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The NSW Ombudsman has released a paper Avoiding maladministration in the context of the NSW State election on good administrative practices over the caretaker period to support NSW public servants.

The paper does not contain formal recommendations, but instead refers to relevant guidance/legislation and considerations to improve public administration, and how to avoid conduct that might constitute or involve maladministration.

It highlights some pressing issues that all public servants need to be especially aware of at the time of a state election. Although some of the points are specific to an election period, many of the principles are good practice recommendations that ensure good governance and public administration:

• complying with ‘caretaker conventions’ - self-imposed limits that successive Governments have agreed to observe in the period immediately before an election, such as the incumbent Government agreeing not to make significant policy decisions, appointments, or enter into contracts and agreements which would bind a future Government. Further information can be found in the Department of Premier and Cabinet’s (DPC) Guidance Note Caretaker’ Conventions and Other Pre-Election Practices and Ministerial Code of Conduct
• continuing to fulfil ordinary administrative functions and avoiding unnecessary delays - agencies should ensure that processes are in place to ensure they do no deny or delay responding to a service request, enquiry or complaint or for an administrator to delay making routine decisions
• keeping and maintaining proper records - record keeping is an essential component of good administrative practice, where all significant decisions are to be documented to ensure accountability and transparency. Documents labelled cabinet-in-confidence must not be destroyed instead should be returned to DPC or confidential archiving after the election. Refer to the State Records Act on an agencies’ obligation relating to government records
• remaining apolitical and impartial, including social media activity - agencies should at all times, but with special caution in the period leading up to an election, act only in ways that are consistent with their apolitical status. This includes the impact of social media posts that could be seen as political may be amplified in an election period. Additional guidance can be found within the social media guidelines from the NSW Government as well as the Australian Public Service Commission’s Social media: Guidance for Australian Public Service Employees and Agencies
• avoiding conflicts of interest - in the context of an election, a new conflict of interest might arise when a government employee decides to run for office. Under section 71 of the Government Sector Employment Act 2013 (GSE Act), employees running for office in a NSW state election must apply for and be granted leave until the result of the election is declared. For senior public servants, or those whose involvement in a campaign is significant, this may mean taking leave or stepping aside from their role for a period
• appropriate use of public funds - the Public Service Commissioner’s Code of Ethics and Conduct requires government employees to use public resources in an efficient, effective and prudent manner which also includes using those funds for campaigning
• avoiding inappropriate use of public funds, including grants administration - irrespective of timing and whether it is during an election period, agencies need to ensure they have appropriate governance frameworks in place to avoid providing funds to communities in seats that are marginal or held by the Government of the day. Guidance for agencies is available within DPC’s Grants Administration Guide.

In response to the growing global demand for high-quality, transparent, reliable and comparable reporting of sustainability-related information by entities, the IFRS Foundation established the International Sustainability Standards Board (ISSB) in November 2021. In response to international developments, the Australian Accounting Standards Board (AASB) also announced its intention to develop a reporting framework and requirements for sustainability-related matters in Australia and the Auditing and Assurance Standards Board (AUASB)’s intention to update relevant assurance standards simultaneously (see joint FRC/AASB/AUASB Position Statement).

In June 2022, the Australian Accounting Standards Board (AASB) provided an update article Project insights: Developing sustainability-related financial reporting standards in Australia. The article provides an overview of the proposed Australian approach to developing separate sustainability-related financial reporting standards and to highlight some of the key elements of that proposed approach.

Sustainability-related financial information is defined as being ‘information that gives insight into sustainability-related risks and opportunities that affect enterprise value, providing a sufficient basis for users of general purpose, financial reporting to assess the resources and relationships on which an entity’s business model and strategy for sustaining and developing that model depend¹.’

The AASB intends to use the work of the ISSB as a baseline, with modifications for Australian matters and requirements where necessary to meet the needs to Australian stakeholders. In particular, the AASB is taking active steps to help ensure that Australia adopts reporting requirements that meet the needs of users of financial and other related information and supports Australia’s role in the international sustainability reporting environment.

In response to this topical issue, NSW Treasury has issued NSW Treasury Annual Reporting Framework which requires reporting GSF Agencies to publish climate-related financial disclosures for financial years 2023-24 and beyond, in alignment with the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations. The disclosures are recommended but not mandatory for financial year 2022-23.

The NSW Treasury issued the Annual Reporting Framework, which outlines the requirements that agencies will need to comply with when preparing their annual reports under the Government Sector Finance Act 2018. These requirements will apply for annual reports prepared after 1 July 2023, including annual reports prepared for the financial year ending 30 June 2023.

The key changes from previous requirements include:

• mandatory headings: six mandatory high-level content headings structure the information in agency annual reports. They are ‘Overview’, ‘Strategy’, ‘Operations and Performance’, ‘Management and Accountability’, ‘Sustainability’ and ‘Financial Performance’
• climate-related financial disclosures: as stated above, mandatory requirements will be effective from financial year 2023-24
• recommended annual reporting content:
  • reporting GSF Agencies are encouraged to include information about the costs and benefits associated with Machinery of Government (MoG) changes (NSW Machinery of Government Changes Guide) in their annual report if reasonable.
  • reporting GSF Agencies are encouraged to consider the International Sustainability Standards Board’s standards (once released)
• preparation of annual reports:
  • for financial year 2022-23, only agencies listed in the related GSF Regulation will be required to prepare annual reports
  • for financial year 2023-24 and beyond, all reporting GSF Agencies who prepare financial statements will also need to prepare annual reports, unless exempt under a principles and risk-based exemptions framework.

