Go to top of page

Machinery of Government changes: A guide

Planning and due dilligence

It is good practice for agencies to start planning as early as possible.

As soon as it becomes clear that a MoG change will occur, affected agencies are expected to:

  • consider the appointment of an independent third party to facilitate and advise on the process
  • establish a cross-agency steering committee to oversee implementation
  • prepare for an immediate and thorough due diligence exercise
  • develop a communications strategy to keep staff informed

The extent of these actions will depend on the size and complexity of the MoG change.

  1. Agencies are expected to implement change in a way that is consistent with the principles outlined in the Executive Summary.


  1. Responsibility for the following transfers to the gaining agency on the MoG date of effect:
    • special appropriations in legislation
    • special accounts to which section 80 of the PGPA Act refers
    • revenues and expenses, which are collected or incurred under specific legislation.
  2. Agencies should review their instruments of delegation and accountable authority instructions (AAIs) to ensure appropriate arrangements are in place. Where there is a delay between the date of a MoG decision and the date of transfer of agency staff and appropriations, interim delegations (under the PS Act, PGPA Act, etc.) and AAIs may need to be put in place.
  3. By the completion date, the following should have transferred to the gaining agency:
    • the delivery of functions
    • all staff associated with the function
    • annual appropriations under section 75 of the PGPA Act.

Independent advisor

  1. An independent advisor should be appointed by affected agencies to manage the MoG process in circumstances where
    • the MoG change is sensitive or complex
    • the MoG change involves the closure of an entity
    • the affected entities are having difficulty in resolving issues
  2. An independent advisor must be appointed in circumstances where milestones are not being met. Once a MoG change is announced, milestones will be set to ensure the completion date is achieved.
  3. The independent advisor’s role is to manage the process of information exchange between the losing and gaining agencies. This can involve:
    • managing a detailed examination of all aspects of the function being transferred, including assets and liabilities and statutory, contractual and other arrangements, to identify any issues which may need to be addressed—see also Due Diligence
    • assisting the losing and gaining agencies to resolve outstanding issues.
  4. If outstanding issues are unable to be resolved, the independent advisor is to determine and recommend a position on the matter for escalation to a committee chaired by the Secretary of PM&C and comprising the Secretary of Finance and the Commissioner—see also Dispute resolution process.
  5. Finance can provide affected agencies with advice around the appointment of independent advisors.
  6. Affected agencies should agree on an advisor and arrange their engagement.
  7. The costs of engaging the services of an independent advisor are expected to be shared equally between the affected agencies.

Steering Committee

  1. Good practice supports the creation of a steering committee to oversee implementation and where required, to support an independent advisor. Such a committee would operate with:
    • representatives from all affected agencies—managers from corporate or enabling services as well as programs
    • clear lines of responsibilities for individuals and groups
    • governance mechanisms and protocols for recording key decisions
    • regular reporting to the executives of all affected agencies.
  2. The steering committee may be assisted by smaller working groups

Due diligence

  1. Losing agencies are to provide gaining agencies with the following information as soon as possible:
    • information gathered from due diligence checks
    • timely and accurate information.
  2. Due diligence requires a detailed examination of all aspects of the function being transferred. Issues to be addressed include:
    • the statutory basis of programs and functions
    • the Australian Government Organisations Register, accessible to assist in identifying secondary and related bodies (committees, advisory and expert panels, boards, statutory branded functions etc.) that may be required to be moved
    • funding agreements, partnerships, joint ventures, taxation issues
    • delegations and authorities
    • assets and liabilities, intellectual property
    • records and information management
    • contractual arrangements for property, equipment and goods and services
    • transfer personal information in accordance with the Privacy Act 1988
    • outstanding legal action and freedom of information (FOI) requests
    • unfinished audits
    • resourcing allocated to the function including staffing, current and prior year annual appropriations, special appropriations and special accounts, own source revenue, current and forward year estimates and actuals for current year (and prior years as appropriate), program reviews in progress and pending program reviews.

Meeting milestones

  1. By four weeks after the date of the MoG decision, agency Chief Financial Officers (CFOs) must advise PM&C, Finance and the APSC of their progress towards meeting the completion date: including any key milestones, the status of negotiations and the existence of any contested issues.

Dispute resolution process

  1. If any matters in dispute cannot be resolved at the working level, agency heads and Secretaries of the respective portfolio departments are expected to reach a resolution.
  2. If at any stage it becomes clear that key milestones are not likely to be met, the affected agencies must:
    • advise PM&C, Finance and the APSC
    • appoint an independent advisor to assist in finalising negotiations and resolving contested issues. This process involves:
      • the affected agencies providing the independent advisor with information supporting their respective positions
      • the affected agencies meeting jointly with the independent advisor to discuss outstanding issues
      • the independent advisor working with the affected agencies to reach agreement.
  3. After conducting an analysis of the information provided by the affected agencies and potentially discussing contentious issues with representatives from the affected agencies, the independent advisor may support one of the positions or provide a third position for agreement.
  4. If appropriate, Finance and the APSC may be able to support the independent advisor to assist the affected agencies to resolve outstanding issues relating to financial matters and staffing matters respectively.
  5. If any matters remain unresolved and meeting the completion date looks in doubt, a recommended position by the independent advisor on the matter must be escalated to a committee chaired by the Secretary of PM&C and comprising the Secretary of Finance and the Commissioner for their consideration and final decision on the matter.
  6. The Secretary of PM&C (as Chair) will advise the relevant agency heads and/or portfolio Secretaries of the decision in writing.
  7. If necessary, Finance may transfer funds and the Commissioner may transfer staff without the agreement of agencies.
  8. Where agencies have not completed a MoG change by the set date, the Secretaries of the respective portfolio departments are to write to the Secretary of PM&C, the Secretary of Finance and the Commissioner to advise them of the reason(s) for this and advise of an expected completion date.

Communication strategy

  1. Section 47 of the Work Health and Safety Act 2011 requires that a business consults—so far as is reasonably practicable—with workers who are (or are likely to be) directly affected by health and safety matters.
  2. During a MoG change, agencies are encouraged to conduct ongoing communication and consultation with workers about their transition to new work arrangements. It is important to communicate with affected staff early in the process to explain:
    • why—the reasons and objectives for change
    • what—the impact of change
    • what next—the timetable for specific activity relating to the change
    • how—the mechanism for providing the input on the implementation.
  3. The steering committee may decide to appoint a Communications Manager in each affected agency.
Last reviewed: 
4 April 2019