Audit Act 1906

Administered by Department of the Prime Minister and Cabinet

Legislation au C1906A00008 In force Act

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AUDIT.

 

No. 8 of 1906.

An Act to amend the Audit Act 1901.

[Assented to 24th September, 1906.]

BE it enacted by the Kings Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—

Short title and incorporation.

1. This Act may be cited as the Audit Act 1906, and this Act and the Audit Act. 1901 (in this Act referred to as the Principal Act) shall be read together and may together be cited as the Audit Acts 1901-1906.

Application of Act to past transactions.

2. Anything done before the commencement of this Act which would have been valid if done in pursuance of the Principal Act as amended by this Act shall be as valid and effectual as if done in pursuance of the Principal Act as so amended.

Alteration of Public Accountant to Accounting Officer

3. The Principal Act is amended by omitting from section two thereof in definition (d) the words Public Accountant, and inserting in lieu thereof the words Accounting Officer, and by omitting from all other parts and sections thereof the words Public Accountant or Public Accountants wherever those words occur, and inserting in lieu thereof the words Accounting Officer or Accounting Officers, as the case requires.

New definition.

4. Section two of the Principal Act is amended by adding thereto the following definition:—

(g) Guarantee Fund means the Guarantee Fund established for guaranteeing the Commonwealth against loss arising from the fraud or want of fidelity of officers.

New section.

5. After section twenty-six of the. Principal Act the following section is inserted:—

Use of Money Order Account for payment and receipt of moneys.

26a. Notwithstanding anything contained in this Act, the Money Order Account may, subject to the direction of the Treasurer, be used for the receipt or payment of any public moneys.

Amendment of section 34.

Payment of accounts before being certified.

6. Section thirty-four of the Principal Act is amended—

(a) by inserting, at the end of sub-section (1), and as part of that sub-section, the words Provided that the Treasurer may permit the payment of any account before it has been certified if the same has been checked by a responsible officer, and if he is satisfied that undue delay in the payment of the account would be caused if it had to be certified before payment; and

(b) by inserting after the word always in sub-section (6) and as part of that sub-section the words unless otherwise directed by the Treasurer.


Amendment of section 36.

7. Section thirty-six of the Principal Act is amended by adding, at the end of sub-section (1) thereof and as part of that sub-section, the words—

Unclaimed Militia pay.

Provided that any pay earned in any financial year by members of the Militia Forces may be paid after the close of that year and charged to the appropriation made for the service of that year.

New sections.

8. After section thirty-six of the Principal Act the following sections are inserted:—

Debiting of expenditure charged to Treasurers advance.

36a. Expenditure in excess of specific appropriation or not specifically provided for by appropriation may be charged to such heads as the Treasurer may direct provided that the total expenditure so charged in any financial year, after deduction of amounts of repayments and transfers to heads for which specific appropriation exists, shall not exceed the amount appropriated for that year under the head Advance to the Treasurer.

Salary votes.

36b. The amount included in any subdivision in a Schedule to an Appropriation Act for the salary in respect of an office or position occupied by an officer shall be available for payment of the officers salary in any branch the salaries for which are provided in the same subdivision.

Credits may be taken in reduction of expenditure in a subsequent year.

36c. Credits which are made for the purpose of adjusting expenditure between Departments or between branches of Departments and which could have been taken in reduction of some particular expenditure in any financial year had the accounts of that year not been closed may be taken in reduction of similar expenditure in a subsequent year.

Extension of time for making surcharges.

9. Sub-section (2) of section forty-two of the Principal Act is amended by omitting the word three between the words within and months and by inserting in lieu thereof the word six.

Periods for audit and inspection of accounts.

10. Sub-section (2) of section forty-five of the Principal Act is amended by inserting in paragraph (a), immediately after the words Once at least in every year, the words or in those cases in which the cost of audit would be disproportionate to the amount involved at such intervals as may be sanctioned by the Treasurer (provided that a list of all such cases shall be published in the Auditor-Generals Report each year).

New section.

11. After section forty-five of the Principal Act the following section is inserted:—

Power to dispense with detailed audit of accounts.

N.S.W. 1902, s. 54;

S.A. s. 22;

W.A. s. 48.

45a. The Auditor-General may, with the consent of the Treasurer, dispense with all or any part of any detailed audit of any accounts, but not with any appropriation audit of those accounts. The consent of the Treasurer shall be given only in cases in which he considers that there are circumstances which render a detailed audit under this Act unnecessary.

