More effective governance arrangements

Good governance is the foundation for high performance and community confidence in the public sector.  Effective governance arrangements clearly articulate the nature and extent of authority of entities and how they will be held to account by ministers and Parliament.  They must be sufficiently flexible to allow the public sector to meet the needs of citizens in an efficient, effective and coordinated way and respond to changing circumstances.

The existing financial framework model classifies Commonwealth entities as falling under either the FMA Act or the CAC Act – with distinct governance, funding, reporting and accountability arrangements. While this framework has enabled new and different organisational models to deliver the complex business outputs of government, the solutions have not always been simple, and sometimes have involved complex workarounds. It has also contributed to some fragmentation of the public management system and a loss of systemic efficiency. There is growing tension about where the boundaries lie in the spectrum of policy, legal, financial and managerial autonomy across government entities.

Public policy issues are increasingly complex and require responses that stretch across boundaries (within government and across sectors). Consequently, traditional models for delivering public services, based on vertical and hierarchical governance and accountability, need to be complemented by participative and networked arrangements. This will help make the public sector more connected and agile and better placed to address complex problems in an uncertain environment. It is not clear that the framework has adequate incentives and flexibility to efficiently accommodate all this.

What do you see as the strengths and weaknesses of the current FMA Act/CAC Act split?