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The NSW Ombudsman has released an ‘In Focus’ paper (the paper) on ‘Machinery of government changes and maladministration risks’. Machinery of Government (MoG) changes are initiated through an Administrative Arrangements Order (AAO) as a result of a government decision to change the allocation and structure of functions, resources and people. On paper, this appears to be a simple and straightforward process, but in reality, can be complex and risky, especially if the change is not properly planned and implemented, including ensuring robust controls to mitigate the risks. 

The paper provides the following considerations for agencies, with a focus on maladministration risks:

• importance of good change management 
• potential for administrative confusion and error following a MoG change 
• risk of control breakdowns during transition 
• process to ensure records are managed in compliance with relevant legislation 
• handling requests made under the Government Information (Public Access) Act 2009 
• ensuring complain handling processes are clear, available and accessible 
• processes to ensure compliance with the updated with Public Interest Disclosures Act 2022 requirements 
• impact on the service and program delivery during and post MoG change.

The NSW Treasury has issued the following pronouncements:

TPG 24-01 ‘Management of NSW Government Payments’ 

Under the Government Sector Finance Act 2018 (GSF Act), a GSF agency must manage government resources efficiently and effectively, which includes the making and receiving of a payment. In order for the NSW government to achieve its payment reform outcomes, the policy: 

• provides additional detail and context for agencies to meet the policy objectives of the GSF Act 
• supports the State’s digital, accessibility and inclusion objectives 
• supports the Federal Government's strategic plan for Australia's Payments System 
• provides requirements and guidance to help agencies meet the expectations of citizens, businesses, and suppliers relating to payments. 

This policy applies to all NSW government entities, including state owned corporations and replaces the previous policy, TC 21-01 ‘Digital payment adoption’.

TPG 23-23 ‘Funding for Redundancy Payments’ 

This policy, only applicable to GSF agencies, outlines the requirements to access funding arrangements for redundancy payments that are available to assist agencies to meet the on-off costs associated with redundancies. In order to access the redundancy fundings, agencies must complete the three-step approval process: 

• obtain approval from the Premier’s Department prior to an agency approving redundancy or redeployment programs 
• obtain approval from Treasury for the redundancy program before implementing 
• obtain approval from Treasury for reimbursement after program is implemented. 

This policy is applicable for the: 

• redundancy of non-executive employees 
• termination of the employment of senior executive employees where the termination of the employment is a result of the role or position being deleted from the agency’s organisational structure. It is a requirement that the role or position is no longer required by the agency, that it will not be re-established, and that it results in genuine savings. 

This policy does not apply to casual, temporary or fixed term employment. 

TPG 23-27 ‘Gender Impact Assessment Policy’ 

This policy, effective 1 October 2024, provides guidance to general government sector (GGS) agencies on when and how to produce gender impact assessments for new policy proposals (NPPs). 

Gender impact assessments consider how a proposed policy, program or project may have different impacts on people based on their gender, such as: 

• support better informed decisions in public policy resource allocation 
• highlight how women, men or gender diverse people may have different needs from policies, programs and projects due to their gender 
• challenge the perpetuation of gender norms within policy decisions 
• avoid negative impacts arising from gender-neutral/gender-blind policy decisions. 

Treasury releases directions for 2023-24 Mandatory Early Close 

Pronouncements relating to early close: 

• TPG 24-03 ‘Agency Directions for the 2023-24 Mandatory Early Close’ (TPG 24-03) 
• updated Treasurer’s Direction TD 19-02 ‘Mandatory Early Close as at 31 March each year’ (TD 19-02) 
• TD 24-04 ‘Amendment to TD19-02 Mandatory Early Close' as at 31 March each year’. 