Provided that a list of all such cases shall be published in the Auditor-Generals Report each year.


Treasurers quarterly statements of receipts and expenditure.

N.S.W. s. 28;

V. s. 48;

Q. s. 23;

N.Z. s. 69;

W.A. s. 37;

Tas. s. 25;

S.A. s. 29.

12. Section forty-nine of the Principal Act is repealed and the following section substituted in lieu thereof:—

49.—(1.) The Treasurer, as soon as conveniently may be after the expiration of every quarter of the financial year, shall publish in the Gazette a statement in detail of the receipts and expenditure of the Consolidated Revenue Fund, the Trust Fund, and the Loan Fund during such year up to the end of such quarter, together with a comparative statement of such receipts and expenditure during the corresponding period of the previous financial year.

(2.) The Treasurer shall also at the same time and in like manner publish a statement in detail of the Loan Fund with the balances to The credit of that Fund.

New sections.

13. After section sixty-two of the Principal Act the following sections are inserted:—

Trust Accounts.

62a.—(1) The accounts specified in the first column of the Fourth Schedule shall be Trust Accounts for the respective purposes specified in the second column of the said Schedule opposite the name of each account.

(2.) The Treasurer may establish additional Trust Accounts and define the purposes for which they are established.

(3.) All moneys standing to the credit of any Trust Account specified in the Fourth Schedule or established by the Treasurer under this section shall be deemed to be moneys standing to the credit of the Trust Fund.

(4.) The Treasurer may direct that any Trust Account be closed, and thereupon the moneys standing to the credit of the account shall, after all liabilities of the account have been met, be paid to the Consolidated Revenue Fund.

Moneys to be paid into Trust Accounts.

(5.) The following moneys may be paid to the credit of the Trust Account to which they relate:—

(a) All moneys appropriated by law for the purposes of any Trust Account:

(b) All moneys received from the sale to any person or Commonwealth Department of any articles purchased or produced, or for work paid for, with moneys standing to the credit of a Trust Account:

(c) All moneys paid by any person for the purpose of any Trust Account: and

(d) Pay due to a member of the Militia Forces and unclaimed in the hands of an Accounting Officer for three months.

Expenditure of money in Trust Account.

(6.) Moneys standing to the credit of a Trust Account may be expended for the purposes of the account.

Investment of moneys standing to credit of Trust Fund.

62b.—(1.) Moneys standing to the credit of the Trust Fund may be invested by the Treasurer—

(a) in any securities of, or guaranteed by, the Government of the Commonwealth or of any State; or

(b) on deposit in any bank.


(2.) The Treasurer and his successors in office shall, for the purposes of the investment of any moneys in pursuance of this section, be deemed to be a corporation by the name of The Treasurer of the Commonwealth, and any securities or deposits taken or made in pursuance of this section may be taken or made by him in his corporate name.

Disposal of interest.

(3.) Except where otherwise provided in any Act any interest received from the investment of any moneys standing to the credit, of the Trust Fund shall be paid to the Consolidated Revenue Fund.

Amendment of section seventy-one.

14. Section seventy-one of the Principal Act is amended by adding thereto, after paragraph (c), the following paragraphs:—

(d) requiring officers, holding positions which in the opinion of the Treasurer ought to be guaranteed, to contribute to the Guarantee Fund;

(e) Providing for the control and management of the Guarantee Fund.

New Schedule.

15. After the Third Schedule to the Principal Act the following Schedule is inserted:—

FOURTH SCHEDULE.

Section 62a. Trust Accounts.

Name of Account.

Purposes.

The Commonwealth Ammunition Material Account

Purchase of ammunition material.

The Small Arms Ammunition Account

Purchase of small arms ammunition.

The Defence Clothing Material Account

Purchase of material for Defence uniforms.

The Small Arms Account.........

Purchase of small arms and parts.

The Unclaimed Militia Pay Account

Payment of unclaimed pay to members of the Militia Forces.

The Customs Officers Overtime Account

Payment to the Consolidated Revenue Fund or to officers of the Department of Trade and Customs out of moneys received from the public for the services of officers.

The Government Printer Account

Payment for labour employed and material used in the Government Printing Office.

The Naval Agreement ActSpecial Pay Account

Payment at special rates to Australians and New Zealanders, in accordance with Article V. of the Agreement set out in the Schedule to the Naval Agreement Act 1903.

