Paul C.
Paul Christensen

Machinery of government (MoG) changes occur when the government restructures the functions that government departments administer. MoG changes usually result in the transfer of specific functions and legislative responsibilities from one department to another. This can include:

  • abolishing existing departments, with all functions transferred to other departments
  • creating new departments, who receive functions previously administered by other departments
  • changing the functions, outputs or resources that existing departments administer.

MoG changes arise through two processes:

  1. an administrative arrangements order, which the Governor in Council makes
  2. through departmental arrangements notices, which the Public Service Commission issues.

MoG changes following the state election

On 12 November 2020, the Governor in Council approved Administrative Arrangements Order (No. 2) 2020. Changes to departmental arrangements included:

  • abolishing two departments (the Department of Youth Justice and the Department of Aboriginal and Torres Strait Islander Partnerships)
  • creating one new department (the Department of Energy and Public Works)
  • redistributing functions between 14 existing departments, with seven of the departments renamed.

When do the MoG changes take effect?

Generally, MoG changes are effective from the date the administrative arrangements order is made. For accounting purposes, however, the effective date will depend on whether it involves an abolished department.

Where MoG changes involve an abolished department:

  • the abolished department is required to prepare final financial statements and a final annual report up to the date it is abolished
  • any transfers of functions are taken to have happened on the day after the department was abolished.

All other changes are taken to have happened on the first day of the following month, for accounting purposes (refer s.80 of the Financial Accountability Act 2009).

What are the impacts of MoGs?

The impact of MoGs can be wide-ranging and may require:

  • changes to organisational structures
  • transfers of employees
  • transfers of assets and liabilities
  • changes to information systems
  • changes to corporate policies and procedures.

Implementing MoG changes can also impact the quality and timeliness of financial statement preparation due to:

  • the movement of key finance staff between departments
  • changes required to financial systems
  • inability to access financial information in a timely manner.

We will discuss the accounting implications of MoG changes further in a later blog.

What should we consider in implementing a MoG change?

Given the extent of change that may be required, it can sometimes take many months, or even years, before the new functions are fully integrated into the operations of the receiving department.

For this reason, it is important that affected departments assess the size and nature of any MoG changes and consider the extent of change required. Both transferring and receiving departments will also need to agree on the scope of changes required—that is, identifying and defining the areas being transferred and what this involves. This will help them identify, manage, and monitor the associated risks at both an operational and strategic level.

Any major restructuring of departmental arrangements should be supported by a robust process including a formal plan with assigned responsibilities and lines of accountability. It also requires an appropriate level of involvement and commitment from senior management of both the receiving and transferring departments.

At an organisational level, departments will need to consider how MoG changes impact on existing governance and reporting structures. This may include:

  • reviewing corporate plans, policies, and performance measures
  • reviewing and updating financial and non-financial delegations
  • assessing the organisational structure and reviewing accountability arrangements.

Other operational considerations to be addressed include:

  • reviewing all existing contracts, leases and litigation and identifying where these now belong
  • managing the handover of records
  • considering and addressing the potential impact on staff
  • assessing outstanding internal and external audit issues, outstanding Crime and Corruption Commission matters and other matters being investigated.

In managing the changes, departments should also develop a clear and comprehensive communication strategy that addresses:

  • communicating expectations with key external stakeholders, including ministers
  • keeping staff informed of the process
  • communicating with clients and suppliers of relevant changes to operations
  • communicating with central agencies and the Queensland Audit Office (QAO).

Where can I seek further assistance?

To assist affected departments, QAO has developed a Checklist for managing machinery of government changes, which provides an overview of some of the most common and important issues that may arise in implementing MoG changes.

Other assistance available includes: