Policies and Procedures for the Management of DFAT International Relations Grants Program

August 2013

1. Overview

The purpose of this guide is to provide clear, concise and tailored guidance for the management of the International Relations Grants Program, including specific advice on the management of Foundations, Councils, and Institutes (FCIs).  All references to grants in this guide should be read in the context of the IRGP.  Departmental-wide grants advice is the policy responsibility of the Financial Services Branch (FSB).

The IRGP is the main grants program within the Department of Foreign Affairs and Trade.  A combined total of approximately $6.8m in Administered and Departmental funding was allocated to the IRGP in 2013-14.

The International Relations Grants Program (IRGP) provides grants to foster people-to-people and institutional links – bilaterally and regionally – in support of the Government's foreign and trade policy goals and to project a positive contemporary image of Australia.

IRGP grants support professional, community and institutional linkages between Australia and its partners on contemporary issues of shared interest including the arts, media, education, science, technology and social development initiatives such as health and sport.

The majority of IRGP grants are managed by the department's Foundations, Councils and Institutes.  They are managed by the relevant geographic division and have secretariats located in these divisions.  The Foundations, Councils and Institutes are:

The IRGP also includes Direct Grant Programs:

2. Grants Administration

The objective of grants administration is to promote a proper use of Commonwealth resources, through collaborating with the non-government sector, to achieve government policy outcomes. 

In managing grants the department adheres to the Commonwealth Grant Guidelines (CGGs), which are a legislative instrument issued by the Finance Minister under section 64 of the FMA Act and FMA Regulation 7A. Regulation 7A requires staff members to act in accordance with the CGGs when performing duties in relation to grants administration.  Staff members must also act in accordance with the Department’s Financial Management Manual and Chapter 8.7 relates specifically to Grants administration.

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. The CGGs apply to all forms of granting activity.  It is important to document reasons why non-competitive selection processes are followed and the relevant approval.

Grants administration covers all processes involved in granting activities and includes: planning and design; selection and decision-making; the making of a grant; the management of a grant agreement; the ongoing relationship with grants recipients; reporting; and review and evaluation. It also covers a situation where another agency or third party is responsible for the administration of an agency’s granting activity, such as in the case of Direct Grant Recipients.

References

The Department of Finance and Deregulation’s Grants Policy Framework website provides links to the following documents:

Where further information on a case-by-case basis is required, IRGP program managers should contact Executive Planning and Evaluation Branch (EXB) for assistance in the first instance.

3. Defining Grants

Agency staff must establish and document whether a proposed activity is a grant before applying the Commonwealth grants policy framework. 

Program managers must determine whether a financial arrangement is a grant, based on the substantive purpose and characteristics of the arrangement, document the reasons for treating the arrangement as a grant, and attach a copy of the reasons to the spending proposal.

FMA Regulation 3A(1) defines a grant as an arrangement for the provision of financial assistance by the Commonwealth:

However, there are various types of arrangements that may provide financial assistance, but are taken not to be grants. FMA Regulation 3A(2) provides a list of these, which includes certain compensation payments, act of grace payments, tax concessions or offsets, certain benefits payable under other legislation (such as payments of entitlements made through the Social Security (Administration) Act 1999), payments made to a State or a Territory under the Federal Financial Relations Act 2009 and payments treated by the Commonwealth as Official Development Assistance.

3.1 ‘Grants’ to FMA Act agencies

Even though ‘grants’ to FMA Act agencies are technically not grants under the CGGs (i.e. a grant is paid to a recipient external to the Commonwealth) staff members must treat these payments as grants to ensure transparency.

3.2 Procurement

Procurement is the acquisition of goods and services by DFAT for its own use or acquired on behalf of another agency or third party.  Where a proposed financial arrangement includes grant and procurement elements (e.g. grant management services procured by DFAT for the department’s benefit), staff members must identify the elements and manage them in accordance with the CGGs or the Commonwealth Procurement Rules.

3.3 Agreements with Management Components

Where a grant application includes a proportion of the funding directed towards overall management costs of the organisation (embedded management component), as part of the total funding amount requested, this component may be considered an integral part of the grant (i.e. not a separate procurement) provided the funds are not directed to the organisation's ordinary running costs incurred regardless of whether the grant is awarded or not. 

3.4 Arrangements are not taken to be grants

Payments under Australia’s Overseas Development Assistance program, such as payments under the Direct Aid Program are not grants.

Where a program manager is unsure whether an activity is a grant or procurement, an email seeking clarification should be sent to the Financial Management Inbox, copied to the Evaluation and Audit Section Inbox.

4. General Requirements

When performing duties in relation to grants administration, staff members must comply with relevant government policies and legislation, including:

4.1 Key principles for grant management

Staff members must consider the following principles when administering grants:

While all staff must follow the principles, the Commonwealth Grant Guidelines (CGGs) allow some flexibility regarding how they are implemented considering proportionality and risk management.  Refer to the CGGs for more information.

4.2 Advisory boards

Members of advisory boards who provide advice that directly informs a grant approver’s decision about a grant are considered to be DFAT officials and must comply with the FMM and CGGs.

Grant administrators should ensure members of advisory boards are aware of their obligations under the Commonwealth Grant Guidelines, such as seeking approval for any non-merit based selection process, documenting their assessments against eligibility and selection criteria, and declaring conflicts of interest.

5. Managing IRGP Grant Programs

As noted in the introduction, the Commonwealth Grant Guidelines and the ANAO’s Implementing Better Practice Grants Administration [PDF] provide comprehensive advice on the management of grant programs. 

Grants administration encompasses all processes involved in granting activities, and includes:

  1. Planning and design;
  2. Selection and decision-making;
  3. The making of a grant;
  4. The management of grant agreements;
  5. The ongoing relationship with grants recipients;
  6. Reporting; and
  7. Review and evaluation.

The information contained in this chapter is intended to provide IRGP-specific advice and should be read in conjunction with the more detailed information in the publications noted above.

