Untitled document

Financial Management (Financial Responsibility)

Act 2000

Act No. 9/2000

TABLE OF PROVISIONS

Section	Page
PART 1—PRELIMINARY	1

1.	Purpose	1
2.	Commencement	2

PART 2—FINANCIAL MANAGEMENT ACT 1994 3

3. New section 4 inserted 3

4. Act binds the Crown 3

4.	New Part 5 substituted	3
PART 5—FINANCIAL RESPONSIBILITY	3
Division 1—Introduction	3

23A.	Definitions	3
23B.	Application of Part	4

Division 2—Principles of Sound Financial Management	4
23C.	Government to operate in accordance with principles of
sound financial management 4
23D.	Principles of sound financial management 5

Division 3—Financial Policy Objectives and Strategies

Statements 6

23E.	Financial policy objectives and strategies statement	6
23F.	Purpose of statement	6
23G.	Content of statement	7

Division 4—Estimated Financial Statements and Budget

Update 8

23H.	Estimated financial statements	8
23I.	Purpose of estimated financial statements	8
23J.	Content of estimated financial statements	9
23K.	Accompanying statement	9
23L.	Budget update	11

i

Section Page

23M.	Purpose of budget update	11
23N.	Content of budget update	11

Division 5—Disclosure of Financial Results 12

24.	Annual financial report	12
25.	Mid-year report	15
26.	Quarterly financial report	15

Division 6—Pre-election Budget Update 16

27.	Pre-election budget update	16
27A.	Purpose of pre-election budget update	16
27B.	Contents of pre-election budget update	17
27C.	Release of pre-election budget update	18

Division 7—Release of Reports, Statements and Updates 18

27D.	General provision for release of documents	18
27E.	Release of estimated financial statements and budget
financial policy objectives and strategies statement	20
27F.	Release of documents when Parliament is not sitting	21

5. Consequential amendment of Financial Management Act 22

PART 3—AUDIT ACT 1994 23

6.	New Part 3A inserted	23
PART 3A—REVIEW OF ESTIMATED FINANCIAL
STATEMENTS	23

16B.	Review and report to Parliament on estimated financial
statements 23

7.	Consequential amendment of Audit Act	25
8.	New section 27 inserted	25

27. Annual financial statement 25

═══════════════

NOTES 26

ii

Victoria

No. 9 of 2000

Financial Management (Financial

Responsibility) Act 2000†

[Assented to 18 April 2000]

The Parliament of Victoria enacts as follows:

PART 1—PRELIMINARY

1. Purpose

The purpose of this Act is to amend the Financial Management Act 1994 and the Audit Act 1994 to provide for the enhanced disclosure of financial and budget information by the Victorian Government and the review of estimated financial statements by the Auditor-General.

Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 2

2. Commencement

This Act comes into operation on the day after the day on which it receives the Royal Assent.

_______________
Financial Management (Financial Responsibility) Act 2000

s. 3 Act No. 9/2000

PART 2—FINANCIAL MANAGEMENT ACT 1994

No. 18/1994.	3. New section 4 inserted
Reprint No. 3
as at 25
March 1999.	After section 3 of the Financial Management
Further	Act 1994 insert—
amended by
No. 53/1999.	"4. Act binds the Crown

This Act binds the Crown not only in right of Victoria but also, so far as the legislative power of the Parliament permits, the Crown in all its other capacities.".

4. New Part 5 substituted

For Part 5 of the Financial Management Act

1994 substitute—

'PART 5—FINANCIAL RESPONSIBILITY

Division 1—Introduction

23A. Definitions

In this Part—
"budget" means the State budget;

"current financial policy objectives and

strategies statement"—

(a) financial statements for a financial
year, means the financial policy
objectives and strategies statement
prepared under section 23E in

in relation to the estimated that financial year;

(b) in relation to a budget update for a financial year, means the financial policy objectives and strategies

statement prepared under section

Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 4

23E in association with the budget

update;

(c) in relation to a pre-election budget update, means the financial policy objectives and strategies statement prepared under section 23E in

association with the most recent budget or budget update (as the case may be);

"Government" means the Government of the State of Victoria;

"quarter" of a financial year, means the

period of 3 months ending on
30 September, 31 December, 31 March
and 30 June in that year;

"Secretary" means Secretary to the Department of Treasury and Finance.

