Transcript Implementing the Uhrig Review: implications of becoming an

Implementing the Uhrig Review:
implications of becoming an FMA agency
Corporate Governance Forum, Canberra
25 October 2005
Welcome and Introduction
Rayne de Gruchy CEO AGS
Corporate Governance
Commonwealth Statutory Bodies and
Office Holders
The Uhrig review*
Objective
• Advise on the corporate governance of
statutory authorities
– Regulators
– Service providers
*Review of the Corporate Governance of Statutory Authorities and
Office Holders (June 2003)
Outcomes from the review
•
Two templates
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–
•
Board
Executive Management
Governance Principles
–
–
–
Parallel communication
Statements of Expectations/Intent
Board best practice principles
Assessment Process
• Portfolio ministers were asked to assess their
portfolio bodies against the governance templates
and implement changes
• The following bodies are to be assessed:
– Statutory Authorities and Office Holders
– Prescribed Agencies
– Commonwealth Companies (not GBEs)
– Other bodies scheduled by the minister
Process
• Assess 160 bodies using templates
– Complete by March 2006
– Ministers responsible for assessment, not a selfassessment by the body
– Finance Minister to co-ordinate and monitor the
process
– Six monthly implementation reports from ministers
• Implementation completed by March 2007
• Branch
Two Governance Templates
(Ideal Types)
• Governance board
• Executive management
Board Template
A Board may be justified where:
• It has ‘full power to act’
– For example - commercial operations
Board: ‘Power to Act’
Board has power to act where Government
has delegated :
– freedom to determine strategy and direction
– ability to appoint and terminate the CEO, and
– oversight of risk
Justifiable Board
If a Board can be justified then:
• Apply best practice principles (Uhrig chapter 6)
• Boards should be governed by Commonwealth
Authorities and Companies Act 1997 financial
legislation
– Directors’ duties
– Bodies corporate
– Legally and financially separate from the
Commonwealth
Executive Management Template
• Appropriate where high degree of ministerial
control exists
• Appropriate for regulators, service providers,
research bodies
• Bodies legally and financially part of the
Commonwealth
• Bodies governed by executive management should
be covered by the Financial Management and
Accountability Act 1997 financial legislation
Other Elements
• ‘No Surprises’ principle
• Parallel Communication
– Inform minister and departmental secretary to ensure department
can advise minister
– Recognises the role of departments as the principal source of
advice to ministers
• Introduce Statements of Expectations and
Statement of Intent
– To clarify government’s expectations
– Public documents
– Should respect statutory independence of body
More information
Uhrig Report
www.finance.gov.au/governancestructures
List of CAC Bodies and FMA Agencies
http://www.finance.gov.au/finframework/cac_bodies.html
Moving from a CAC body to an FMA
agency – the HIC/Medicare Australia
experience
Anne Stumpf,
A/g General Counsel
Medicare Australia
On 1 October 2005, HIC moved from
•A statutory authority under the CAC Act,
with its own board, employment
framework and distinct legal identity, to
•“Medicare Australia”
a prescribed agency under the FMA Act;
a statutory agency under the Public
Service Act; and
part of the Commonwealth
Transition through:
•legislative amendments
•finance systems enhancements
•re-structure of HR system
•corporate governance changes
•re-branding, reflecting name change
•communication initiatives
Project approach:
•Governance Transition project team
•Project scheduling tightly managed;
Risk Management & Change Management
Plans
•Early engagement of key stakeholders:
- DHS, DEWR, APSC, DoFA, ANAO
Particular FMA issues
•CEIs and supporting Policies
•New financial delegations – regs 9, 13 &
10
•Customised training
•Reg 10 issues
- longer lead-time for some contracts
- contingent liability issues
Particular FMA issues (c’td)
•Lower threshold for open tenders, under
CPGs
•Enhanced contract reporting
•Drawing rights, Special Account, s 31
agreement
•Subsidiary company
“Transitionals” in legislation
•Part 3 of Schedule 2 to Human Services
Legislation Amendment Act 2005
•“Due diligence” work
HR Transition
•s 72 determination
•Remuneration Tribunal determination :
CEO
•Other PS Act determinations
•Continuity of HR process eg recruitment,
discipline
Corporate Governance changes
•s46 FMA Act – Audit Committee
•internal governance arrangements
•Statement of Expectations/Statement of
Intent
Re-branding and communication aspects
•Name change to “Medicare Australia” –
considerable re-branding work
•Communication to staff
•External communications
In conclusion
•Look for opportunity value
Moving from CAC bodies to FMA
Agencies the ACMA experience
Jonquil Ritter, General Counsel, Australian
Communications and Media Authority
Tips for achieving a smooth transfer
process
Anne Kelly, Special Counsel
AGENDA OF FIRST MEETING OF WORKING GROUP
A: Governance issues during the transition period
B: Preparing the staff for the new environment
C: Due diligence preparation for transition
A. GOVERNANCE ISSUES DURING THE TRANSITIONAL
PERIOD
– Role of the board in the transition process;
– Decision making during the transitional period
– Interaction of the board with the Minister
– Close liaison with other relevant department
B. PREPARING THE STAFF FOR THE NEW
ENVIRONMENT
— Process for ensuring staff are kept up to date with
arrangements
— Training on the new governance environment
C: DUE DILIGENCE PREPARATION FOR TRANSITION
— Functions of the authority
— Contracts and other arrangements
— Liabilities
Morning Tea
10.35am to 11am
Becoming an FMA agency
Employment issues
Richard Harding, Senior General Counsel
Becoming a PS Act Agency
— Employment Issues
Becoming a PS Act Agency
— Threshold issues
– To PS Act or not to PS Act?
– Transmission of business?
– Is there a change of employer?
Becoming a PS Act agency
— What instruments set terms and conditions of
employment?
– Constituting Act
– CEO determination under the Act
– Certified agreement
– AWAs
– Award
– Common law contracts
Becoming a PS Act agency
— What happens to these instruments on transfer to PS Act
employment?
– Material from constituting statute will go
– CA, AWAs and award will usually transmit to the new
employer
– Note WorkChoices changes
Becoming a PS Act agency
— What instruments will already be there waiting for you?
– The PS Act and all the instruments under it
– The APS Award
– Some other legislation?
Becoming a PS Act Agency
— How will the staff be moved?
– Usually, by the PS Commissioner under section 72 of
the PS Act
– Unusually, by legislation
Becoming a PS Act agency
— Preserving conditions using the PS Regs
– Scheme in regulation 8.2 will be relevant
– Operate until a new award, CA or AWA comes into
operation
Becoming a PS Act agency
— Some other issues to consider
– Policy parameters
– Other employment legislation may apply
– APS Values and Code of Conduct
– Delegations
Financial management under the FMA Act
handling public money, appropriations and
procurement
Kathryn Graham, Senior General Counsel
Simon Konecny, Senior Executive Lawyer
Introduction
— Section 44 of the FMA Act
— Chief Executive’s Instructions
Scenario Part 1: Banking and appropriations
Banking
— Is the XYZ Bank compliant with the core protocols?
— New bank accounts must be opened
Appropriations
— The Consolidated Revenue Fund
— Is there an appropriation which will cover the
expenditure?
— What are record keeping responsibilities?
– maintaining a ledger
Retaining revenue
— Section 31 agreements
— What will be in the agreement?
— Who will sign it?
— Recording credits to the appropriation
Drawing rights
— What do drawing rights do?
— For debiting an appropriation
— For making payments of public money
— Who will we issue drawing rights to?
Scenario Part 2 - Procurement
FMA Regulates
— The entry of contracts
— The procurement process
— Contract terms
Relevant Regulations affecting the entry of contracts
— Regulation 9
— Regulation 10
— Regulation 12
— Regulation 13
Relevant Provisions affecting the Procurement
Process
— Regulation 8 – Commonwealth Procurement Guidelines
— Regulation 9 – Government Policies
Relevant Regulations affecting contract terms
— Regulation 9 – Government Policy
— Regulation 10 – contingent liabilities
Issues when outsiders spend public money
— They become subject to the FMA Act
— Issues relating to banking, delegations and drawing rights
From ATSIC to ATSIS to OIPC
Bernie Yates, Deputy Secretary, Office of Indigenous
Policy Coordination
From ATSIC to ATSIS
to OIPC
AGS Workshop on
Implementing the Uhrig Review
25 October 2005
Sub-title
“Birth, Death & Resurrection”
Timeline to the Changes (1)
• Gov’t announces ATSIC/ATSIS changes
17 April 2003
• ATSIS established as FMA agency
1 July 2003
• Gov’t announces new arrangements
in Indigenous affairs
15
April 2004
• Legislation introduced to abolish ATSIC
27 May 2004
• Senate Committee reference
Timelines (2)
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•
ATSIC High Court challenge
Election announced (Bill lapses)
Bill reintroduced
Bill passed, ATSIC abolished
ATSIC Regional Councils
abolished
• ATSIS abolished
Sept 2004
Sept 2004
Late 2004
March 2005
30 June 2005
30 June 2005
What was ATSIC: platypus?
Hybrid beast: CAC agency, BUT:
• No separation of powers between elected &
administrative arms (policy setting & funding
decisions – implications for trust/nepotism)
• Minister appointed CEO (subject to Board’s
agreement)
- CEO had dual accountabilities
• Minister approved Budget framework
(quarantined 75% of program funds)
• Staff under PS Act (elected arm involved)
• Governance tensions ‘built in’
(1) ATSIC to ATSIS (transitional)
Government announcement:
• ‘Separation of powers’
(policy V’s funding decisions)
17 April 2003
Budget incorporation:
May 2003
Start-up:
1 July 2003
(1) ATSIC to ATSIS (transitional)
New administrative arrangements:
• New FMA Executive Agency (ATSIS), with former ATSIC funds
• Government-ATSIC Transition Agreement (‘protocol’)
• MoG change & transfer of 1200 staff & almost $1bn administered
funds (20+ programs)
• Shift to FMA operating arrangements (including first-time provision
of $22m employee entitlements & depreciation)
• Minister’s Directions to ATSIS CEO (including continuing policy role
for ATSIC & Regional Councils)
• Communications strategy
(2) ATSIS to New arrangements
Announcement:
15 April 2004
Budget incorporation
(transitional, via DIMIA)
May 2004
Start-up:
1 July 2004
(2) ATSIS to New arrangements
New administrative arrangements
• MoG changes, including s.72 transfer of 1200 staff to 8
portfolios/10 agencies (including new employment conditions)
• Establishment of 29 whole-of-government Indigenous
Coordination Centres across Australia (including coordinated
funding arrangements for ex-ATSIC programs & continuing
policy role for Regional Councils until July 2005
• Transitional Budget arrangements (s.27 $$ transfers effected
later in 2004)
• Communications strategy
(3) Slow death of ATSIC/ATSIS
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•
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ALP/Govt back abolition of ATSIC
Bill introduced
Senate Committee reference
Election (Bill lapsed)
Bill reintroduced
High Court challenge
to Transition Agreement
Bill passed, ATSIC abolished &
set basis for assets transfer
ATSIC Regional Councils abolished
ATSIS abolished
April 2004
27 May 2004
16 June 2004
October 2004
November 2004
Sept/Oct 2004
March 2005
30 June 2005
30 June 2005
Lessons
• Indigenous affairs experience more one
of survival than a ‘best case’ (count
your Uhrig blessings)
• Days are over for making career
change decisions between agencies
aimed at avoiding Ministers (!)
• Establish dedicated transition support
team with relevant expertise
- target exceptional people, including
CAC/FMA/legal knowledge; but must
be
practical (keep you out of jail;
Lessons
• Don’t squander time (every day is
precious): can achieve remarkable
things in impossible timelines when
you have to (not recommended for a
long life)
• Involve/manage stakeholders (advisory
group?)
- critical importance of
communications (don’t
rely on mindreading)
• Close connections to Minister/Office
Lessons
• Don’t go it alone: involve central
agencies early: they have important
expertise; can’t avoid them, so why not
use them?
• Have faith that there is life after death
(if you’ve prayed a lot)
Questions
…Good luck
Lunch
Please join us for lunch