5.1 Planning

5.1.1 Guidelines on the Department’s Website

Grant information published on the Department’s website should be sufficiently comprehensive that potential grant applicants have access to adequate information to submit a grant application.  At a minimum, the guidelines should also include:

Grant Guidelines- Better Practice Checklist attached to Finance Circular 2013/02, provides a checklist of the information that should be provided.  The Australia International Cultural Council’s Guidelines were developed in consultation with The Department of Finance and Deregulation in 2012 and also provide an example of best practice for information that should be published on the Department’s website.  

New or revised program guidelines must be developed where significant changes have been made to the current granting activity.  These guidelines must be approved by the Expenditure Review Committee where they are high risk or sensitive.  Where the risk has been assessed as low or medium the responsible portfolio Minister must write to the Finance Minister.  EXB and the CFO should be consulted before any approach is made to the Minister or the Department of Finance and Deregulation, for any significant change to IRGP activities or a New Policy Proposal (NPP) in relation to the IRGP.

Grant program managers may also consider proactive strategies to target grant fund recipients.  The aim should be to identify and approach suitable individuals, organisations or groups with a view to carrying out funded projects that are consistent with legal and government requirements. 

5.2 Funding Arrangements

5.2.1 Departmental and Administered allocations

IRGP grant programs may be funded from either Departmental or Administered appropriations.  The funding allocations for 2013-14 are attached.

5.2.1.1 Departmental allocation

The Departmental Executive allocates Departmental funding to supplement allocated Administered funding.  Divisions are responsible for the appropriate day-to-day management and expenditure of these funds.  They are subject to the Department’s standard financial management requirements (e.g., End-of-Month reports, Mercury administrative procedures checklist, SAP budgeting and planning etc). 

The Departmental allocation is used to pay for board and associated expenses, program support activities and programs which are developed and delivered using “in-house” resources, including board and secretariat members.  Departmental funding may also be used to fund grant programs if required as long as these grant programs are consistent with the published guidelines and business plan. 

IRGP program managers seeking increases in Departmental funding allocations should do so in accordance with regular Departmental mechanisms.  The key vehicle for this is the annual Budget Allocation Review (the BAR).

Cost Centres for the Departmental allocations are:

Cost Centre Cost Centre Name
K0060 Australia China Council
P0041 Australia India Council
P0040 Australia Indonesia Institute
K0075 Australia Japan Foundation
K0050 Australia Korea Foundation
P0062 Australia Malaysia Institute
P0061 Australia Thailand Institute
R0033 Council for Australia Arab Relations
C0013 Council on Australia Latin America Relations
N0046 United Nations Association of Australia
5.2.1.2 Administered allocation

The majority of the Department’s IRGP grants are funded through an Administered appropriation.  All IRGP programs currently receive an IRGP Administered allocation.  Administered allocations are within the envelope of overall IRGP appropriation, and remain fixed until the overall appropriation changes or when internal allocations are re-prioritised through the annual IRGP review in April-June.  EXB and the CFO must be consulted before any increase in allocation is sought or NPP is put forward that may have resource implications for the IRGP.  

As with Departmental funding, IRGP Administered allocations are managed through standard Departmental processes and are subject to an annual review by the Departmental Executive.  EXB is responsible for coordinating the allocation of this administered funding.  The IRGP Administered allocation may only be used to fund grants and only for grants to external parties.  In other words, IRGP Administered funding must be used exclusively for grants and may not be used as subsidies of general secretariat expenses or support for research officer functions.

Relevant IRGP payment codes and internal order numbers are as follows:

FCI/Other Grant Programs Coy Code Internal Order Cost Centre GL Code Payments Internal Order Refunds
Current Year
GL Code Refunds
Current Year
Internal Order Refunds
Prior Year
GL Code Refunds
Prior Year
Australia China Council 2000 210004 X2030 28565 210004 28565 240180 18016
Australia Korea Foundation 2000 210005 X2030 28565 210005 28565 240180 18016
Australia India Council 2000 210006 X2030 28565 210006 28565 240180 18016
Australia Indonesia Institute 2000 210007 X2030 28565 210007 28565 240180 18016
Australia Japan Foundation 2000 210180 X2030 28565 210180 28565 240180 18016
Australia Malaysia Institute 2000 210243 X2030 28565 210243 28565 240180 18016
Australia Thailand Institute 2000 210242 X2030 28565 210242 28565 240180 18016
Council for Australia-Latin America Relations 2000 210240 X2030 28565 210240 28565 240180 18016
Council for Australia-Arab Relations 2000 210241 X2030 28565 210241 28565 240180 18016
Australian International Cultural Council 2000 210009 X2030 28565 210009 28565 240180 18016
Australian Institute of International Affairs 2000 210008 X2030 28565 210008 28565 240180 18016
Australian Member Committee of the Council for Security Cooperation in the Asia Pacific 2000 210021 X2030 28565 210021 28565 240180 18016
Australia National Commission for UNESCO 2000 210015 X2030 28565 210015 28565 240180 18016
United Nations Association of Australia 2000 210014 X2030 28565 210014 28565 240180 18016
United Nations Youth Association 2000 210018 X2030 28565 210018 28565 240180 18016
Australia France Foundation 2000 200340 X2010 28565 200340 28565 200680 18016

5.2.2 Departmental Expenditure

Board and associated administrative expenses are a recognised cost to FCIs and other bodies managed by external boards. 

Board expenses may include:

Other administrative expenses:

To ensure FCIs manage their resources in an efficient and effective way which maximises the amount of money devoted to program delivery, expenditure on board expenses should be limited to 10% of the FCIs’ total DFAT annual administered and departmental funding allocation.  (Revenue from third parties is excluded).  FCIs and other institutions proposing to spend in excess of this limit must consult with EXB and FSB prior to undertaking the proposed activity, with supporting opinion from relevant post.

Even though IRGP Administered funding may be taken into account when calculating the upper limit available to spend on board and associated administrative expenses, it may not be used to fund any of these costs.  Board and associated administrative expenses must be fully funded from the FCI’s Departmental allocation.  IRGP Administered money must be used exclusively for grants and not administrative expenses.