23B. Application of Part

This Part applies in respect of the financial year 2000/2001 and each subsequent financial year.

Division 2—Principles of Sound Financial

Management

23C. Government to operate in accordance with
principles of sound financial management

It is the intention of the Parliament that the Government establish and maintain a budgeting and reporting framework that is consistent with the principles of sound financial management so as to form a basis for the provision of sustainable social and economic services and infrastructure fairly to all Victorians.

Financial Management (Financial Responsibility) Act 2000

s. 4 Act No. 9/2000

23D. Principles of sound financial management

(1) The principles of sound financial

management are that the Government

must—

(a)

manage financial risks faced by the economic circumstances;

(b) pursue spending and taxing policies that are consistent with a reasonable degree of stability and predictability in

the level of the tax burden;

(c)	maintain the integrity of the Victorian tax system;
(d)	ensure that its policy decisions have regard to their financial effects on future generations;
(e)	disclosure of financial information

provide full, accurate and timely Government and its agencies.

(2) The financial risks referred to in sub-section (1)(a) include—

(a)	risks arising from the level of the State's general government sector debt;
(b)	commercial risks arising from ownership of public non-financial corporations and public financial corporations;
(c)	risks arising from changes in the structure of the Victorian tax base;
(d)	risks arising from management of assets and liabilities of the State.

Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 4

Division 3—Financial Policy Objectives and

Strategies Statements

23E. Financial policy objectives and strategies

statement

(1) The Minister must prepare two financial

policy objectives and strategies statements
for each financial year.

(2) The first financial policy objectives and

strategies statement for a financial year must
be—

(a)	prepared in association with the budget for that financial year;
(b)	laid before each House of the Parliament in accordance with section 27E.

(3) The second financial policy objectives and

strategies statement for a financial year must
be—

(a)	prepared in association with the budget update for that financial year;
(b)	laid before, or given to the clerk of, each House of the Parliament in accordance with section 27D.

23F. Purpose of statement

The purpose of a financial policy objectives and strategies statement is to make transparent the Government's financial strategies and to establish a benchmark for evaluating the Government's conduct of financial policy.

Financial Management (Financial Responsibility) Act 2000

s. 4 Act No. 9/2000

23G. Content of statement

(1) A financial policy objectives and strategies statement must—

(a) financial objectives within which

specify the Government's long-term which the budget or budget update relates and the following 3 financial years will be framed;

(b)	explain the broad strategic priorities on which the budget or budget update is based;
(c)	specify the key financial measures that the Government has identified as being important and against which financial

policy will be set and assessed;

(d) specify, for the financial year to which the budget or budget update relates and the following 3 financial years—

(i) the Government's short-term
financial objectives;

(ii)  the targets for each specified key financial measure;

(e)

explain how the financial objectives explained in paragraphs (a), (b) and (d) relate to the principles of sound financial management;

(f) specify any financial policy actions taken or to be taken by the Government that are temporary in nature, state the reasons for taking them and indicate the process for their revision;

Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 4

(g)

identify the reporting basis on which reports will be prepared;

(h) state the reasons for any changes from the previous financial policy objectives and strategies statement.

(2) A financial policy objectives and strategies

statement must be based on the principles of
sound financial management.

(3) If particular information required to be

included in a financial policy objectives and
strategies statement is unchanged from
information set out in full in an earlier
statement, the statement may instead
summarise the information and state that it is
unchanged from what was set out in the

earlier statement.

Division 4—Estimated Financial Statements

and Budget Update

23H. Estimated financial statements

(1) The Minister must prepare estimated

financial statements for each financial year
in association with the budget for that
financial year.

