Finance CircularNo. 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 staff involved in grants administration, including agency staff who advise ministers on grants

reflects changes to the CGGs that take effect on 1 June 2013 replaces Finance Circular 2009/04 Grants - Reporting Requirements is available on the Finance website at http://www.finance.gov.au/publications/finance-

circulars/index.html

Contents

Foreword........................................................................................................................................................... 3

Key Concepts.................................................................................................................................................... 4

Part 1 Requirements for agency staff..................................................................................................6

1.1 Reporting and documentation requirements for agency staff.....................................................6

1.1.1 Documenting decisions relating to grants............................................................................................6

1.1.2 Grant guidelines................................................................................................................................................6

1.1.3 Web-based reporting on grants.................................................................................................................7

1.1.4 Reporting of special confidentiality clauses on agency websites...............................................7

1.1.5 Web-based reporting exemptions............................................................................................................8

1.2 Briefing requirements....................................................................................................................................8

1.3 Other reporting requirements....................................................................................................................9

Part 2 Requirements for ministers................................................................................................... 10

2.1 Reporting requirements for ministers.................................................................................................10

2.1.1 Electorate reporting.....................................................................................................................................10

2.1.2 Electorate reporting exceptions..............................................................................................................10

2.1.3 Approval of grants that agency staff has recommended be rejected......................................11

Part 3 Requirements for grant recipients.......................................................................................12

3.1 Reporting requirements for grant recipients....................................................................................12

3.1.1 Performance measurement......................................................................................................................12

3.1.2 Proportionality...............................................................................................................................................12

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3.1.3 Report once, use often.................................................................................................................................13

Part 4 Frequently asked questions....................................................................................................14

Attachment A Grant guidelines – Better practice checklist....................................................................17

Attachment B Template – Publishing grant information on agency websites...............................19

Attachment C Checklist for agency staff briefing ministers on proposed grants.........................20

Attachment D Template – Grants awarded in minister’s own electorate........................................22

Attachment E Template – Annual ministerial report where a minister has approved a grant that the relevant department or agency staff recommended be rejected..........23

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Foreword

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 staff on reporting and briefing requirements that apply to grants administration. It includes frequently asked questions and more detailed technical information in the 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 on the 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 applying the ‘report once, use often’ and proportionality principles when designing reporting requirements for grant recipients.

The CGGs can be found on the Finance website at http://www.finance.gov.au/financial-framework/financial-management-policy-guidance/grants.html.

Questions about this Finance Circular and the application of the CGGs should be directed to the Grants Policy Team at grants@finance.gov.au or visit our website.

Kerry MarkoulliAssistant SecretaryResource Management BranchGovernance and Resource Management GroupMay 2013

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Key Concepts

Key conceptsagency means a 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 the FMA Act).

agency staff means 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 FMA Regulation 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 Chief Executive’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. A person 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 FMA Regulations. 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 are split 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 acquittal refers to a report of financial transactions relating to a grant. The report may require recipients to provide item by item expenditure information. It is generally certified, and may sometimes be independently certified.

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Key Concepts

grant is 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 Finance   Circular   2013/01 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 ad hoc basis.

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

grant guidelines may 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 FMA Act). proportionality involves 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 FMA Act).

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.

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Part 1 – Requirements for agency staff

Part 1 Requirements for agency staff1.1 Reporting and documentation requirements for

agency staff 1. Effective disclosure and reporting in grants administration are essential 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.

1.1.1 Documenting decisions relating to grants

4. Agency staff must establish and document whether a proposed activity is a grant prior to applying the CGGs (see Finance   Circular   2013/01 Grants, Procurements and other Financial Arrangements for further information).

5. 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.

1.1.2 Grant guidelines

6. 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.

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 provisions and the CGGs.

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.

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.

7. 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.

8. 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 assessment

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Part 1 – Requirements for agency staff

processes, 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 A1 contains further information on what should be included in grant guidelines.

9. Grant guidelines must be publicly available on agency websites, except where:

there is a specific policy reason not to publicise the grant guidelines

grants are provided on a one-off or ad hoc 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

1.1.3 Web-based reporting on grants

11. Agencies must publish information on individual grants on their website no later than 14 working days after the grant agreement takes effect (date of effect). Finance recommends agencies use the web-based reporting template at Attachment   B .

12. 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 that the date of effect is the date that the grant agreement is entered into or the date of the first payment, depending on the granting activities. However, there may also be instances where the date of effect is another 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 for grant projects to coincide with the commencement of the financial year.

Agencies should adopt a consistent approach for grants awarded in the same program

Where the nature of the grant means that a grant agreement is not required, then the 14 working days would apply from the relevant date of effect, for example, the date of the first invoice or payment.

13. 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.

1.1.4 Reporting of special confidentiality provisions on agency websites

14. There are generally two broad types of confidentiality related clauses used in grant agreements:

general clauses referencing confidentiality requirements in legislation, such as under the Privacy Act 1988

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.

15. The CGGs require agencies to report on special confidentiality 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

1 See http://www.finance.gov.au/financial-framework/financial-management-policy-guidance/grants.html for the latest version of the checklist.2 See Estimates Memorandum 2011/19 – Process relating to the approval of new or revised program guidelines.

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Part 1 – Requirements for agency staff

grant agreements. An example of how to report on a special confidentiality provision is included in the web-based reporting template at Attachment B.

16. Reporting of special confidentiality provisions should allow agencies to align the reporting requirements of Procedural Orders of Continuing Effect: 11 Departmental and agency contracts with the web-based reporting requirements for grants.

17. When agencies publish information on individual grants, as part of web based reporting, they must include information identifying whether a grant agreement contains any special confidentiality provisions and, if so, provide the reasons why they are included.

18. For additional information on reporting of confidentiality provisions, agency staff can draw from information provided for procurement contracts at: http://www.finance.gov.au/procurement/procurement-policy-and-guidance/buying/reporting-requirements/reporting-confidentiality/practice.html.

1.1.5 Web-based reporting exemptions

19. 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 detail the 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 rationale is where Privacy Act 1988 considerations are prevalent. Agency staff should consult the Grants Policy Team (grants@finance.gov.au) prior to commencing this process.

1.2 Briefing requirements20. Ministers must not approve a grant or grants without first receiving written advice from

agency staff on the merits of the grant or grants.

21. Where the minister is the grant approver, agency staff must provide written advice and the minimum briefing requirements apply. Agency staff can include additional information in the brief. At a minimum, the brief must include:

information that the spending proposal is a grant

applicable requirements of the FMA Act, FMA Regulations and the CGGs

the legal authority for the grant

information on the grant application and selection processes used

the merits of proposed grants relative to the grant guidelines and value with public money considerations.

22. 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.

23. In addition to the requirements in the CGGs, there are further requirements in the FMA Act 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.

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Part 1 – Requirements for agency staff

24. 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.

25. 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.

1.3 Other reporting requirements26. In addition to the reporting requirements contained in the CGGs, there are other

Australian Government reporting requirements relating to grants, for example, the Senate requires regular reporting of grant information in relation to:

Procedural Orders of Continuing Effect 11: Departmental and agency contracts

Procedural Orders of Continuing Effect 14: Departmental and agency grants .

27. Further information on the Orders is available at: http://www.aph.gov.au/About_Parliament/Senate/Powers_practice_n_procedures/standingorders/d05.

28. The Joint Committee of Public Accounts and Audit (JCPAA) sets the requirement for agencies to include grants information in their annual reports. Information on the requirement is available from the Department of the Prime Minister and Cabinet’ website at http:www.dpmc.gov.au/guidelines/.

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Part 2 – Requirements for ministers

Part 2 Requirements for ministers2.1 Reporting requirements for ministers29. The CGGs apply to grants administration performed by: ministers; chief executives;

agency staff; and other bodies or third parties who are responsible for grants administration on behalf of an agency. Granting activities should be underpinned by solid governance structures and clear accountability for all parties involved in grants administration, including ministers.

30. The reporting requirements in the CGGs that apply to ministers were determined by the Cabinet and are co-located in the CGGs for the purposes of clarity and transparency.

2.1.1 Electorate reporting

31. Ministers can approve grants in their own electorate. If a minister (excluding a senator) approves a grant within his or her own electorate, he or she must write to the Finance Minister advising of the details as soon as practicable, unless an exemption applies (see paragraphs 36 to 39 of this circular). A template letter is at Attachment   D .

