Machinery of Government (MoG) changes: A guide
Movement of corporate functions and shared services
Agencies deliver their corporate services through different operating models. Negotiating an agreement for the transfer of corporate staff, assets and appropriation can be complex.
The underlying focus is to achieve the most efficient and effective whole-of-government outcomes in support of the Government's objectives.
1. Agencies are expected to implement change in a way that is consistent with the principles outlined in the Executive Summary.
- The movement of corporate staff, assets and appropriations is for negotiation between affected agencies.
- For a straightforward MoG change where corporate delivery models are similar and costing methods are comparable, it may be appropriate for the transfer of corporate resources to be proportionate to the number of other staff moving from one agency to another.
- Where a MoG change affects multiple agencies, or where corporate services are delivered and/or costed in different ways, then identifying employees to transfer, and agreeing on the transfer of assets and funding is more complex.
- Generally, decisions on the transfer of corporate staff, assets and appropriations following a MoG change should allow agencies to continue to deliver their corporate services in accordance with their existing operating models.
Where a MoG change is complex
- Defining what make a MoG change complex is difficult. However, factors that would indicate that a MoG is complex include:
- the scale and value of the functions being transferred
- the transfer impacting multiple outcomes, programs and business functions
- the transfer being geographically diverse
- requirements for legislative change.
- If the MoG change is large, the New Policy Proposal—Standard Departmental Costing template (the template) should provide a guide for the transfer of corporate functions. In this instance affected agencies should develop a methodology to cost the corporate functions to transfer that reflects the likely cost of providing corporate functions to support transferred employees, without unduly impacting on the transferring agency.
- As MoG transfers should represent the cost of delivery, it may be inappropriate to use the template where this would result in a windfall gain to one agency from the transfer of corporate services.
- If there is no agreement to use the template, the funding transferred should be the total expenditure that the losing agency was going to commit to the function prior to the announcement of the MoG change.
Where a MoG change is small
- In the case of small MoG transfers, the template should be used as the default to calculate the corporate services funding to be transferred, if there is no agreement between by the affected agencies on an alternative model.
- Where one or more agencies involved in a MoG have shared services arrangements, transfer of ASL, assets and appropriations should be addressed through negotiations between the parties that give consideration to the delivery models of the agencies.
- For ASL transfers relating to shared services outside of a MoG, for example, an agency onboarding to a shared services provider hub, agencies can seek advice from the Shared Services Program team (scs [at] finance.gov.au).
- If a MoG requires that a change be made to a Memorandum of Understanding (MOU) covering shared services, the relevant agencies will promptly and cooperatively review and execute any consequent changes to, or termination of, the MOU.
- If there are outstanding shared services issues following the negotiations, agencies may wish to seek further advice from the Government Business Transformation Branch at Finance by emailing scs [at] finance.gov.au.