The hierarchy of the government structure underpins a parallel hierarchy of governance.

Government as the investor

Government has an overarching accountability for governance of the resource management of the State.  The government’s role includes:

·      setting policy priorities that drive resource investments;

·      understanding the context and drivers for those investments;

·      reviewing analysis of investment proposals – the value proposition and feasibility;

·      prioritising and funding investments; and

·      monitoring the effective procurement and benefit delivery from the portfolio of investments and resource allocation more broadly.

Figure 1 Overarching government governance role

The government is ultimately responsible for all public sector resource investments. Its governance role therefore spans all public sector activities including project delivery and investment benefit realisation, which is usually through ongoing services. Appropriate and timely project reporting is an important contribution to the government’s governance monitoring role (see Figure 1).

For government, risk management is an essential element of the governance task for effective delivery of benefits from investments. To this end an increased focus is being applied to high value/high risk (HVHR) investments.

Central agencies and HVHR projects

Central agencies support the government in their decision making and monitoring roles, coordinating the development of the budget, preparing policy guidance and accountability requirements, and monitoring resource expenditure and related investment risks.

The government has determined that a category of investments, high value/high risk investments, require greater scrutiny and support from central agencies. This enhanced rigour in investment development and oversight is designed to ensure major projects are delivered on time and on budget, with the agreed benefits.

HVHR projects ($100m plus and/or high risk) require Treasurer’s approval at key stages in the project lifecycle as set out in Table 1. Early identification of likely HVHR status will allow for early central agency involvement and mandatory Gateway reviews to be organised.

Stage	Action
Business Case Approval	Requirement for a preliminary business case at the early filtering stage.Treasurer’s approval of full business case: project deliverability (on time and on budget). The robustness is assessed by DTF for Treasurer’s approval.Only robust business cases can be submitted for funding consideration.
Project tendering	Treasurer’s approval of:·      all procurement documentation prior to release;·      preferred bid, prior to announcement; and·      contracts, prior to signing and any major variations.
Project implementation	Closer oversight by DTF of:·      time, scope and budget reporting and analysis;·      governance advice and monitoring;·      risk assessments and mitigation reviews; and·      any recommended interventions or remedial actions.

Table 1 HVHR governance requirements

The HVHR process requires more active central agency involvement in the project approval and delivery process and more rigorous monitoring of the project. This will generally involve participation in steering committees, reference groups and working parties as appropriate, determined on a risk assessed basis. While central agencies have responsibility for monitoring project performance, this does not replace departmental accountability for the investment and its outcomes.