NSW Treasury plans to develop, in consultation with the sector, criteria for the principles and risk-based exemption framework ahead of 1 July 2023. This risk-based exemption framework will include considerations of climate risk in assessing eligibility for exemptions. For financial year 2023-24 and beyond, all reporting GSF agencies who prepare financial statements will also need to prepare annual reports, unless exempt. The new annual reporting framework will be assessed after its first reporting year to decide whether any changes or improvements are required. This assessment will also consider any changes or developments in global and national reporting standards and guidance, including the ISSB’s intended release of sustainability and climate-related financial disclosure standards in June 2023.

The NSW Treasury released the following pronouncements:

TPG 23-03 ‘Financial Reporting Code for NSW General Government Sector Entities’

The Financial Reporting Code (the Code) sets out the financial reporting framework for NSW General Government Sector (GGS) entities, with illustrative guidance on the form and content of the financial statements, including the note disclosures. The Code is not mandatory in its entirety and NSW GGS entities can tailor the model to their individual circumstances. This release supersedes the previous version TPG 22-06.

The Code for financial years ending on or after 30 June 2023 has been updated for changes in Australian Accounting Standards and Treasury policy requirements and encourages entities consider financial reporting impacts relating to:

• climate risks
• continuing impact of the COVID-19 pandemic such as the effects on the building construction industry, government grants and other financial support.

TPG 23-04 ‘Mandates of options and major policy decisions under Australian Accounting Standards’

This TPG is a mandatory policy and applies to GSF agencies required to prepare general purpose financial statements under section 7.6 of the Government Sector Finance Act 2018. The TPG does not apply to universities and their controlled entities. It supersedes and withdraws the previous Treasury Policy and Guidelines TPG 22-07 with the same title.

This TPG updates the mandates of accounting policy options and major policy decisions under Australian Accounting Standards to be applied in entity financial statements for financial years ending on or after 30 June 2023, with the main changes being the updated list of standards issued but not yet effective and confirm that Accounting Standards generally cannot be early adopted.

Topics discussed included:

AASB Meeting Highlights – 8-9 March 2023

• subsidiaries without public accountability
• non-current liabilities with covenants
• domestic post implementation reviews: specific public sector standards
• public sector long-term discount rates
• franking credits
• tier 3 not for profit financial reporting
• pillar two (global minimum tax)
• research update
• sustainability reporting project update
• sustainability reporting standard-setting framework
• sustainability reporting jurisdiction update
• climate-related financial disclosure
• sustainability reporting other business.

AASB Meeting Highlights – 1 February 2023

• sustainability reporting
• sustainability reporting and climate-related financial reporting.

Latest news, accounting standards and work-in-progress documents from the AASB included:

Topics discussed included:

IASB Meeting Highlights – 20-23 March 2023

• climate-related risks in the financial statements
• board work plan update
• disclosure initiative – subsidiaries without public accountability disclosures
• equity method
• primary financial statements
• post implementation review of IFRS 15 revenue from contracts with customers
• business combinations – disclosures, goodwill and impairment

IASB Meeting Highlights – 20-23 February 2023

• maintenance and consistent application – supplier finance arrangements
• post implementation review of IFRS 9 – impairment
• rate-regulated activities
• dynamic risk management
• financial instruments with characteristics of equity
• maintenance and consistent application
  • lack of exchangeability (amendments to IAS 21)
  • annual improvements
• business combinations – disclosures, goodwill and impairment.

IASB Meeting Highlights – 24-26 January 2023

• business combinations – disclosures, goodwill and impairment
• equity method
• disclosure initiative – subsidiaries without public accountability: disclosures
• primary financial statements
• taxonomy update
• maintenance and consistent application – supplier finance arrangements.

Latest news from the IFRS Foundation included:

Topics discussed included:

IPSASB Meeting Highlights – 14-17 March 2023

• public interest committee governance update
• program technical director’s report on work program
• measurement
• conceptual framework-limited scope update – next stage
• transfer expenses
• revenue
• reporting sustainability program information
• retirement benefits plan
• measurement – application update
• natural resources
• sustainability reporting
• the IPSASB’s next strategy and work program.

IPSASB Meeting Highlights – 23 February 2023

• administrative items
• measurement
• revenue/transfer expenses
• conceptual framework.

Recent news from the IPSASB included:

Topics discussed included:

AUASB Meeting Highlights – 15 March 2023

• FRC and audit quality update
• Treasury update – climate-related financial disclosure
• AASB update (including climate and sustainability)
• sustainability assurance – review of IAASB draft
• IAASB update & discussion
• 2022-23 AUASB technical work plan update
• GS 023 – engagement leader guidance – approval
• AUASB amending standard for AASB 101 update and other changes – approval
• not-for-profit guidance & withdrawal of GS 019 – approval
• IAASB strategy and work plan – AUASB submission
• ISA 500 audit evidence – review and update
• KAM reporting beyond listed entities – update
• GS 007 information gathering – update.

Latest news from the AUASB included:

Topics discussed included:

IAASB Meeting Highlights – 20-24 March 2023

• going concern
• disruptive technology
• sustainability assurance
• ISA for less complex entities
• listed entities and public interest entity.

Topics discussed included:

APESB Meeting Highlights – 23 February 2023

• proposed revisions to APESB pronouncements for quality management
• international and other activities
• proposed compilation of the code of ethics
• update on sustainability
• proposed revisions to APES 110 for engagement team – group audits independence
• update on IESBA tax planning and related services project.

Latest news and media releases from the APESB included:

Topics discussed included:

IESBA Meeting Highlights – 13-17 March 2023

• sustainability reporting and assurance
• sustainability
• use of experts
• emerging issues and outreach update
• public interest entity rollout
• IAASB-IESBA coordination.

IESBA Meeting Highlights – 10 February 2023

• public interest entity rollout.

Latest news and publications from the IESBA included:

Treasury’s recent releases and other guidance included:

DPC released the following memos and circulars: