New governance rules make audit committees a priority for Commonwealth entities

Key Points:

Commonwealth entities should prepare for the 1 July 2015 deadline to appoint independent audit committee members.

The Public Governance, Performance and Accountability Act 2013 (PGPA Act) contains a number of significant changes in the governance of Commonwealth entities.

The accountable authority (secretary/board) of a Commonwealth entity must govern the entity in a way that promotes:

• the proper use and management of public resources for which it is responsible;
• the entity achieving its purposes; and
• the entity's financial sustainability.

To reinforce these new governance objectives Commonwealth entities (including both non-corporate and corporate Commonwealth entities) and wholly-owned Commonwealth companies must establish an audit committee from 1 July 2015 – and the majority of its members must be independent.