election report that provides updated information on the economic and fiscal outlook. The PEFO report must be released within 10 days of the issue of the writ for a general election.

Presiding Officer The President of the Senate or the Speaker of the House of Representatives.

Procurement Defined in Appendix C of the CPR as encompassing the whole process of procuring goods and/or services. It begins when a need has been identified and a decision has been made on the procurement requirement. Procurement continues through the processes of risk assessment, seeking and evaluating alternative solutions, the awarding of a contract, delivery of and payment for the goods and services and, where relevant, ongoing contract management and consideration of disposal of goods. Procurement does not include, for example, grants, statutory appointments or engagement of employees such as under the Public Service Act 1999. For a complete list of what procurement does not include, refer to Appendix C of the Commonwealth Procurement Rules.

Procurement-connected policies The policies of the Commonwealth for which procurement have been identified as the means of delivery.

Procurement method One of the three methods used to conduct a procurement – open tender, prequalified tender or limited tender.

Program In the context of the outcomes and programs framework, Commonwealth programs deliver benefits, services or transfer payments to individuals, industry or business, or the community as a whole and are the primary vehicles for government entities to achieve the intended results of their outcome statements.

Proper According to the PGPA Act, when used in relation to the use or management of public resources, means efficient, effective, economical and ethical.

Proper use When used in relation to use or management of public resources means efficient, effective, economical and ethical use. See section 8 PGPA Act. For the accountable authority of a non-corporate Commonwealth entity proper use and management of public resources also means in a way that is not inconsistent with the policies of the Australian Government. See sections 15 and 21 of the PGPA Act.

Public financial corporations Entities that trade in financial assets and liabilities and operate commercially in the financial markets. They are entities which perform central banking functions, accept demand, time or savings deposits, or have the authority to incur liabilities and acquire financial assets in the market of their own account.

Public non-financial corporations Entities whose primary function is to provide goods and services which are mainly market, non-regulatory and non-financial in nature, financed predominantly through sales to the consumers of goods and services.

Public resources Under section 8 of the PGPA Act, means relevant money, relevant property, or appropriations.

Public sector governance The set of responsibilities and practices, policies and procedures, exercised by an entity’s executive, to provide strategic direction, ensure objectives are achieved, manage risks and use resources responsibly and with accountability.

Purposes When used in relation to a Commonwealth entity or Commonwealth company, it includes the objectives, functions or role of the entity or company (see section 8 of the PGPA Act).

Relevant money Under section 8 of the PGPA Act, means: (a) money standing to the credit of any bank account of the Commonwealth or a corporate Commonwealth entity; or (b) money that is held by the Commonwealth or a corporate Commonwealth entity.

Relevant procurement thresholds Defined in Appendix C of the CPR as the amount (including GST) of a procurement when procurements are subject to the additional Rules in the CPR. These thresholds are: (a) for non-corporate Commonwealth entities other than for procurements of construction services, $80,000; (b) for relevant corporate Commonwealth entities, other than for procurements of construction services, $400,000; or (c) for procurements of construction services by non-corporate Commonwealth entities or relevant corporate Commonwealth entities, $9 million. For the purpose of these AAIs, the relevant thresholds are only those thresholds that apply to non-corporate Commonwealth entities.

Relevant property Defined by the PGPA Act as: (a) property (other than relevant money) that is owned or held by the Commonwealth or a corporate Commonwealth entity; or (b) any other thing prescribed by the Rules.

Reporting period According to the PGPA Act, for a Commonwealth entity, a Commonwealth company, or a subsidiary of a Commonwealth entity or Commonwealth company, is defined as: (a) the period of 12 months commencing on 1 July; or (b) any other period prescribed by the Rules for the entity, company or subsidiary.

Responsible Minister For a Commonwealth entity or Commonwealth company, defined by the PGPA Act as the Minister who is responsible for the entity or company, unless otherwise prescribed by the Rules.

Retained receipts Section 74 of the PGPA Act and the related PGPA Rules authorise a non-corporate entity to increase the balance of certain appropriations by the amount of certain receipts collected. In turn, the increasing of an appropriation authorises the entity to spend those amounts from the CRF, against the relevant appropriation.

Rules According to the PGPA Act, means the Rules in relation to anything in sections 101 to 105. (1) The Finance Minister may, by legislative instrument, make Rules prescribing matters: (a) required or permitted by this Act to be prescribed by the Rules; or (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act. (2) The Rules may: (a) prescribe matters in relation to a particular Commonwealth entity or Commonwealth company, or a class of Commonwealth entities or Commonwealth companies; or (b) make different provision in relation to different Commonwealth entities or Commonwealth companies, or classes of Commonwealth entities or Commonwealth companies. (3) Subsection (2) does not limit subsection 33(3A) of the Acts Interpretation Act 1901. S

Scheme for Compensation for Detriment caused by Defective Administration ( CDDA Scheme) An administrative scheme that allows non-corporate Commonwealth entities to compensate individuals or other bodies who have experienced detriment (i.e. quantifiable financial loss) as a result of an entity’s defective administration, and who have no other avenues of redress.