Key changes to TD 19-02 include: 

• updated effective date from 1 March 2023 to 6 March 2024 
• updated name of Treasurer to Daniel Mookhey, MLC 
• removed Department of Planning and Environment in Appendix A and replaced with Department of Planning, Housing and Infrastructure 
• added the following agencies in Appendix A 
  • Department of Climate Change, Energy, the Environment and Water 
  • Independent Planning Commission 
  • Natural Resources Access Regulator 
  • NSW Childcare and Economic Opportunity Fund Board 
  • Premier’s Cabinet 
  • The Cabinet Office 
• removed the following agencies in Appendix A 
  • Department of Premier and Cabinet 
  • Ports Assets Ministerial Holding Corporation 
  • State Transit Authority of New South Wales. 

TPG24-03 supersedes the previous version, issued as NSW Treasury Policy Paper TPG22-11 ‘Agency Direction for the 2022-23 Mandatory Early Close’. TPG 24-03 contains the following notable changes from TPG 22-11: 

• in preparing pro-forma financial statements and early close PRIME returns, agencies do not have to update the State outcome group statements. Section 2.3.x of the TPG notes that the requirement for disaggregated disclosures are being reviewed by Treasury’s Accounting Policy and Advisory team 
• Section 2.3.ii of the TPG has added clarification that if the fair value assessment of non-financial assets results in material movements, both Prime and the general ledger should be updated for early close 31 March financial statements 
• amendments to defined terms: the term ‘cluster’ replaced with ‘portfolio’, and ‘principal cluster agency’ replaced with the term ‘principal department agency’. 

TPG 24-03 should be read in conjunction with TD 19-02, as amended from time to time. TPG 24-03 and TD 19-02 defines the minimum requirements for the early close procedures and also describe several procedures to confirm that key controls over agency balances are carried out and that there is early dialogue with Treasury and the Audit Office on significant accounting issues. Agencies may wish to perform additional procedures as part of a strategy to improve the quality and timeliness of financial reporting including the completion of hard close procedures. 

The early close procedures must be conducted as at 31 March 2024 for all entities listed in Appendix A (that are GSF Agencies) of TD 19-02. 

The table below outlines the returns the agencies are required to submit to the Treasury:

Appendix E of TPG 24-03 contains the preliminary reporting timetable for 2023-24 Mandatory Annual Return. Treasury will issue another pronouncement before 30 June 2024 outlining the year-end reporting requirements. 

TPG 24-05 ‘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 and provides illustrative guidance on the form and content of the financial statements, including the note disclosures, superseding the previous version TPG 23-03. Special purpose staff agencies should refer to Treasury Circular TC15-07.  

The Code is not mandatory in its entirety and NSW GGS entities may tailor the model to their individual circumstances. However, financial reports must be prepared in accordance with Australian Accounting Standards and other Treasury requirements, including TPG 24-06 ‘Mandates of options and major policy decisions under Australian Accounting Standards‘. 

Key changes to the Code include: 

• references to COVID-19 have been removed as the impact of COVID-19 is no longer considered material for most agencies. However, if the impact of COVID-19 is still material, then the agency should continue to disclose this in their financial statements 
• the requirements of NSW Treasury’s ‘Guidance on how to reflect the effects of climate-related matters in financial statements’ have been incorporated into the relevant note disclosures 
• AASB 2021-02 has become effective for this financial year, with agencies now required to disclose material accounting policy information. The Code outlines that agencies should consider removing immaterial accounting policy information from their financial statements. Appendix G contains further guidance on determining the materiality of accounting policy information 
• changes to the guidance notes for the summary of compliance in Appendices E and F to incorporate all appropriations related guidance issued separately for FY23 year-end reporting subsequent to the release of the previous TPG 23-03. This includes the impact from the Treasury and Energy Legislation Amendment Act 2022 which amended section 4.7 and added section 4.9a to the Government Sector Finance Act 2018 
• the state outcome group statements have been renamed to the disaggregated disclosure statements. Entities that are not government departments are no longer required to present disaggregated disclosure statements. Departments should still present disaggregated disclosure statements using the 2022-23 state outcomes as the basis. However, the state outcome names must not be used, a suitable functional description should replace the state outcome name. Departments that did not have disaggregated information presented by state outcomes in the 2022-23 Budget should use an alternate basis that reflects the major activities of the department. 

