CEI 3.3 Grant Management

1. Scope of this instruction

This Chief Executive’s Instruction (CEI) outlines the policy framework and requirements for grants management in DAFF, including those set out in the Financial Management and Accountability Act 1997 (FMA Act), the Financial Management and Accountability Regulations 1997 (FMA Regulations) the Commonwealth Grant Guidelines, and finance circulars issued by the Department of Finance and Deregulation (available at www.finance.gov.au/grants).

It does not cover categories of expenditure such as procurement, entitlements, payments to the states made under the Federal Financial Relations Act 2009 (including Specific Purpose Payments, National Partnership Payments), nor payments made under the Department of Finance and Deregulation’s guidance on discretionary compensation mechanisms.

2. Policy principles

Grants must be developed, managed and reported in accordance with the legislative and policy framework set out in the Commonwealth Grant Guidelines.

Grants must also be managed in accordance with the department’s ‘Grants management manual’ (see the Grants Management on Mylink).

Grants are to be allocated on the basis of their cost-effectiveness in achieving the department’s outcomes and objectives, compared with alternative intervention methods.

All new and active grants must be entered into the department’s Clarity™ grants management system.

The key principles detailed in the Commonwealth Grant Guidelines to be applied to grants administration are:

• robust planning and design (i.e. relevant planning issues, including risk management, have been addressed and built into the design of the grant activity)
• outcomes orientation (grant activities should have a performance framework that links the department’s strategic directions and the grant’s operational objectives to government outcomes)
• proportionality (grant processes should be commensurate with the scale, nature, complexity and risk of the grant activity)
• collaboration and partnership (there should be constructive and cooperative relationships between the department, the grant recipient and other stakeholders)
• governance and accountability (grant activity should be underpinned by solid governance structures and clear lines of accountability)
• probity and transparency (decisions relating to grant activity are impartial, appropriately documented, reported and publicly defensible)
• achieving value with public money (careful comparison of costs, benefits and options is undertaken for grant activities).

3. Target audience

This CEI is applicable to all officials (as defined in the ‘Definitions’ section) in the Department of Agriculture Fisheries and Forestry (DAFF).

4. Breaches

Officials are bound by section 13 of the Public Service Act 1999 (the PS Act Code of Conduct) and section 44 of the Financial Management and Accountability Act 1997 (FMA Act) to use Commonwealth resources in an efficient, effective and ethical manner that is not inconsistent with the polices of the Commonwealth. Officials who do not comply with this CEI may be found to be in breach of these provisions and sanctions may apply.

5. Departmental instructions

5.1 Responsibilities

Program managers must:

1. ensure that grant program guidelines (and operational procedures, if necessary) are developed for all new grant programs and are consistent with the Commonwealth Grant Guidelines and the legislation or government requirements under which the programs are established
2. seek legal advice on grant program guidelines, in particular the eligibility criteria, before finalising the guidelines
3. seek approval for grant program guidelines by the Expenditure Review Committee (ERC) and Cabinet
4. seek advice from the Grants and Project Management Section when proposing a change to guidelines, in order to determine if further ERC and Cabinet approval is needed
5. ensure comprehensive, accurate and up-to-date information is available to potential applicants, including publishing grant program guidelines on the department’s website
6. ensure that any unpublished grant operational procedures that may affect decision making are entered onto the department’s Freedom of Information Act 1982 - Section 9 statement
7. ensure all applications for grants are assessed against pre-determined eligibility criteria in a manner that is fair, honest and of the highest professional standard
8. provide advice to the minister, when seeking his FMA Regulation 9 approval, on the requirements of the Commonwealth Grant Guidelines, the merits of a proposed grant and the recommended basis for the decision
9. ensure the basis for each grant approval decision is recorded, e.g. on the approval minute
10. ensure that grant information is correctly reported, e.g. for the Senate orders, for annual reports, published on the department’s website, in the Clarity™ grants management system
11. ensure legally enforceable agreements are established for grants setting out the terms and conditions under which the grant is made after seeking appropriate legal advice
12. review or evaluate grant programs at least every three years, or at the end of the program where the program spans less than three years.

Grant administrators must:

• adhere to all processes set out in the grant program guidelines and operational procedures
• ensure that all decisions and outcomes in the selection of grant applications are publicly defensible, able to withstand scrutiny and documented in accordance with the department’s record keeping requirements (refer CEI - Recordkeeping)
• ensure appropriate approvals have been given, and that the agreement is signed by an appropriate delegate, prior to any grant payment being made
• regularly and systematically monitor grantee compliance with the funding agreement.

The department’s central area, the Grants and Project Management Section, is responsible for:

• maintaining the department’s ‘Grants management manual’ and templates
• coordinating department-wide reporting on grants
• advising grant administrators, program managers and the Executive on grants administration.

DAFF Clarity™ Grant Management System (GMS)

New and active grants must be entered into the department’s Clarity™ grants management system with details including:

• ERC/Cabinet approved grant program guidelines (for each grant program)
• FMA Regulation 9 grant approval
• individual agreement information, including the date each funding agreement takes effect
• commitment and payment processing information
• acquittal and follow-up action on outstanding matters.

5.2 Reporting

Information on each grant must be published on the department’s website within seven working days of the individual funding agreement being signed by the Commonwealth. If a privacy breach would result from publishing personal information, the grant information may be published without identifying the personal information.

Details of grants or grant programs must be reported in the department’s annual reports, as required by the Department of the Prime Minister and Cabinet.

Senate Order 95 (June 2008) requires a report on all grants approved
(i.e. FMA Regulation 9 approval) during the specified timeframe, to be tabled by the minister in the Senate at least seven days prior to Senate Estimates hearings.

Senate Order 192 (Murray Motion) requires all contracts (including grants) of $100,000 or more to be published on the department’s website. All grants in this category must be recorded on the department’s contract register.

6. References

6.1 Legislation

• Financial Management and Accountability Act 1997 sections 13, 14, 19, 26, 27, 44 and 48
• Financial Management and Accountability Regulations (as amended) - Regulations 3 and 7to13
• Financial Management and Accountability (Finance Minister to Chief Executives) Delegation (as amended)
• Public Service Act 1999 and the Acts Interpretation Act 1901, sections 34AA and 34AB – Delegations

6.2 Internal guidance/instruction

• Grants management manual
• DAFF Finance Policy 1/2008 Regulation 10 - Authorisation of Future Spending Proposals
• DAFF Grants Management Manual and templates

6.3 External guidance/instruction

• Commonwealth Grant Guidelines (July 2009)
• Finance Circular 2011/05 – Chief Executive's Instructions
• Finance Circular 2011/01 – Commitments to spend public money (FMA Regulations 7-12)
• Finance Circular 2009/04 – Grants reporting requirements
• Finance Circular 2009/03 – Grants and other common financial arrangements
• ANAO Better Practice Guide – Administration of Grants (May 2002)

7. Definitions and Acronyms

Change History