(2) Estimated financial statements must be laid

before each House of the Parliament in
accordance with section 27E.

23I. Purpose of estimated financial statements

The purpose of estimated financial statements is to set out the projected financial results for the Victorian budget sector calculated on the basis of the Government's stated financial policies and assumptions.

Financial Management (Financial Responsibility) Act 2000

s. 4 Act No. 9/2000

23J. Content of estimated financial statements

(1) Estimated financial statements comprise—

(a)	for the financial year in respect of which they are prepared and the following 3 financial years—
(i)	an estimated statement of financial performance of the Victorian budget sector for the year;
(ii)

an estimated statement of budget sector at the end of the year;

(iii)

an estimated statement of cash sector for the year;

(b) a statement of the accounting policies on which the statements required by paragraph (a) are based and explanatory notes.

(2) The information in the estimated financial

statements must take into account
Government decisions and other
circumstances that may have a material
effect on the estimated financial statements.

(3) Estimated financial statements must be based

on—

(a)	the current financial policy objectives and strategies statement;
(b)	generally accepted accounting principles.

23K. Accompanying statement
Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 4

(1) The Minister must prepare an accompanying

statement in association with each set of
estimated financial statements.

(2) An accompanying statement comprises—

(a) a statement of the material economic and other assumptions that have been used in preparing the estimated

financial statements;

(b) estimated financial statements to

a discussion of the sensitivity of the assumptions;

(c) expenditures for the financial years

an overview of the estimated tax statements;

(d) where feasible, that may have a

a statement of the risks, quantified financial statements, including—

(i) contingent liabilities;

(ii) publicly announced Government
commitments that are not yet
included in the estimated financial
statements.

(3) The information in an accompanying

statement must take into account Government decisions and other circumstances that may have a material

effect on the estimated financial statements. (4) An accompanying statement must be laid

before each House of the Parliament with the
estimated financial statements to which it
relates in accordance with section 27E.

Financial Management (Financial Responsibility) Act 2000

s. 4 Act No. 9/2000

23L. Budget update

(1) The Minister must prepare a budget update for each financial year.

(2) A budget update must be laid before, or given to the clerk of, each House of the Parliament in accordance with section 27D.

23M. Purpose of budget update

The purpose of a budget update is to provide updated information to allow the assessment of the Government's financial performance

against the financial policy objectives and
strategies set out in its current financial

policy objectives and strategies statement.

23N. Content of budget update

(1) A budget update comprises—

(a) updated estimated financial statements;

(b)

Victorian budget sector financial of October, although the Minister may instead include financial statements covering a longer period of the financial year if they are available.

(2) The updated estimated financial statements

must—

(a)

take into account Government decisions a material effect on them;

(b) state the date on which the updating was undertaken.

(3) A budget update must be based on—

Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 4

(a)	the current financial policy objectives and strategies statement;
(b)	generally accepted accounting principles.

(4) If particular information required to be

included in a budget update is unchanged
from information set out in full in the
estimated financial statements, the update
may instead summarise the information and
state that it is unchanged from what was set

out in the estimated financial statements.

Division 5—Disclosure of Financial Results

24. Annual financial report

(1) The Minister must prepare an annual

financial report for each financial year.

(2) The annual financial report—

(a)	must be prepared in the manner and form determined by the Minister;
(b)	must present fairly the financial position of the State and the Victorian budget sector at the end of the financial year and—

(i)  the transactions on the Public Account;

(ii)  the transactions of the Victorian budget sector;

(iii)  other financial transactions of the State—

in respect of the financial year;

(c)

must include details of amounts paid section 23;

Financial Management (Financial Responsibility) Act 2000

s. 4 Act No. 9/2000

(d)

must include details of amounts financial year under section 28;

(e)	must include details of money credited under section 29 to an item in a Schedule to an appropriation Act for that financial year;
(f)

must include particulars of amounts determinations under section 30 or 31;

(g) must include details of—

(i)  amounts appropriated in respect of the financial year as a result of a determination under section 32 in the preceding financial year;