32. Agency staff should advise their minister on whether a grant will provide for activities in the minister’s own electorate. This should be identified in the brief to the minister when advising on grants approval options, in line with the minimum briefing requirements.

33. Circumstances where ministers must report on own electorate grants include where:

the grant recipient’s address is in the minister’s own electorate the address of the recipient is outside the minister’s own electorate, but the grant

project (wholly or partly) will occur or be delivered in the minister’s electorate.

- In the case where part of the grant is being delivered in the minister’s own electorate, agency staff should report the amount to be delivered, if it is known, otherwise report the whole amount.

2.1.2 Electorate reporting exceptions

34. Senators who are ministers are not required to report to the Finance Minister where they approve a grant in their own state or territory.

35. Ministers do not need to report to the Finance Minister if the grant was approved by someone else, for example:

another minister in the portfolio the agency chief executive or agency staff, including a member of an expert panel.

36. Ministers do not need to report to the Finance Minister grants they awarded in their own electorate that are allocated on the basis of a formula Australia-wide, state-wide, or regionally. For example, grants awarded in the minister’s own electorate do not need to be reported in an Australia-wide program where grants are awarded solely on population numbers.

37. Even if a grant is reported to the Finance Minister, or is exempt from electorate reporting, all grants must be reported on agency websites (see paragraphs 11 to 19 of this circular).

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Part 2 – Requirements for ministers

2.1.3 Approval of grants that agency staff has recommended be rejected

38. Ministers may approve grants that are not recommended by agency staff or that agency staff has recommended be rejected.

39. Recommendations or advice by agency staff must meet the minimum briefing requirements (see paragraphs 21 to 25 in this circular).

40. Where a minister, including a senator, approves a grant that the relevant agency staff has recommended be rejected, he or she must report each instance annually to the Finance Minister. Ministers must report by 31 March each year, for the preceding calendar year, and the report must contain the details of the grant and the reason for the approval of the grant.

41. There are two circumstances of grant approvals that should be reported:

where agency staff have made recommendations that a grant not be approved, and the minister chooses to award the grant

where no recommendations have been made, however, a minister chooses to approve a grant where the application did not meet the eligibility and assessment criteria.

42. If a minister (excluding a senator) approves a grant, as described above, in his or her own electorate, he or she must also report that grant to the Finance Minister (see paragraphs 34 to 37 in this circular).

43. The information that should be included in the annual report to the Finance Minister is outlined at Attachment   E .

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Part 3 – Requirements for grant recipients

Part 3 Requirements for grant recipients3.1 Reporting requirements for grant recipients44. Granting activities affect not only the Australian Government and grant recipients, but

also the beneficiaries of a grant. Granting activities should be designed and implemented so that grant recipients focus on outcomes and outputs for beneficiaries, while seeking the most efficient and effective use of inputs.

45. Grants administration processes should be proportional to the scale and risk profile of the granting activity. Agency staff should ensure that grant processes appropriately reflect the capabilities of grant recipients and accommodate the Australian Government’s need for robust and accountable processes, consistent with the risks involved.

46. The CGGs do not mandate any reporting requirements for grant recipients. That said, access to appropriate performance and other information from grant recipients is vital. It can help evaluate whether a granting activity has achieved the desired outcome, and whether a particular grant has achieved value with public money.

3.1.1 Performance measurement

47. Performance reporting requirements and other information sought from grant recipients are key inputs used by agency staff in evaluating whether outcomes have been achieved and whether a particular grant has achieved value with public money. Evaluation activities and performance measures should be specified in grant guidelines and agreements.

48. Agency staff should establish an appropriate performance framework, which can help identify the key types of information from which to evaluate granting activities. Performance measures should be a combination of performance indicators, activity measures and evaluation. They should demonstrate: how much was done; how well it was done; and whether the intended outcome was achieved.

49. Any grants performance framework should be developed in consultation with key stakeholders. Agency staff should work in partnership with grant recipients and other stakeholders to ensure the performance measures are realistic, achievable and will track progress against the outcomes for individual grants and overall granting activity.

3.1.2 Proportionality

50. Agency staff should use the proportionality principle to inform the choice of the application and selection process, the grant agreement to be used and the reporting and acquittal requirements. In particular, agency staff should apply the proportionality principle when determining the reporting and acquittal requirements for grants. Agency staff should determine the volume, detail and frequency of reporting requirements, proportional to the risks involved and policy outcomes being sought.

Subject to transparency considerations and risk assessment, where a grant is used to support the ongoing delivery of services from the same organisations over a period of years, agency staff should consider streamlining reporting requirements and evaluation measures, where the recipient has an established record of compliance and performance. For example, by allowing for the aggregation of reports and less frequent milestone reporting.

51. While each agency will have its own risk framework and approach, the CGGs use three broad categories: granting activity or grant program; the grantee or recipient; and the projects, tasks or services. For low-risk granting activities, more streamlined reporting

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Part 3 – Requirements for grant recipients

requirements and evaluation measures should be developed and the low-risk grant agreement template should be used. A further consideration is the agency’s reporting requirements. That said, inappropriately or inflexibly applied agency standards and accountability frameworks could impact on grant recipients.

3.1.3 Report once, use often

52. Agency staff should apply the ‘report once, use often’ principle, when designing grants application and reporting requirements. Agency staff should not seek information from grant applicants and recipients that has already been provided to an Australian Government entity and is available to agency staff. Agency staff must not request information provided to the Australian Charities and Not-for-profits Commission (ACNC) by an organisation regulated by them.

Agency staff should discuss with the ACNC and other regulators the availability of relevant information that could be used for application, reporting and acquittal purposes. If an entity is registered with the ACNC, then a financial acquittal should not be required, unless the granting activity is higher risk.

53. The risk rating for a granting activity should be determined through considering risks to the granting activity or grant program; the grantee or recipient; and the project/task/services.

54. If the granting activity risk is assessed by agency staff as low, and the entity is regulated by the ACNC, then a financial acquittal of the grant should not be sought. However, agency staff may seek a declaration or certification from the recipient that the funds were spent on the purposes specified in the grant agreement, as well as requiring them to identify any underspends.

55. Whilst a financial acquittal may not be sought by agency staff, this does not prevent or restrict the need for recipients to maintain financial and other records that would enable a review of financial information, if circumstances required it. This is in line with the requirement of the CGGs that a grant recipient’s own policies and procedures should support the grant agreement and ensure effective and efficient governance and accountability for the grant money they receive.

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Part 4 – Frequently asked questions

Part 4 Frequently asked questionsQ.1. My minister awarded (approved) a grant in his own electorate last year, which

was not reported to the Finance Minister. Does he still need to write to the Finance Minister?

Yes. Ministers who are members of the House of Representatives are required to report all3 grants awarded in their own electorate to the Finance Minister. The letter should include the reason for the delay.

Q.2. My minister approved a grant without a specific recommendation from agency staff. Does she need to report this to the Finance Minister?

No. Whilst your minister may approve a grant under FMA Regulation 9 without a specific recommendation by agency staff, the minister must not approve a grant without first receiving written advice from agency staff on the merits of the proposed grant or group of grants (CGGs paragraph 4.2).

If agency staff had recommended that a grant be rejected, then your minister would be required to report the instance in his or her annual report to the Finance Minister (see paragraphs 38 to 43 in this circular).

Q.3. My minister decided to approve a grant that our agency recommended be rejected. However, the grant was not awarded. Does he still need to report this decision?

Yes. The requirement to report grants against agency advice applies to the decisions of your minister, and is not dependent on whether the grant was eventually awarded, or whether a grant agreement was entered into.

Similarly, if your minister approves a grant within his or her own electorate, but the grant is not awarded, your minister must still report his or her decision to approve the grant to the Finance Minister.

Q.4. Do variations to grant agreements need to be reported on agency websites?

Yes. Agency staff should reflect any major variations to grant agreements on their website, especially if the variation involves additional funding or a significant extension in time.

Q.5. Does the 14 day web-based reporting rule apply to variations to grant agreements?

No. It is better practice for agency staff to amend the website to reflect the variation as soon as is practicable.

Q.6. Our agency has decided to co-fund a grant with another agency. Do we publish all details of the total grant on our website, or only the amount that our agency is funding?

The agency that enters into the grant agreement should report the whole grant on their website. In the situation where both agencies enter into the grant agreement, then the lead agency should report the grant.

In cases where there is both Australian Government and private sector funding for a specific grant project, agencies are required to report only on the Australian Government contribution.

3 Except for the situations described in paragraphs 34 to 36 in this circular.

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Part 4 – Frequently asked questions

Q.7. My minister awarded a grant that will benefit her own electorate, and also the neighbouring electorate. Does she need to report the whole grant to the Finance Minister?

Yes. Your minister should report to the Finance Minister4 the whole grant, noting the amount of the grant that will benefit his or her electorate. If it is difficult to determine the exact amount that will benefit his or her electorate, then your minister should note that the exact amount benefiting his or her electorate cannot be quantified.

Q.8. Our agency has undergone some machinery of government (MoG) changes and now has responsibility for programs that have been moved from another agency. Should we report on our agency’s website, the grants that were awarded by the previous agency?

Yes. With MoG changes, the general principle is that records follow functions. Grants information must be retained on agency websites for two financial years, regardless of whether the functions that relate to the grants are transferred to another agency, or cease to exist. An agency transferring functions should agree with the gaining agency as to the date of transfer and then transfer the grants information accordingly. 

The Australian Public Service Commission has provided comprehensive guidance on implementing MoG changes http://www.apsc.gov.au/publications-and-media/current-publications/implementing-machinery-of-government-changes.

There may be cases where the functions relating to the grants are being abolished or transferred to an entity outside of government. If this is the case, then agency staff should contact the National Archives of Australia http://www.naa.gov.au/records-management/help/index.aspx for further guidance.

The above does not apply to ministerial reporting requirements for grants (CGGs paragraphs 4.2 to 4.4).  The start date for ministerial reporting requirements is linked to the date on which a minister is sworn-in as the responsible minister.

Q.9. Is there a mandatory requirement to acquit a grant?

No. The CGGs do not mandate that a financial acquittal is required for a grant. Agency staff should determine whether a financial acquittal is required. This decision should be based on: the risks involved; consultation with the grant recipient; the cost of compliance; and whether the entity has provided relevant information to an Australian Government regulator and availability of this information to agency staff.

Q.10. Are audited financial statements required for financial acquittals?

No. Agency staff should determine whether a financial acquittal is required and what is appropriate for a particular grant, taking into account the risks involved. Agency staff should be aware that independently audited financial statements may be expensive and difficult to source in rural and remote areas, or may comprise a large proportion of a low value grant. If an entity is regulated by the ACNC, then a financial acquittal should not be required, unless the granting activity is higher risk. Agency staff may instead seek a certification from the recipient that the grant money was spent for the purpose and information on any underspends.

4 Except for the situations described in paragraphs 34 to 36 in this circular.

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Part 4 – Frequently asked questions

Q.11. Our agency has a grant program that has been in place for a number of years. All grant agreements are in place and there will be no further funding rounds, new grant agreements or variations. Do we have to review our guidelines to ensure that they are consistent with the new CGGs?

No. You will only need to review your grant guidelines where a significant change occurs, such as a new funding round, or an extension of the current funding round that would result in new grant agreements being entered into. Another example of a significant change would be the changing of the risk profile associated with the granting activity if it is ongoing. You can contact Finance (grants@finance.gov.au) for advice on the need to revise your grant guidelines if you are unsure.

Q.12. The CGGs require agencies to develop grant guidelines for all new granting activities. Does this requirement apply to one-off or ad hoc grants?

It depends. A one-off or ad hoc grant generally does not involve planned selection processes and 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. These granting activities generally do not require specific grant guidelines unless the grant is significant.

However, if your agency is proposing a significant grant, a number of potential one-off or ad hoc grants that relate to similar purposes, or are of a recurring nature, you should look for opportunities to incorporate those grants within a program where practicable. You can contact Finance (grants@finance.gov.au) for further advice.

Where your agency provides one-off or ad hoc grants on a regular basis, agency staff should develop an overarching set of generic grant guidelines, consistent with the CGGs, which set out how such granting activities will be conducted.