5.2.3 Grants for future activities and end of year accounting

Ideally grants issued in one financial year will fund activities that begin and conclude in the same financial year.  However, this is not always possible, particularly in the cases of grants issued at the end of the financial year and multiyear grants.

When IRGP managers receive grant proposals for the following financial year, and where grant funding has been officially allocated (usually in June each year), grant approvers may, on recommendation of the board, approve grants. 

Treatment of multiyear grants is outlined at 5.3.3.4 FMA Regulation 10 below.

Unallocated funds and projected underspends are to be declared in the annual review process.  Projected underspends should be flagged with EXB as early as possible and funds may be returned to the centre. 

At the end of the financial year, IRGP funds lapse and cannot be carried over to the following year.  If a grant agreement has been signed but payment cannot be made before the end of the financial year, the grant can be recorded as a current year expense by entering an accrual in SAP End of Month Schedule 6 (Accrued Expenses). To accrue the grant expense there must be an actual liability to pay the grant recipient (ie both parties have signed the grant agreement before 30 June).

In the event that an IRGP manager anticipates an over-spend for an approved Administered grant program, EXB and FSB must be consulted as soon as possible to ascertain whether additional funding may be available.  In some cases, it may be possible to arrange for a re-allocation of funds from another grant program that is funded from the same appropriation, if the funds are available.  IRGP managers must not make commitments that would overspend their allocations unless they have consulted with EXB and FSB and received formal approval to proceed.  NB – Administered allocations are currently made to internal orders for which availability control has been activated.  This means that SAP will not process Administered transactions unless there is sufficient remaining budget (Plan Version 3).

5.2.4 Unearned income

Unearned income is income received from an external entity for which goods and services are yet to be provided by the Department.  All unearned income should be recorded in the SAP end of month (EOM) schedules.

5.3 Selection of Projects

Competitive, merit based selection processes should be used to allocate grants, unless specifically agreed otherwise.   It may be appropriate to use non-competitive processes when the number of service providers is very limited and these providers have an established record of delivering the grant funded activities. Where a non-competitive, merit based selection processes is planned the reasons why this approach will be used must be documented and signed-off by the grant approver. Inter alia, this means that the approver must document why a merit based selection process has not been undertaken where grants are to be allocated to Direct Grant Recipients

5.3.1 Advertising a program

Grant application rounds are conducted at least annually.

All IRGP grant programs offering individual grants must be advertised on the DFAT website.  Other forms of advertising include Australian or international newspapers, contacts mail outs or emails, newsletters, grants websites (e.g Grantslink) or sector-specific sites (e.g. Artshub), press media or twitter releases.

When advertising a grants program, the target audience should be considered and the following information should be provided either directly or via a link to the program website:

Staff members should not seek information from grant applicants where information is already collected by other Commonwealth entities and is available to DFAT. In particular, agency staff mustnot request information provided to the Australian Charities and Not-for-profits Commission (ACNC) by an organisation regulated by them.  (Staff members should use the search facility at acnc.gov.au to confirm whether an applicant is regulated by the ACNC.)
The majority of grant applications should be submitted through an on-line portal linked to the DFAT website known as Smartygrants, although paper-based submissions should also be allowed to ensure equity.

Where it is likely that a particular program may be oversubscribed, it may be advantageous to instigate a two-stage application process, where initially applicants submit an expression of interest, which are assessed against eligibility criteria. Those considered eligible and likely to meet the program objectives are invited to submit an application.  

Consistent with CCGs emphasis on probity and transparency, information provided to applicants should outline who will make recommendations and decisions at each stage of this process.

Commonwealth agencies must not use criteria in grant application and selection processes or clauses in grant agreements that seek to limit, prevent or ban not-for-profit organisations from advocating on policy issues.

5.3.2 Assessing applications

Grants applications (except for one-off grants) should be assessed against each of the program’s eligibility and weighted assessment criteria as published on the Department’s web site.
Program managers are encouraged to seek input from the relevant DFAT overseas mission, prior to consideration by the board or assessment committee.

The IRGP grants assessment template [XLS 351 KB] using formal score rankings may be used.  Rankings or groupings of applicants are necessary where there are more eligible applicants than funds available.  Delegates responsible for approving grants should ensure that all decisions are appropriately documented to withstand external scrutiny, including for unsuccessful applicants.

There should be a clear separation of duties between the assessment of applications and the approval of grants.

5.3.3 Approving Applications

The Secretary has delegated the authority for approving grant applications to SES officers, usually the FAS/AS of the relevant division.  SES may authorise another person to approve grant proposals under Regulation 9 and to enter into a grant arrangement under FMA Act S44.  This authority is provided via the relevant division’s delegations relating to the IRGP departmental cost centre and/or administered internal order 

IRGP-related spending proposals should only be approved by the relevant financial delegate, on the recommendation of the appropriate board or equivalent, and only if it can be clearly demonstrated that the proposed activities are consistent with the objectives of the grants program. 

The Minister should approve a grant where the Minister or the government has decided the grant should be provided or where it is politically sensitive (see below for further requirements where the Minister is to approve grants);

Any spending of public money is governed by the FMA Act and Regulations to ensure the proper use of Commonwealth resources.  These are spelled out below.  Further information about approving spending proposals is outlined in the Financial Management Manual, Chapter 8. 

5.3.3.1 FMA Regulation 8

A person must not enter into a grant agreement unless a spending proposal has been approved under FMA Regulation 9 and, if required, Regulation 10.

5.3.3.2 FMA Regulation 9

FMA Regulation 9 requires an approver to be satisfied, after making reasonable inquiries, that the spending proposal would represent efficient, economic, effective, and ethical use of Commonwealth resources in the context of departmental and government policy, and guidelines. 
Inter alia, Departmental and Government guidelines include the reference documents listed under Grants Administration in Section 2 of this document. 
FMA Regulation 9 delegates may only approve spending proposals up to the total budget that has been allocated to cost centres/internal orders that they have a delegation for. 

5.3.3.3 FMA Regulation 12

Grant approvers must record the terms and the basis of their approval in writing:

Relevant supporting documentation should be provided to the approver to assist in the decision making process.

A minute and attached list of applications with the board/selection committee’s assessment against eligibility and selection criteria is the minimum documentation required.  Reasons for pursuing a non-merit based selection processes must be documented in advance.  An IRGP grants approval – sample request minute [DOC 58 KB] and the IRGP Grants assessment template [XLS 351 KB] are attached.  Where an application meets the definition of procurement, rather than a grant, the standard FMA Regulation 9 approval – sample request minute attached to the Financial Management Manual should be used.

An approval of a spending proposal must be given in writing prior to the commitment to spend, but if this was not possible the approver must record their approval in writing as soon as practicable after giving approval.

5.3.3.4 FMA Regulation 10

Most IRGP grants allocate funding in the financial year they are approved.  However, it is possible to allocate funds to a grant where a commitment is made to pay amounts in one or more future financial years, which are known as multi-year grants.  Before a multi-year grant can be approved, the future year commitment must be approved by a FMA Regulation 10 delegate (SES Officer). (The SES delegate cannot authorise another person to exercise their Regulation 10 delegation).  Work areas should be mindful that IRGP allocations are decided on an annual basis and any changes may have implications for multi-year grants.

The work area should seek advice from FSB if a grant recipient wants to include a contingent liability in the grant agreement.

5.3.4 GST and Withholding Tax

The GST status of the grant must be determined before the grant agreement is entered into.
The grant recipient is responsible for determining their GST obligations. Where a recipient is unsure they should be advised to seek professional advice.
By way of general guidance, Goods and Services Tax (GST) is payable on IRGP grants where:

The grant agreement must clearly state the amount to be paid and whether GST is included:

A grant should be paid on the basis of a correctly rendered invoice.  If GST is payable, then the grant recipient should provide a tax invoice to the Department.  The total amount on the invoice should match the total amount specified in the grant agreement. Where a tax invoice has been provided the Department can claim the GST paid from the Australian Taxation Office. 

An example of when GST is payable is below:

If the grant recipient does not have an Australian Business Number (ABN) the recipient should provide a completed Statement by a Supplier [PDF] form.  Where this form is not provided, the Department must withhold 46.5% of the grant and remit the amount to the Australia Taxation Office.

Grant recipients without an ABN are also not entitled to claim GST and the grant amount in the grant agreement should be stated as “not subject to GST”.

5.3.5 Overseas Payments

Grants payments to overseas recipients should be made directly to the recipient from Canberra unless the post is involved in the administration of the grant.  Where the post is involved in the administration of the grant, a request may be made for post to make payment using the SAP inter-post (IPOST) facility or the global banker in accordance with SAP instructions. The sending location is to provide documentation on request to the receiving location.  

Note that the spot exchange rates, sourced from the Departmental intranet exchange rate database, and not the Budget Exchange Rate (BER), should be used for the payment and acquittal of grants made from administered funds in foreign currency.  (Note the BER is for budget purposes for departmental funds only and the spot rate must always be used for calculating approved grants or procurement.)

5.3.6 Minister as FMA Regulation 9 Approver

Where a Minister exercises the role of a financial approver in relation to a grant, they must be satisfied that the grant would be a proper use of Commonwealth resources.

Staff members must ensure that the Minister is provided with written advice on the proposed grant before the Minister makes a decision. Advice on the proposed grant must, at a minimum:

Note: A checklist for briefing ministers on proposed grants is provided at Attachment C of Finance Circular 2013/02: ‘Australian Government Grants: Briefing and Reporting’.

5.3.6.1 Reporting grants approved by the Minister to be spent in the Minister’s electorate

Each time a Minister approves a grant in respect to his or her own electorate, the work area that advised the Minister on the merits of the grant must draft a letter to the Finance Minister for the Minister’s signature and provide a copy to FPT-FSB.
Note: A sample letter to the Finance Minister is provided at Attachment D of Finance Circular 2013/02: ‘Australian Government Grants: Briefing and Reporting’.
This requirement does not apply to Senators or to Members where grants are awarded Australia, state or region-wide on the basis of a formula, and any of those grants fall in the relevant Minister’s electorate.

5.3.6.2 Annual report of grants approved by the Minister against agency advice

The Minister must report annually (by 31 March for the preceding calendar year) to the Finance Minister on whether they have approved any grants which DFAT recommended be rejected and, if so, outline the basis of the approval for each grant.

Where the Minister is required to report a grant approved against DFAT’s advice the work area must provide details of the grant (e.g. a copy of the Ministerial Submission) to FPT-FSB promptly after the Minister’s decision.

FPT-FSB must draft the Minister’s annual report, including a ‘nil’ report, to the Finance Minister by 31 March.

Note: A sample report to the Finance Minister is provided at Attachment E of Finance Circular 2013/02: ‘Australian Government Grants: Briefing and Reporting’.

5.4 Managing Grant Agreements

All IRGP grants must be formalised through a signed grant agreement, and will help establish the basis for effective working relationships between the grant recipient and granting agency, and a shared understanding of objectives and expectations.  A sample grant agreement should be available for applicants when advertising a grants round.

The agreement is also an important tool in managing the risks associated with a grants program.  Risks include: fraud; breaches of privacy or security; grant activities being inconsistent with Government policies; grant funding used contrary to the terms and conditions of the grant; and the possibility that an organisation may receive more than one grant for the same activity from the Commonwealth (‘double dipping’) and cost shifting (where a grant would have gone ahead without Departmental funding).

Under the principle of proportionality, IRGP delegates must conduct a risk assessment, on each grant based on the scale, nature, complexity of the proposed activity.  The S44 delegate who will sign the funding agreement should be provided with a copy of the risk assessment, which may be made using the attached Risk Assessment Template [XLS 30 KB], which considers the value, scope, previous history, previous financial statements, governance structure and legislative compliance, or with other justification.

Lower value grants involving simple activities have lower levels of risks.  Accordingly a simple grant agreement is recommended.  A more complex grant agreement should be used for those grants assessed as being higher risk (i.e. higher dollar value of grant funding, complex grant activity, etc).  

Grant agreement templates for simple and complex grants are available on the Intranet. GCL-DLB must be consulted if significant changes to the standard agreement are proposed or if intellectual property rights are likely to be an issue for consideration in the grant agreement.  The AICC grant agreement is also available on the Intranet and may be used.

Where the grant approver considers that the grant is so straightforward that the simple agreement is unnecessary the agreement can be in the form of a letter that includes the following minimum information:

Such agreements may be novated if the funding recipient changes their place of employment.  (See the attached Sample Deed of Novation [DOC 76 KB]). 

The grant agreement must be consistent with the terms of the approval, including any conditions on the approval.

The grant agreement is an important tool in evaluating whether the grant has met its objectives. Performance information should be included in the grant agreement.  A sample list of key performance indicators is attached. 

Non-financial variations to existing grants are not considered to be new grants.  Such variations must be properly documented;

Agency staff must identify whether a grant agreement contains confidentiality provisions and this must be reported on the Department’s website.

5.5 Paying a grant

A grant must not be paid unless there is a signed grant agreement in place and the recipient has submitted a valid tax invoice.

A grant must only be paid to the organisation or individual who has been awarded the grant (with whom the grant agreement has been made).

5.6 Publishing IRGP grants on the DFAT website

All IRGP grants must be published on the DFAT website within fourteen calendar days of the grant agreement being signed.  Where the grant has been awarded to an arts administrator, the artist/artistic group should also be noted. FSB maintains a web reporting Excel template [XLS 54 KB] that all grants must be entered into.  Once complete, the excel template should be sent to the Financial Management inbox, to provide consolidated grants information to the webmaster.  Confidentiality provisions must be reported on the Department’s website. 

5.7 Acquittal

IRGP managers are responsible for ensuring that grant funding is properly and fully acquitted/certified in a timely manner and that the outcomes of the project are evaluated. 

Staff members must not request information that is provided to the ACNC by an organisation regulated by them.  Staff members should consider using the National Standard Chart of Accounts (SCOA) when requesting information from not-for-profit organisations.  The SCOA data dictionary is included as an attachment to Finance Circular 2011/03 ‘National Standard Chart of Accounts for reporting by not-for-profit organisations’. Use of the SCOA should not be made mandatory for NFP organisations.

Where a grant has been assessed as low risk using the risk assessment template indicated in Section 5.4.1 above, a financial acquittal should not be required.  As indicated in the simple grant agreement template, a certification that funds were used for the agreed purpose, that records will be retained and that unspent funds have been returned, is required – such as that in the simple grant agreement.

Where a financial acquittal is required, lower value grants can be certified by an official from the organisation that received the grant.  Riskier, high value grants should be certified by a qualified auditor.  As a general rule, all grants of $50,000 or more should be certified by a qualified auditor.  The cost of certification can be included in the grant funding provided. 

Certification or acquittal (as relevant) should be required within 60 days of completing the grant.

Where the recipient needs to repay grant money the work area must issue an invoice promptly and manage the debt in accordance with FMM Chapter 11 Debt Management.

Multiyear grants should be subject to a partial acquittal at the end of each financial year as part of milestone reporting processes.  As part of the acquittal process, grant recipients need to indicate how the money spent can be linked back to the activities for which funding was originally requested (example acquittal template [DOC 315 KB]). 

Unspent funds should be returned to the Department no later than March each year to enable reallocation and spending to occur well before the end of the financial year.

Both the simple and complex template grant agreements contain clauses requiring funding recipients to keep all receipts and records for five years and to make these available upon request. 

5.8 Evaluation

As part of the acquittal process, grant recipients should be required to make an evaluation of their performance, whether KPIs were met and whether the grant contributed to the program objectives.  Relevant DFAT overseas missions should evaluate grants that pertain to their posts, specifically whether the grant contributed to one of the objectives of the grant program.  Secretariats must ensure that performance information is collated and that grants are evaluated against program objectives.   

5.9 Reporting

Key grant reporting for DFAT includes:

5.10 Annual Evaluation Review

EXB coordinates an annual evaluation review of the International Relations Grants Program and programs funded under the IRGP each year based on activity reporting provided by Divisions.  The annual review allows the Departmental Executive to assess overall effectiveness of the IRGP, as well as to inform funding allocations for the forward year.  Outcomes of the review are reported to Ministers for information. 

6 Roles and Responsibilities

6.1 Overview

FCIs managed by external boards form part of the Department and are not considered to constitute separate legal entities.  All IRGP programs are required to comply with the requirements of the Financial Management and Accountability Act, 1997(FMA Act), Finance Regulations and Orders, the Finance Management Manual, the Commonwealth Grants Guidelines and other Departmental instructions. 

6.2 Responsibilities

6.2.1 Executive Planning and Evaluation Branch

Executive Planning and Evaluation Branch (EXB) is responsible for the following:

6.2.2 Financial Services and Performance Branch

Financial Services and Performance Branch (FSB) is responsible for the following:

6.2.3 Divisions

Divisions are responsible for the operation and management of IRGP grant programs, including:

6.2.4 Posts

Posts are responsible for providing input into whether proposed activities in the countries of their accreditation are appealing, appropriate and acceptable to local audiences and/or participants, as well as whether the proposed activities would meet the policy objectives of the program.  Post comments will be provided to boards and approvers to inform their decision making.

Posts are responsible for providing performance feedback on the success of activities in their countries of accreditation, to secretariats.

Posts play a key role in maintaining relationships where the aims of programs include building of institutional and people to people links, such as maintaining contact with scholarship alumni.