(ii)

the application during the any such determination applies;

(h) must include—

(i)	details of expenses and obligations met from money advanced to the Minister under section 35(1) during the financial year;
(ii)	carrying forward any part of an

a statement of the reasons for financial year under section 35(4);

(i)  must include details of payments made during the financial year out of money advanced to the Treasurer in an annual appropriation Act for that year to meet urgent claims;

Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 4

(j) must include details of—

(i) payments made during the
financial year in fulfilment of any
guarantee by the Government
under any Act;

(ii)  money received or recovered by the Minister or Treasurer during the financial year in respect of any

guarantee payments;

(k) must include details, as at the end of the financial year, of—

(i) contingent liabilities under
guarantees and indemnities or in
respect of superannuation
payments and all other contingent

the liabilities (including and

(ii) prescribed assets and prescribed
liabilities of prescribed bodies;

(l)	may include any other information the Minister considers appropriate;
(m)	must be audited by the Auditor- General.

(3) The Minister must cause a copy of each annual financial report to be given to the Auditor-General on or before 20 September

next following the financial year to which it

relates.

(4) An audited annual financial report must be laid before, or given to the clerk of, each section 27D.

Financial Management (Financial Responsibility) Act 2000

s. 4 Act No. 9/2000

25. Mid-year report

(1) The Minister must prepare a mid-year report

for each financial year.

(2) The mid-year report—

(a)	must be prepared in the manner and form determined by the Minister;
(b)	position of the State and the Victorian budget sector at midnight on

must present fairly the financial and—

(i)  the transactions on the Public Account;

(ii)  the transactions of the Victorian budget sector;

(iii)  other financial transactions of the State—

in respect of the period of 6 months

ending on that day;

(c) may include any other information the Minister considers appropriate.

(3) A mid-year report must be laid before, or

given to the clerk of, each House of the

Parliament in accordance with section 27D.

26. Quarterly financial report

(1) The Minister must prepare a quarterly

financial report for each quarter of each

financial year.

(2) A quarterly financial report comprises—

Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 4

(a)	a statement of financial performance of the Victorian budget sector for the quarter;
(b)	a statement of financial position of the Victorian budget sector at the end of the quarter;
(c)	a statement of cash flows of the Victorian budget sector for the quarter;
(d)	a statement of the accounting policies on which the statements required by paragraphs (a), (b) and (c) are based;
(e)	any other information the Minister considers appropriate.

(3) The quarterly financial report for the quarter ending on 31 March in a financial year must include, in addition to the statements referred

to in sub-section (2)(a) to (d) for that quarter,
those statements for the period of 9 months
ending on that 31 March.

(4) A quarterly financial report must be laid

before, or given to the clerk of, each House
of the Parliament in accordance with
section 27D.

Division 6—Pre-election Budget Update

27.

Pre-election budget update members of the Legislative Assembly, the Secretary must prepare a pre-election budget update in accordance with this Division.

27A. Purpose of pre-election budget update

The purpose of a pre-election budget update is to provide updated information on the estimated financial statements.

Financial Management (Financial Responsibility) Act 2000

s. 4 Act No. 9/2000

27B. Contents of pre-election budget update

(1) A pre-election budget update comprises—

(a) updated estimated financial statements for the Victorian budget sector for the financial year in respect of which they are prepared and the following

3 financial years;

(b) a statement of the material economic and other assumptions that have been used in preparing the updated

statements;

(c)	discussion of the sensitivity of the updated statements to changes in those economic and other assumptions;
(d)	where feasible, that may have a

a statement of the risks, quantified statements, including—

(i) contingent liabilities;

(ii) publicly announced Government
commitments that are not yet
included in the updated
statements.

(2) The information in a pre-election budget

update must take into account, to the fullest
extent possible, all Government decisions
and all other circumstances that may have a
material effect on the estimated financial
statements.

(3) A pre-election budget update must be based

on—

Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 4

(a)	the current financial policy objectives and strategies statement;
(b)	generally accepted accounting principles.