Finance Circular 2013/02Page of Department of Finance and Deregulation

Attachment A

Grant guidelines – Better practice checklistGrant guidelines should be a single reference point for all potential applicants. They should be clear, consistent and fit for purpose. They should include information on the outcomes and objectives of the grant; governance arrangements, including roles and responsibilities; application and selection requirements and processes, performance monitoring; reporting and evaluation; funding amounts and arrangements; grant agreement arrangements; operational issues; legislative authority and complaint handling.The list below identifies the type of information that should generally be included in grant guidelines. It is not an exhaustive list, but provides a guide to assist agency staff to prepare guidelines.

Heading Information guidelines should contain

Objective Are the purpose, outcomes and objectives of the granting activity(ies) clearly defined?

Do the objectives link to government policy outcomes?

Eligibility Do the guidelines clearly identify the key priorities – e.g. targeted regions?

Do the guidelines clearly identify who is eligible to apply – e.g. individuals, specific business structures, government entities, certain groups or industry?

Is there anyone who cannot apply for funding?

Are there any provisions to allow for one-off or ad hoc grants?

Are there specific eligibility criteria that must be met – e.g. must have an ABN/ACN?

Are there cases where the eligibility criteria can be waived?

Application process

Do the guidelines list the opening and closing dates for applications? Is it clear if late applications will be accepted, and if so, under what circumstances?

Are the methods of applying and lodgement clearly outlined – e.g. email, online, post?

Are all relevant forms, templates and other documents included or are there web links to where materials can be found?

Do the guidelines identify processes, should a state or territory entity apply? How will these applications be considered?

Will applicants need to submit a detailed budget as part of their proposal?

Are all the necessary contact details provided to allow applicants to apply?

Do the guidelines specify any other attachments that must be included – e.g. letters of support, detailed technical specifications etc?

Funding Do the guidelines outline the total funding that is available and over what period of time?

Do the guidelines specify how much funding is available per grant or whether there are limitations on the amount that can be applied for? Are there any exemptions?

Are the guidelines clear about what items are eligible for funding? Are there items ineligible for funding?

Do the guidelines specify timeframes – e.g. are multi-year grants available?

Do the guidelines discuss any relevant tax implications – e.g. whether goods and services tax applies?

Finance Circular 2013/02Page 17 of 23 Department of Finance and Deregulation

Attachment A

Heading Information guidelines should contain

Grant agreement

What are the terms and conditions that recipients would need to comply with – e.g. is there an example grant agreement? Will the terms and conditions be varied for different types of organisations, such as state government entities?

What are the record keeping, reporting and acquittal requirements that recipients would need to comply with?

How will the grant be monitored? Are there any performance reporting requirements recipients would need to comply with? Will there be milestone payments?

What is the process where recipients fail to meet obligations?

Selection process

Do the guidelines clearly outline the selection process – e.g. open competitive, targeted, open or closed non-competitive, demand-driven selection (See CGGs para 13.11)?

Do the guidelines detail the selection criteria against which eligible applications will be assessed?

Do the guidelines specify what applicants need to address for each of the selection criteria? Do word limits apply?

Do the guidelines detail the weighting attached to each selection criterion? Do applicants have to successfully address all selection criteria?

Do the guidelines state how value with public money considerations will be taken into account in the awarding of grants?

Is an external advisory panel used to provide input? If so, which and what type of bodies or industries are on it?

Decision making

Are the roles and responsibilities of all parties clearly defined? What roles do the agency and minister have? What role do external experts have?

Is the assessment made by a panel? If so, who comprises the panel?

Do the guidelines discuss conflict of interest, bias and associated obligations on agency staff and applicants, and how these will be managed?

Do the guidelines identify who will make recommendations – e.g. departmental staff, independent subject matter experts?

Who will be the ultimate decision maker – e.g. the minister, agency chief executive or a delegate?

Other How will the successful and unsuccessful applicants be advised?

What are the feedback and complaint handling mechanisms? Do the guidelines set out the avenues of appeal?

Do the guidelines discuss how the grant activity or grant program will be evaluated?