6.2.5 Boards

The specific functions and responsibilities of each board are laid out in the relevant Order-In-Council or Administrative Circulars.  In general, boards may be responsible for the following:

The Commonwealth Grant Guidelines (Second Edition) clarify that as board members directly inform a decision about expenditure, they should be treated as agency staff for the purposes of the CGGs.

6.2.6 Ex Officio Members

The Secretary or his/her representative should be a permanent ex officio member on the board of all FCIs and may be represented on the board of other bodies as required.  Charters should be updated to reflect this where required.  The ex officio member, or their representative where they are unable to attend, must have full voting rights on the board and be responsible for the following:

7 Board Management

7.1 Charters – Order-in-Council or Administrative Circular

All boards must have some form of Charter which sets out the basis for their establishment and operation.  These Charters are formalised either under the Order-in-Council or the Departmental administrative circular establishing the Foundation/Council/Institute. 

This document may specify such matters as:

FCIs may wish to expand their existing Order-in-Council or Administrative Circular to incorporate some or all of the above issues rather than producing a separate Charter.  The Charter and/or Order-in-Council should be reviewed at least every five years and preferably every three years.  Ideally this would occur at the expiry of the term of appointment of the chairperson.  The relevant division is responsible for coordinating this review in close consultation with EXB.  Changes to the document must be approved by the relevant issuing authority, e.g., the Governor-General or the Minister for Foreign Affairs or the ex officio member. 

7.2 Appointment of Board Members

7.2.1 Board terms and number of Board members

The standard term of appointment for board members (with the exception of ex officio members) is part-time for three years, with one option to extend for a second part-time term of three years.  Appointments should not extend beyond six years, unless agreed by the appointing authority.  This ensures boards maintain diverse and dynamic cultures which are open to new ideas and is consistent with better practice governance practices.

Boards should consist of no fewer than four members and no more than eight members, including the Chairperson or the ex officio member, which should be reflected in each Charter.  If a board member’s term expires, or the member leaves the FCI either at the Minister’s request or at his/her own volition, the replacement of the member will be at the discretion of the Minister on the recommendation of the Department, subject to the relevant Charter.

7.2.2 Selecting new potential Board members

Secretariat staff are responsible for canvassing potential board members, consulting with the ex officio member, the Secretary and relevant agencies and Departments as well as other areas within the Department on the proposed appointment, and completing all the necessary paperwork for the nomination, approval and announcement of board members.

Sufficient time should be allowed for the process of identifying and selecting appropriate board members.  Possible candidates may come from diverse backgrounds including academia, business, government, the arts, medicine, law or other areas and should be recognised professionals in their area of expertise with the appropriate experience and qualifications required to fulfil the duties of the position. 

Due regard should be given to encouraging the nomination of individuals drawn from a broad cross section of Australian states.  Membership decisions should also accord with the department’s Board Target Gender Balance Plan (attached), which outlines the processes, initiatives and strategies in place to ensure the Government’s target of 40 per cent women on Australian Government boards is maintained.  The Global Ambassador for Women and Girls should be consulted early in the selection process to ensure gender balance throughout board nominations

The initial list of nominations for board members should be forwarded as part of a ministerial submission from the relevant division, after consultation with the secretary through the relevant ex officio member, and/or relevant Deputy Secretary, to the Minister for Foreign Affairs (and the Minister for Trade where applicable).

Once the Minister(s) has/have indicated nomination preferences, the next steps vary depending on where approving and appointment authority lies.  This will be noted in the respective Charter as either the Governor General/ Executive Council (EXCO), Prime Minister/Cabinet or the Minister for Foreign Affairs. 

The relevant processes are summarised in a Board appointments flowchart.  Relevant documentation should be prepared in accordance with Department of Prime Minister and Cabinet guidelines [PDF], if and as required by the IRGP program’s Charter / Order in Council.

Once a board appointment has been confirmed, the AusGov Boards website must be updated to reflect the current members of the board.  Data from the AusGovBoards website is collected for reports for Office of Women, Minchin Motion and Senate Order No. 13.  Information on the Department’s website should also be updated.  Corporate Planning Section, EXB is responsible for coordinating DFAT’s reporting on Australian Government Boards and should be contacted regarding any queries on requirements for reporting on boards.

7.2.3 Ex-officio Members

The Secretary, or his/her representative, should be a permanent ex-officio member on the board of each FCI.  Departmental officers may also be present at board meetings for the AICC and the ANC to UNESCO if required, although not necessarily in an ex officio role. The term of representation for an ex officio member will vary according to the terms of the Charter constituting the organisation.  The Department should be represented at all advisory board or committee meetings at an appropriate (SES) level.

7.3 Board Meetings

7.3.1 Frequency of Board Meetings

Boards should meet as necessary for the performance of their functions and in accordance with the relevant Charter, but ordinarily not less than one and not more than four board meetings should be held each year.  At least one board meeting, and not more than three board meetings, should be held with board members physically present.  Additional meetings may be conducted by video or telephone conference as required.  Board meetings should normally be held in Australia in the most cost-effective location, taking into account the costs of venue hire, accommodation and travel expenses. 

7.3.2 Meeting Procedures

Where not specified in the Charter of the FCI or other institution, boards should agree to basic meeting procedures for the conduct of the meetings, quorum requirements, agenda, papers, business arising, voting procedures, powers of the chair, outcomes and minutes.  These procedures should be documented, retained in the secretariat and reviewed on a regular basis every three to five years.  These procedures may be appended to the Charter of the FCI or other body and may include a sample certificate of attendance [DOC 52 KB], for Board remuneration purposes.  

7.3.3 Out of Session Decisions

FCIs and other bodies managed by external boards may make “out-of-session” decisions on routine matters as required which may or may not involve all board members in accordance with their Charter or agreed procedures.  Out-of-session decisions on routine matters should be appropriately documented and filed in the secretariat.  Where appropriate, these decisions should be advised to remaining board members either via email or at the next board meeting. 

The Chairperson may at his/her discretion declare an “out-of-session” issue to be a major issue and request input and a decision from all board members.  In these situations, the secretariat must contact each board member by email or phone to provide them with background information and to advise them of the requirement to provide input and/or lodge a vote.  Every effort should be made to ensure all board members are aware of the requirement for an out-of-session vote.  Votes should be lodged with the Secretariat by the nominated deadline.  Board members should be given at least 48 hours notice to lodge their vote.

7.4 Conflicts of Interest

Situations may arise in which the impartiality of a board member in discharging his/her duties could be called into question because of the potential, perceived or actual, influence of personal considerations, financial or other.  The conflict in question is between the board member’s official duties and obligations on the one hand, and private interests on the other. 

7.4.1 Declaring a Conflict of Interest

As part of the appointment process, board members must sign a Private Interests Declaration (PID) [DOC 37 KB] in which the nominee declares any potential conflict of interest which may arise as a result of his/her appointment.  These should be updated annually.  Copies of these declarations should be kept in the secretariat.

If, during the course of performing board member duties, a sitting board member believes he or she is likely to have a conflict of interest with regard to any issue, the board member should declare the potential conflict of interest at the commencement of the relevant board meeting when the board is considering the agenda for the meeting.  Conflict of interest should be a regular item on the meeting agenda.  The board member should:

  1. disclose the existence and the nature of the interest;
  2. provide details of the interest as requested by other board members to determine the nature and extent of the interest; and,
  3. in the case of a material personal interest (defined in 7.4.3 below), leave the meeting while other board members discuss the appropriate level of participation by that board member in the consideration of the matter.

If a material personal interest is established in a matter for consideration, the board member must not be present during the board’s consideration or decision.  However, prior to their departure from the meeting the board may invite them to provide input based on their expertise and answer questions on the issues from other board members.

A board member who discloses a non-material interest may participate fully in the consideration of the relevant item.  The board member may choose to be absent or not participate in the consideration or decision on the item.

A board member may make a declaration at any time if a matter comes to his or her attention and the board member has not already made an appropriate declaration.  A board member may also give a standing notice of an interest.  This will remain current until a new board member joins the board or the nature of the interest changes in any material way.

The Chairperson is responsible for ensuring the appropriate participation of board members during board meetings.  The Chairperson, in consultation with the ex officio member, is responsible for determining whether a declared interest is material or not.  Where the Chairperson has declared a material or non-material interest, the ex officio member, in consultation with the other board members, is responsible for determining whether the interest is material or not.

7.4.2 Conflict with Government Policy

If a board decision appears to be in conflict with Government policy or is against the principles and practices associated with sound public administration, the ex officio or other Departmental observer in attendance should, in the first instance, seek to resolve the apparent conflict through discussion and consultation with the Chair and/or the board.  Failing this, and depending on the seriousness of the situation, he or she may:

  1. immediately bring the matter to the attention of the board;
  2. request that his or her concerns are recorded in the Minutes of the meeting;
  3. request that a formal vote be taken on the issue;
  4. ask the Chair to inform the Minister of the board’s intended action; and
  5. inform the Chair that he or she intends to inform the Minister of the board’s decision (in a situation where the Chair refuses to inform the Minister).

7.4.3 Types of Interest

A material personal interest is an interest or duty that is significant enough to divide the board member’s loyalties.  This would include an interest in, or duty to, another entity that interferes with the board member’s ability to bring independent judgement to bear, or where there would be reasonable perception of such a conflicting interest.  Material personal interest includes direct pecuniary interests where the board member or his/her immediate family, family trust or business partner’s business interests are affected.  It also includes material non-pecuniary interests, for example, when a board member is an office-holder or employee of an industry association representing members whose interests are directly affected.

A non-material interest is an interest where a person, company or organisation with which the board member has an affiliation is affected by an item, either non-financially or financially.  The board may classify such interests as non-material.  In so classifying, the board will satisfy itself that the point of benefit is far removed from a matter and does not disqualify the board member from participation in the consideration of that matter.

All declarations of interest and the consideration of these by the board should be recorded in the Minutes of the meeting.

7.5 Remuneration

With the exception of ex officio members, board members will be paid fees in accordance with the rates, if any, specified in the Charter relevant to their board.  FCI board member remuneration is usually set at the rates, and subject to the conditions, determined from time to time under the Remuneration Tribunal Act 1973 for part-time holders of public office.

The standard of remuneration for FCI board members is:

  1. the “Category 2” daily fee exclusively undertaken for board business, including attendance at board meetings;
  2. “Tier 2” travelling allowance for attending board business; and,
  3. reimbursement of reasonable expenses incurred on board business as approved by the relevant financial delegate of the managing division. 

The chairperson is required to certify the payment of all fees and allowances to board members prior to approval by the appropriate financial delegate. Sitting fees are taxable (subject to PAYG taxation requirements) and must only be paid to the board member, not to his or her employer or associated company.

7.5.1 Remuneration for Ex Officio Members

Ex officio members are not paid fees for conducting board business, including attendance at board meetings.  Ex officio members are paid allowances in accordance with DFAT policies.

7.6 Board Travel

Board members are not expected to gain or lose financially as a result of travelling on official business.  Board members must only incur or commit the Commonwealth to meet expenses following the express approval by the Departmental delegate where funds are lawfully available to do so.  Travel may only be undertaken where its purpose is consistent with the duties of the board member. 

7.6.1 Travel Policies

The standard of accommodation and travel provided to board members should normally be at the “Tier 2” level for official travel in accordance with the rates, and subject to the conditions, determined from time to time under the Remuneration Tribunal Act 1973 for part-time holders of public office.  Board members may forego allowances and/or accept a lower standard of accommodation and travel in order to minimise costs to the FCI if they wish.  Ex officio members will be paid allowances and provided with travel and accommodation in accordance with DFAT’s travel policies.  Domestic and international travel expenses for ex officio members at the Deputy Secretary level will be met by EXB.

FCI secretariat staff should normally make all flight and accommodation bookings for FCI-related travel for board and secretariat members except ex officio members.  Bookings for Departmental ex officio members at the Deputy Secretary level will be made separately by their personal assistants.  If FCI and other board members book their own travel and accommodation (e.g., because they are able to obtain better rates), the appropriate delegate in the managing division may approve the reimbursement of travel costs to the travelling board member.  Taxi fares should be either reimbursed or e-tickets provided (non ex officio Board members are not entitled to Cabcharge cards).  The decision to reimburse privately-booked travel must be fully documented and approval must be obtained prior to the booking of the proposed travel.  Subsequent reimbursement of approved travel costs may be made on completion of the travel subject to the presentation of receipts and boarding passes, and the amounts claimed being consistent with those approved prior to the travel. Secretariat staff should request board members to comply with the “Best Fare of the Day” principle when booking travel privately and raise any cases of obvious non-compliance with the board member concerned and/or the Chair. 

7.6.2 International Travel

From time to time board members may travel to their relevant country for FCI-related activity such as developing and maintaining high-level relationships and informing themselves about FCI projects.  Overseas based Board members may travel to Australia to attend key Board meetings in person. 

The relevant supervising post should be consulted about the policy objectives and timing of any overseas visit in support of the IRGP program, before any travel program is arranged.

International bookings must be approved by an appropriate DFAT delegate prior to travel.  International travel costs must fit within the 10% annual administrative limit (see 5.2.2).

7.6.3 Conduct of Private Business

If a board member is travelling with the initial and primary purpose of conducting official FCI-related business and wishes to engage in private business during the trip, the board member should declare this prior to the commencement of the travel.  Depending on the extent and nature of the private business, it may be appropriate for the board member to contribute to the costs of travel and accommodation and to relinquish any claim to remuneration and allowances for the period during which he/she is engaged in private business.  The appropriate cost-sharing arrangement should be discussed and agreed with the secretariat in consultation with the chairperson and approved by the appropriate financial delegate prior to the commencement of travel.

If a board member is travelling for the initial and primary purpose of conducting private business at his/her own expense and agrees to engage in official business during the trip, the board member may be entitled to seek remuneration and allowances for the period of official business.  The intention to seek remuneration and allowances should be declared and agreed with the secretariat in consultation with the chairperson and approved by the appropriate financial delegate prior to the commencement of travel.  The board member should make his/her own bookings and would not normally be entitled to claim for travel and accommodation costs in this situation unless the period of official business is considered significant.

7.6.4 Travel Insurance

Board members travelling on official business are provided with travel insurance in accordance with the Department’s travel policies for short-term missions for all FCI related travel only.  For further information please refer to Comcover references on the Departmental intranet or contact Procurement and Contracts Governance Section.

7.6.5 Passports

Board members travelling overseas should normally travel on ordinary passports.  If the board member considers that an official passport is essential to carrying out the Government’s business overseas he/she should discuss this with the FAS or AS of the managing division.  If the FAS/AS agrees that an official passport is required, the secretariat must submit to the Assistant Secretary, Passport Client Services Branch (AS PCB) DFAT, a well-argued case seeking special approval and explaining why the presentation of an official letter setting out the purpose of the travel would not achieve the same objective.  This must be done before the application is lodged.  If approval is given, a copy of the advice approving the issue of the passport must be submitted with the application.  Diplomatic passport applications will only be considered in exceptional circumstances. 

7.6.6 Travel Advice

Board members should be made familiar with the relevant Departmental travel advice before proceeding on any board-related travel overseas.  The Department’s policies on travel with consular implications and staff safety while on overseas travel will apply to all official travel by board members.  FCIs may wish to consider obtaining a travel waiver [DOC 75 KB] from board members planning to travel to countries where DFAT has advised travellers “to reconsider the need to travel” or “not to travel” in the travel advisory. 

7.7 Board Review

In accordance with ANAO better practice guidelines, boards should undertake an annual review of their own performance.  Where feasible, every three years this review should be conducted by an external body in accordance with ANAO better practice guidelines.  The following areas should be included in the assessment:

The board may decide an appropriate review method which may include:

It is important that the findings of the reviews of governance arrangements and of board performance are acted upon within a reasonable time frame.  The results of the board self-assessments should be forwarded to the relevant FAS of the managing division, and AS EXB for information.  The results of the external assessments may be the subject of ANAO review. 

8. IRGP Timeline

An indicative IRGP reporting timeline is as follows:

Sep – Any significant funding increase brought forward through an NPP at MYEFO, cleared through EXB and CFO

Jan/Feb – Board self-assessment review.  

March – Divisions to submit BAR bids seeking increased Departmental allocation for coming financial year if required.

March – IRGP managers submit current year Annual Reviews to EXB.

April/May – Recommendations for Administered and Departmental funding allocations for coming financial year to Departmental Executive.

May /June - IRGP managers advised of approved funding allocations.
Annual review of grant program activities presented to Minister(s) for information.

July - Contribution to the DFAT Annual Report.

9. Attachments

10. Frequently asked questions

What happens when the ex-officio member of the board is unable to attend a board meeting?
Another departmental representative at an appropriate level (SES) should attend.
Can a permanent resident be appointed to the board of a FCI?
Yes.
How do I get access to Smartygrants, the M-FCI email group and Sharepoint?
Contact EAS in EXB.
Is there a mid-term budget allocation process?
No.  The full IRGP budget envelope is allocated to programs at the start of the financial year.  If a FCI is going to underspend, they will inform Evaluation and Audit Section in EXB, and in consultation with the CFO, that funding may be reallocated within the IRGP.
How can we get more funding?
Through standard departmental funding processes eg. BAR and contingency funds.
What information needs to be kept on file for grant applications that have not been successful?
A full assessment, against eligibility and assessment criteria needs to be recorded, in accordance with the information advertised in the grants round.
How often should the FCI’s charter be updated?
According to the IRGP policies and procedures, the charter should be updated at least every five years, and at a minimum every three years on the expiry of the chair’s appointment.