(4) If particular information required to be

included in a pre-election budget update is
unchanged from information set out in full in
earlier estimated financial statements and
accompanying statement or an earlier budget
update, the pre-election budget update may
instead summarise the information and state
that it is unchanged from what was set out in

the earlier statements or budget update.

27C. Release of pre-election budget update

The Secretary must publicly release the pre- election budget update within 10 days after the issue of the writ for the election.

Division 7—Release of Reports, Statements and

Updates

27D. General provision for release of documents

(1) This section applies to—

(a) an audited annual financial report;
(b) a mid-year report;
(c) a quarterly financial report;

(d) a budget update;

(e)

the financial policy objectives and association with a budget update.

(2) Subject to this section, the Minister must

cause a document to which this section
applies to be laid before—

Financial Management (Financial Responsibility) Act 2000

s. 4 Act No. 9/2000

(a)	the Legislative Assembly on or before the release day for that document; and
(b)	the Legislative Council on the same day that it is laid before the Legislative Assembly or, if the Council is not then sitting, on the next sitting day of the Council.

(3) If—

(a) applies is not laid before the Legislative

a document to which this section that document; and

(b)	the Legislative Assembly is not sitting on that day; and
(c)	the Legislative Council is sitting on that day—

the Minister must cause the document to be laid before the Council on that day and the Assembly on the next sitting day of the

Assembly.

(4) If—

(a) applies is not laid before the Legislative

a document to which this section that document; and

(b) neither House of the Parliament is sitting on that day—

the Minister must, on that day, give the
document to the clerk of each House of the

Parliament.

(5) In this section, "release day" for a

document specified in column 1 of the table
means the day specified in column 2 of the
table opposite that document.

Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 4

TABLE

Column 1	Column 2
Document	Release day
audited annual financial report for	27 October
a financial year and quarterly	next following
financial report for the quarter	that financial
ending on 30 June in that	year
financial year
mid-year report for a financial	15 March in
year and quarterly financial report	that financial
for the quarter ending on 31	year
December in that financial year
quarterly financial report for the quarter ending on 30 September—
(a) in 2000/2001	30 November
2000
(b) in each subsequent financial	15 November

year in that
financial year

quarterly financial report for the

quarter ending on 31 March—

(a) in 2000/2001	31 May 2001
(b) in each subsequent financial	15 May in that

year financial year

budget update for a financial year	15 January in
and financial policy objectives	that financial
and strategies statement prepared	year
in association with it

27E. Release of estimated financial statements and budget financial policy objectives and strategies statement1

The Minister must cause the estimated financial statements for a financial year and accompanying statement and the financial policy objectives and strategies statement

Financial Management (Financial Responsibility) Act 2000

s. 4 Act No. 9/2000

prepared in association with the budget for

that financial year to be laid before—

(a) the Legislative Assembly on or before the day on which the second readings of the annual appropriation Bills for

that year are moved; and

(b)	the Legislative Council on the same day that they are laid before the Legislative Assembly or, if the Council is not
sitting on that day, on the next sitting day of the Council.

27F. Release of documents when Parliament is

not sitting

(1) If a document is given to the clerk of a

House of the Parliament under section 27D, the clerk must cause—

(a)	a copy of the document to be given to each member of the House; and
(b)	the document to be laid before the House on the next sitting day of the House.

(2) If a document is given to the clerk of a House of the Parliament under section 27D—

(a)

a person may read, make a copy of, document;

(b) a person does not incur any civil or criminal liability for the doing by the person or another person of anything referred to in paragraph (a).'.

Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 5

5. Consequential amendment of Financial Management Act

(1) In the Financial Management Act 1994—

(a) in section 35(4), omit ", and must include a statement of the reasons for doing so in the statement of operations under Part 5 in

respect of the financial year";

(b) section 41 is repealed.

(2) After section 62A(2) of the Financial

Management Act 1994 insert—
"(3) Despite the commencement of the Financial

Management (Financial Responsibility) force immediately before that commencement, continue to apply in respect of the financial year 1999/2000.".

_______________
Financial Management (Financial Responsibility) Act 2000

s. 6 Act No. 9/2000

PART 3—AUDIT ACT 1994

No. 2/1994.	6. New Part 3A inserted
Reprint No. 3
as at
1 January	After Part 3 of the Audit Act 1994 insert—
2000.

'PART 3A—REVIEW OF ESTIMATED FINANCIAL STATEMENTS

16B. Review and report to Parliament on

estimated financial statements

(1) The Auditor-General must review each set of

estimated financial statements prepared
under section 23H of the Financial
Management Act 1994 and make a report to
the Parliament as to whether it appears
that—

(a)	the statements have been prepared on a basis consistent with the accounting policies on which they are stated to be based;
(b)	targets specified in the current financial policy objectives and strategies

the statements are consistent with the measure specified in that statement;

(c) prepared on the basis of the
assumptions contained in the
accompanying statement prepared in
association with the statements under

the statements have been properly Management Act 1994;

(d) the methodologies used to determine those assumptions are reasonable.

Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 s. 6

(2) The Auditor-General must give each report

under this section to the Minister a
reasonable time before it is required to be
laid before each House of the Parliament
under sub-section (3).

(3) The Minister must cause each report under this section to be laid before each House of the Parliament with the estimated financial statements to which it relates2.

(4) For the purposes of a review and report

under this section, the Minister must provide estimated financial statements.

the Auditor-General with access to any
documents requested by the Auditor-

(5) Nothing in this section entitles the Auditor-

General to question the merits of policy objectives of the Government.

(6) In this section—

"current financial policy objectives and

strategies statement", in relation to a
set of estimated financial statements for
a financial year, means the financial
policy objectives and strategies
statement prepared under section 23E
of the Financial Management Act
1994 in association with the budget for
that financial year;

"Minister" means the Minister who prepares the estimated financial statements;

"policy objectives" has the same meaning as in section 16(9).'.

Financial Management (Financial Responsibility) Act 2000

s. 7 Act No. 9/2000

7. Consequential amendment of Audit Act

(1) In the Audit Act 1994—

(a) in section 1, after paragraph (a) insert— "(ab) the review of the Government's

estimated financial statements by the

Auditor-General; and";

(b)	in section 1(b) after "audits" insert "and reviews";
(c)	in section 16A(1), for "financial statement" substitute "annual financial report".

(2) In section 16A of the Audit Act 1994, for sub-

section (4) substitute—

"(4) The Auditor-General must cause a copy of

each report under this section to be any event within 7 sitting days after that day.".

transmitted to each House of the Parliament
as soon as practicable after the day on which
the audited annual financial report to which
it relates is laid before, or given to the clerk
of, that House under section 27D of the

8. New section 27 inserted

After section 26 of the Audit Act 1994 insert—

"27. Annual financial statement

Despite the commencement of section 7 of
the Financial Management (Financial
Responsibility) Act 2000, section 16A, as in
force immediately before that
commencement, continues to apply in

respect of the financial year 1999/2000.".

═══════════════
Financial Management (Financial Responsibility) Act 2000

Act No. 9/2000 Notes

NOTES

†

Minister's second reading speech—

Legislative Assembly: 2 March 2000

Legislative Council: 4 April 2000

The long title for the Bill for this Act was "to amend the Financial Management Act 1994 and the Audit Act 1994 to provide for the enhanced disclosure of financial and budget information by the Victorian

Government and the review of estimated financial statements by the

Auditor-General and for other purposes."

1 The Minister is also required, under section 16B of the Audit Act 1994, to

cause the report of the Auditor-General's review of the estimated financial
statements under that section to be laid before each House of the

Parliament with the estimated financial statements.

2 Section 27E of the Financial Management Act 1994 requires the Minister

to cause the estimated financial statements for a financial year to be laid
before the Legislative Assembly on or before the day that the second
readings of the annual appropriation Bills for that year are moved and the
Legislative Council on that day or the next sitting day.