Do the guidelines discuss the Privacy Act 1988 and associated obligations on agency staff and applicants?

Are program specific issues, such as the provision of equipment or premises by the Commonwealth clearly explained?

Do the guidelines set out any additional requirements, such as relevant qualifications for grant recipient staff or applicable legislation?

Finance Circular 2013/02Page 18 of 23 Department of Finance and Deregulation

Attachment B

Template – Publishing grant information on agency websites

Agency CBMS program title

Sub-program

Project title

Grant recipient

Purpose Special confidentiality provisions (Y/N), and reason

Value Commencement date

Grant term (months)

Grant funding location

Postcode

DEEWR Framework

Education

Program

Higher

Education

Research

Fund

Education

and

Training for

the

Unemploye

d

Finmaville

College Pty

Ltd

Provide 10

computers for a

training course.

Y – Intellectual

property

$20,000 15/06/2013 24 Dickson, ACT 2602

Finance Circular 2013/02Page 19 of 23 Department of Finance and Deregulation

Enter the state and suburb where the grant money will be primarily used. For grants that are provided to multiple postcodes (e.g. Australia-wide, state-wide or regional grants), provide details that best describe the

Use the postcode where the grant money will be primarily used.

Enter the total amount approved for the grant across all years of the grant in whole dollars, GST inclusive.

Use the date the grant agreement takes effect, which can be either the date that the agreement is entered into, or a specified starting date.

Use the program title contained in the Portfolio Budget Statements/Central Budget Management System (CBMS). One-off grants not aligned to a grant program should include the word ‘one-off’ in the program title. Sub-program can also be the program component or other identifier.

Use the recipient’s legal name and ABN/ACN, if applicable.

Enter the purpose for which the grant money has been provided.

Enter the total number of months that the grant agreement is for.

Enter the portfolio/ agency.

provisions in the grant agreement? For guidance, see http://www.finance.gov.au/procurement/procurement-policy-and-guidance/buying/reporting-requirements/reporting-confidentiality/principles.html.

Use the project title in the grant agreement, letter of offer, contract or instrument, as appropriate.

Note: if personal information is omitted due to the Privacy Act 1988, insert ‘Privacy Act’ in relevant columns where privacy information has been omitted.

Attachment C

Checklist for agency staff briefing ministers on proposed grants The Commonwealth Grant Guidelines (CGGs) require that ministers must not approve a grant before receiving written agency advice on the merits of the proposed grant, and this advice must at a minimum:

a. explicitly note that the spending proposal being considered is a ‘grant’b. provide information on the applicable requirements of the Financial Management and

Accountability Act 1997 and related Regulations; the CGGs (particularly any ministerial reporting obligations), including the legal authority for the grant

c. outline the application and selection processes, including the selection criteria, that were used to select potential grant recipients

d. include the merits of the proposed grant or grants relative to the grant guidelines and the key consideration of achieving value with public money.

There are many considerations that a minister needs to take into account before deciding to award a grant. This checklist contains a list of items that agency staff should consider when preparing the brief for ministers. Note that the list provided is not exhaustive and agency staff can include additional information in the brief.

Heading Information that should be considered when preparing briefs

Recommendationsection of the brief

Is FMA Regulation 9 approval identified?

Recommendations for proposed grant(s) or group of grants has been outlined?

While flexibility exists for agency staff on how they present grant recommendations, it needs to be clear which grant applications fully, partially or did not meet the selection criteria.

Supporting information in the brief or relevant attachments

Is there an explicit statement identifying that the spending proposal is a ‘grant’?

a) It is not sufficient to simply refer to a ‘spending proposal’. You may wish to refer to the decision tree and matrix included in Finance   Circular   2013/01 Grants, Procurements and other Financial Arrangements, to confirm that the financial arrangement is a grant

Has the legal basis for the grant been identified? Legal basis can be provided by:a) section 44 of the FMA Act

b) specific legislationc) section 32B of the FMA Act, and Schedule 1AA of the

FMA Regulations.

Has information been included to meet the applicable requirements of the FMA Act and FMA Regulations:a) FMA Regulation 8

b) FMA Regulation 9c) FMA Regulation 10, where offering multi-year grants or

grants that span two or more financial years

d) FMA Regulation 12, which requires ministers to record the basis for the approval of the grant when approving it.

Refer to Finance Circular 2011/01 Commitments to Spend Public Money (FMA Regulations 7 to 12)

Is there information that advises the minister on approving grants in their own electorate; and grants that have been

Finance Circular 2013/02Page 20 of 23 Department of Finance and Deregulation

Attachment C

recommended be rejected by the agency?

a) Proposed grants in the minister’s own electorate have been identified

b) It is clear which grants have been rejected by the agency. This may be met by identifying which grant applications did not meet the selection criteria.

Has the selection (eligibility and assessment) criteria and the relative weights been included?

Has the type of application and selection process been identified? Some examples include:

a) open competitive assessmentb) targeted competitive assessment

c) closed non-competitive selectiond) eligibility criteria are met, no competitive assessment

e) one-off or ad hoc basis.For more information on types of selection processes, refer to paragraph 13.11 of the CGGs.

Is there information on the merits of the grant applications? While there is flexibility for agency staff in how to present the merits of grants:

o is it clear which grant applications fully, partially or did not meet the selection criteria? Applications that fully met the selection criteria can be further categorised using the rating scales used in the appraisal process.

Has information outlining how the proposed grants represent value with public money been included?

Consider the following items:o how the proposed grants will achieve Australian

Government policy objectiveso agency grants management risk approach to all

phases of grants administrationo consultation undertaken with non-government

sector, in particular, when planning and designing the granting activity

o co-funding arrangements (if applicable)

o length of term of grant agreements

o recipient capability to deliver on outcomes sought.

Finance Circular 2013/02Page 21 of 23 Department of Finance and Deregulation

Attachment D

Template – Grants awarded in minister’s own electorate

Minister for Finance and DeregulationParliament HouseCANBERRA ACT 2600

Dear Minister,

I am writing to notify you of a grant that I approved in my electorate, as required by paragraph 4.3 of the Commonwealth Grant Guidelines.The grant was assessed as part of [an open, competitive, merit–based process] [a targeted process] and was recommended for approval by [the expert panel engaged to assess the grant on its merits][agency staff within my agency].Details of the grant are [included in the table below][contained in the copy of the attached letter to the grant recipient].Please contact [agency staff] on [phone] if you have any queries regarding this grant.

Program title

Project title

Grant recipient

Grant funding location

Grant amount

Grant term

Commencement date

Yours sincerely

Finance Circular 2013/02Page 22 of 23 Department of Finance and Deregulation

Attachment E

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

CBMS program title

Sub-program Project title Grant recipient Total grant value

Grant funding location

Postcode Brief statement of reason for decision

Framework

Education

Program

Higher

Education

Research Fund

Education

and Training

for the

Unemployed

Finmaville

College Pty Ltd

$20,000 Dickson,

ACT

2602 Consistent with the Government’s policy on education and training, I

considered that greater emphasis should be placed on access to training for

the unemployed. Finmaville College specifically targets the unemployed in its

programs, and does so cost effectively.

Finance Circular 2013/02Page 23 of 23 Department of Finance and Deregulation

Use the program title contained in the Portfolio Budget Statements/Central Budget Management System (CBMS). Sub-program can also be the program component or other identifier

Use the project title in the grant agreement, letter of offer, contract or instrument, as appropriate.

Use the recipient’s legal name and ABN/ACN, if applicable.

Enter the total amount approved for the grant across all years of the grant in whole dollars, GST inclusive.

Enter the state and suburb where the grant money will be primarily used. For grants that are provided to multiple postcodes (e.g. Australia wide, state-wide or regional grants), provide details that best describe the area where funding is to be provided. For example: Riverina, NSW, national.

Enter the postcode where the grant money was primarily provided.

Record the reasons why the minister decided to award the grant. Include the key factors underpinning the decision that are specific to the grant. It would not be sufficient to make a general statement such as ‘would make an effective and efficient use of resources’, ‘met the selection criteria’, or ‘did not agree with agency advice’, etc. The reason recorded here may be different to recording the basis of the approval as required by FMA Regulation 12.

Note: FMA Regulation 12 requires the approver of a spending proposal relating to a grant also record the basis of the approval.