Section 75 transfers Section 75 of the PGPA Act enables the Finance Minister to issue a determination which transfers an appropriation from one non-corporate Commonwealth entity to another. It is most common following changes to the Administrative Arrangements Order that move functions between non-corporate Commonwealth entities.

Special account A special account is a type of special appropriation. A special account may be established by section 78 or section 80 of the PGPA Act.

Special appropriation Authority within an Act (other than the annual Appropriation Acts) to spend money from the CRF for particular purposes. The Social Security (Administration) Act 1999, for example, contains several special appropriations to make social security payments. Special appropriations account for around 80 per cent of all government expenditure each year.

Specific purpose payments (SPPs) The Commonwealth supports the States' efforts in delivering services in the major service delivery sectors though national SPPs and national partnership payments. The States are required to spend each national SPP and national partnership payment in the relevant sector specified in the agreement.

Spending limit provision Under subsection 59(3) of the PGPA Act, a spending limit provision in a corporate Commonwealth entity’s enabling legislation is a provision in that legislation to the effect that the entity must not enter into a contract involving the expenditure or payment of more than a specified amount of money without the approval of a specified person.

Subsidiary Defined by the PGPA Act to be a subsidiary of a corporate Commonwealth entity or a Commonwealth company means an entity that is controlled by the corporate Commonwealth entity or Commonwealth company. For this purpose, entity and control have the same meanings as in the accounting standard that applies for the purpose of deciding whether a company has to prepare consolidated financial statements under the Corporations Act 2001. U

Underlying cash balance A cash measure that’s shows whether the government has to borrow from financial markets to cover its activities. Underlying cash balance equals operating receipts, less operating payments, less investment in non-financial assets, less Future Fund receipts.

Waiver A special concession granted to an individual or other body that extinguishes a debt or other amount owing to the Commonwealth. Waivers are granted by the Finance Minister (or a delegate) under section 63 of the PGPA Act.

Warranty A legally binding promise whereby one party provides certain assurances to another party. Warranties often relate to asset and sales agreements. For example, where an entity sells an asset to a third party it may provide a warranty that the entity has a right to sell the asset, the asset is fit for use and defective parts will be replaced within a specified period. A warranty may give rise to a contingent liability.

Whole of government (or total public sector) Includes all institutional sectors of government reporting under the Government Finance Statistics; the general government sector; the public non-financial corporations sector and the public financial corporations sector. This is the level at which the annual consolidated financial statements of the Australian Government are reported.

Whollyowned Commonwealth company Under section 90 of the PGPA Act, a wholly-owned Commonwealth company is a Commonwealth company, other than a company any of the shares in which are beneficially owned by a person other than the Commonwealth. Acronyms and abbreviations

AAIs Accountable Authority Instructions

AAO Administrative Arrangements Order

AAS Australian Accounting Standards

AASB Australian Accounting Standards Board

ABS Australian Bureau of Statistics

ACM Appropriations and Cash Management module of CBMS

AEs Additional Estimates

AFM Advance to the Finance Minister

ANAO Australian National Audit Office

APS Australian Public Service

BEAM Budget Estimates and Actuals Management module of CBMS

BPORs Budget Process Operational Rules

CBMS Central Budget Management System

CFO Chief Financial Officer

CFS Consolidated Financial Statements

CGRG Commonwealth Grant Rules and Guidelines

COAG Council of Australian Governments

CPR Commonwealth Procurement Rules CRF Consolidated Revenue Fund

CRIS Cost Recovery Impact Statement

EAU Entity Advice Unit (of Finance)

EM Estimates Memorandum (produced by Finance)

ERC Expenditure Review Committee

FBO Final Budget Outcome

FFR Act Federal Financial Relations Act 2009

Finance Department of Finance

FMIS Financial Management Information System

FMRs Finance Minister’s Rules

GBE Government Business Enterprise

GFS Government Finance Statistics

GGS General Government Sector

GPO Government Policy Order

GST Goods and Services Tax

IMF International Monetary Fund

IRA Implementation Readiness Assessment

JCPAA Joint Committee of Public Accounts and Audit

KPI key performance indicator

MYEFO Mid-Year Economic and Fiscal Outlook NPP new policy proposal

OPA Official Public Account

PAES Portfolio Additional Estimates Statements

PB Statements Portfolio Budget Statements

PB Sub portfolio budget submissions

PEFO Pre-election Economic and Fiscal Outlook

PFC Public Financial Corporation

PGPA Act Public Governance, Performance and Accountability Act 2013

PNFC Public Non-Financial Corporation

PS Act Public Service Act 1999

RPAT Risk Potential Assessment Tool

SMEs Small and Medium Enterprises

SPP specific purpose payment

Treasury Department of the Treasury