TPG 24-06 ‘Mandates of options and major policy decisions under Australian Accounting Standards’ 

This pronouncement updates the mandates of accounting policy options and major policy decisions under Australian Accounting Standards (AAS) to be applied in the financial statement for financial years ending on or after 30 June 2024. This mandatory policy applies to GSF entities required to prepare general purpose financial statements under section 7.6 of the Government Sector Finance Act 2018. A GSF Agency List Guide is available on NSW Treasury’s website. 

It does not apply to universities and their controlled entities. It supersedes and withdraws the previous version TPG 23-04. 

Key changes to the mandates include: 

• an update for the list of AAS issued but not yet effective with confirmation that these generally cannot be early adopted 
• modification for state outcomes group statements. Refer to the changes to the Code above for details. 

The Office of Local Government (OLG) has issued the following pronouncements: 

Circular 23-17 ‘Update on council’s obligations under the Modern Slavery Act 2018 (NSW)' 

This circular advises councils of the Guidance on Reasonable Steps (the Guidance) issued by the NSW Anti-slavery Commissioner (the Commissioner). 

The Modern Slavery Act 2018 (NSW) created new obligations for councils under the Local Government Act 1993 (the LGA) relating to modern slavery. Local councils are required to take reasonable steps to ensure that the goods and services they procure are not the product of modern slavery, and to report on those steps. The sector identified there was limited authoritative guidance available to assist in managing modern slavery risk. As a result, the Commissioner issued the Guidance to help entities manage modern slavery risks within their operations and supply chains. The Guidance became operative on 1 January 2024 and the Commissioner encourages councils to use the Guidance, including the annual reporting template in Appendix K, to guide their reporting. 

Circular 24-03 ‘Performance and suspension orders’ 

This circular advises councils that the OLG has published the revised ‘Performance and Suspension Orders Procedural Framework’ for issuing performance and suspension orders. The revised framework has been updated so that it is consistent with current statutory requirements. 

The framework provides information for councils on the process that will be followed when performance improvement orders and/or suspension orders are being considered or issued, including details relating to the appointment of temporary advisors, financial controllers and interim administrators. 

The Minister for Local Government or his/her delegate has powers under the Local Government Act 1993 to intervene in councils when they are dysfunctional or failing to meet their legal obligations. To help councils achieve the necessary improvement, the Minister can: 

• issue a Performance Improvement Order to encourage councils to drive their own improvement 
• suspend a council for up to 3 months, with a possible extension of a further three months in more serious cases. This power can be characterised as a ‘time out’. 

The decision regarding the action will be based on the nature and seriousness of the performance issue and response of the council.

*Excluded in the October – December 2023 updates due to cut-off date.

Topics discussed included:

AASB Meeting Highlights – 7-8 March 2024 

• service performance reporting 
• Not-for-profit (NFP) private framework (tier 3) 
• supplier finance arrangements 
• conceptual framework: NFP amendments (including SAC 1 amendments) 
• Post implementation review (PIR) AASB 1056 ‘Superannuation Entities’ 
• PIR Income of NFP entities 
• Financial Instruments with Characteristics of Equity ED 
• research and post-implementation review projects update 
• sustainability reporting. 

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

*Excluded in the October – December 2023 updates due to cut-off date.

Topics discussed included:

IASB Meeting Highlights – 18-22 March 2024 

• Post implementation review (PIR) of IFRS 9 ‘Impairment’ 
• power purchase agreement 
• second comprehensive review of the IFRS for SMEs standard 
• climate-related and other uncertainties in the financial statements 
• maintenance and consistent application – use of hyperinflationary presentation currency by a non-hyperinflationary entity (IAS 21) 
• PIR of IFRS 15 ‘Revenue from contracts with customers’ 
• equity method 
• rate-regulated activities. 