The Naval Agreement Act—Registry Account

Payment of expenses connected with registration offices established in connexion with the Agreement set out in the Schedule to the Naval Agreement Act 1903.

The Pensions Account...........

Payment to officers on retirement.

The Guarantee Fund Account

Payments into the Defalcation Account in connexion with loss arising from the fraud or want of fidelity of officers.

The Defalcation Account.........

Payment of loss arising from the fraud or want of fidelity of officers.

The Money Order Account........

Remittances by Money Orders and Postal Notes.

The International Postal and Money Order Account

Settlement of Accounts between the Commonwealth and other Governments.

The Defence Force Stores Collections Account (Queensland)

Purchase of Defence Material.

The Deferred Pay Account........

Payment of Deferred Pay of Members of Defence Forces.

The Ocean Mails Account.........

Settlement of accounts between the Postmaster-Generals Department and Governments of other countries

 

Overview

The Audit Act 1906 was enacted by the Parliament of Australia to amend the Audit Act 1901, collectively referred to as the Audit Acts 1901-1906. This legislation sought to address various issues related to the auditing and financial management of the Commonwealth of Australia, ensuring that financial practices were robust and transparent. The policy objective of the Act was to enhance the auditing process and financial oversight mechanisms by introducing amendments to existing provisions and incorporating new sections. The Act was assented to on 24 September 1906, and it introduced changes such as the alteration of terminology from "Public Accountant" to "Accounting Officer," the establishment of a Guarantee Fund to protect against losses due to fraud or lack of fidelity by officers, and the introduction of new definitions and sections to streamline financial operations and accountability.

Scope and Application

The Audit Act 1906 amends the Audit Act 1901, applying to any transactions or conduct that would have been valid under the original Act if it had been amended to include the provisions of the 1906 Act. This means that actions taken prior to the Act's commencement, if they would have been permissible under the amended Act, are considered valid and effective. The Act applies to the Commonwealth of Australia and its entities, including officers, departments, and accounts specified in the Fourth Schedule. It replaces the term "Public Accountant" with "Accounting Officer" and introduces the concept of a "Guarantee Fund" to cover losses from fraud or lack of fidelity by officers. The Act also allows the Treasurer to direct the use of the Money Order Account for public money transactions, provides for the payment of militia pay after the financial year-end, and extends the time for making surcharges. Additionally, it allows the Auditor-General to forgo detailed audits with the Treasurer's consent, subject to annual reporting. The Treasurer is required to publish quarterly financial statements detailing the Commonwealth's revenue and expenditure. The Act also mandates the establishment of Trust Accounts for specific purposes and allows for the investment of Trust Fund moneys. It further imposes obligations on officers to contribute to the Guarantee Fund and mandates the control and management of the Guarantee Fund. The Act extends to the states and territories of Australia, though specific provisions may vary.

Key Provisions

The Audit Act 1906 (referred to as the "Act") amends the existing Audit Act 1901 (referred to as the "Principal Act"). The amendments include changes to terminology, the introduction of new definitions, and the addition of new sections. For example, the Act replaces the term "Public Accountant" with "Accounting Officer" throughout the Principal Act (sections 3 and 4), and adds a new definition for "Guarantee Fund" (section 4). New sections are added to address the use of the Money Order Account for public moneys (section 5), and to allow for the payment of Militia pay after the financial year has ended (section 7). The Act also introduces new provisions for the debiting of expenditure to the Treasurer's advance (section 36a), and allows for credits to be taken in reduction of expenditure in subsequent years (section 36c). The Act imposes several obligations on parties and entities it governs. For example, it allows the Treasurer to permit the payment of accounts before certification if certain conditions are met (section 6). It also requires the Treasurer to publish quarterly statements of receipts and expenditure (section 12). The Act places the responsibility on the Treasurer to establish Trust Accounts and manage moneys within these accounts (section 62a). Furthermore, it mandates that the Treasurer invest moneys standing to the credit of the Trust Fund (section 62b). The Act also sets out various offences, penalties, and consequences for breaches. For instance, it allows the Auditor-General to dispense with detailed audits of accounts under certain circumstances (section 11). However, it explicitly states that appropriation audits cannot be dispensed with. The Act does not specify particular penalties for breaches, but it implies that breaches may be subject to the general legal consequences that apply under Australian law for non-compliance with statutory provisions.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.