IASB Meeting Highlights – 19-22 February 2024 

• equity method 
• second comprehensive review of the IFRS for SMEs standard 
• maintenance and consistent application 
  • use of hyperinflationary presentation currency by a non-inflationary entity (IAS 21) 
  • annual improvements 
• PIR of IFRS 9 ‘Impairment’ 
• PIR of IFRS 15 ‘Revenue from contracts with customers’ 
• power purchase agreements 
• IFRS 9 amendments to classification and measurement 
• rate-regulated activities. 

IASB Meeting Highlights – 22-23 January 2024 

• second comprehensive review of the IFRS for SMEs standard 
• subsidiaries without public accountability 
• disclosure initiative – subsidiaries without public accountability disclosures 
• IFRS 9 amendments to classification and measurement 
• power purchase agreements 
• PIR of IFRS 15 ‘Revenue from contracts with customers’ 
• taxonomy 
• maintenance and consistent approach – IFRIC update.

Latest news from the IFRS Foundation included:

Topics discussed included:

IPSASB Meeting Highlights – 12-15 March 2024 

• improvements to IPSAS 2023 
• IFRIC alignment – narrow scope amendments 
• other lease-type arrangements 
• natural resources 
• adoption and implementation update 
• measurement – application phase 
• sustainability: climate-related disclosures 
• IPSAS 33 – Limited scope update 
• presentation of financial statements.

Recent news and publications from the IPSASB included:

*Excluded in the October – December 2023 updates due to cut-off date.

Topics discussed included:

AUASB Meeting Highlights – 13 March 2024 

• IESBA exposure drafts on International Ethics Standards for Sustainability Assurance and Using the Work of an External Expert 
• AUASB Sustainability assurance consultation paper 
• ASAE 3500 update. 

AUASB Meeting Highlights – 19 February 2024 

• Treasury update 
• AASB update 
• sustainability assurance workplan and consultation paper 
• update on 2023-24 work plan 
• approval of AUASB consultation paper on revised IAS 240 ‘The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements’. 

Latest news from the AUASB included:

*Excluded in the October – December 2023 updates due to cut-off date.

Topics discussed included: 

IAASB Meeting Highlights – 18-21 March 2024

• going concern 
• sustainability assurance 
• technology position 
• audit evidence 
• risk response. 

Topics discussed included: 

APESB Meeting Highlights – 5 March 2024

• international and other activities 
• update on sustainability 
• proposed project on APES 110 and reporting breaches 
• proposed revisions to APES 110 for tax planning services 
• update on financial planning 
• update on AI and digital technology project 
• update on parliament inquiries relating to accounting profession 
• risk register. 

Latest news and media releases from the APESB included:

*Excluded in the October – December 2023 updates due to cut-off date.

Topics discussed included: 

IESBA Meeting Highlights – 18-20 March 2024 

• firm culture and governance 
• technology 
• tax planning 
• IAASB-IESBA coordination (sustainability project update) 
• revisions of International Education Standards 
• PIE rollout. 

Latest news and publications from the IESBA included:

*Excluded in the October – December 2023 updates due to cut-off date.

Treasury’s recent releases and other guidance included:

The Premier released the following memos and circulars:

*Excluded in the October – December 2023 updates due to cut-off date.

TCO released the following memos and circulars:

PSC released the following circulars and memos:

DCS released the following circulars:

NSW Procurement Board’s recent Directions included:

*Excluded in the October – December 2023 updates due to cut-off date.

Inquiries and Reports tabled in NSW Parliament included:

*Excluded in the October – December 2023 updates due to cut-off date.

*Excluded in the October – December 2023 updates due to cut-off date.

*Excluded in the October – December 2023 updates due to cut-off date.

Recent IPART media releases included:

*Excluded in the October – December 2023 updates due to cut-off date.

Recent news included: