EXPLANATORY STATEMENT
Statutory Rules 1988 NO. 130
(CIRCULATED BY THE AUTHORITY OF THE MINISTER FOR FINANCE)
SUBJECT: AUDIT ACT 1901
AUDIT REGULATIONS (AMENDMENT)
Subsection 71(1) of the Audit Act 1901 (the Act) provides that the Governor-General may make Regulations for the carrying out of the provisions of the Act. The Statutory Rules amend the Audit Regulations which were made for the purposes of section 63C of the Act.
Subsection 63C(2) of the Act provides that a body incorporated for a public purpose by an Ordinance of the Australian Capital Territory may be declared, by regulations made under subsection 71(1) of the Act, to be a public authority to which either Division 2 or 3 of Part XI of the Act applies, subject to any modifications made by the regulations to the relevant Division in its application to that authority.
Part XI sets out standard financial provisions on accounts, audit and annual reports that may be applied to incorporated bodies established by legislation. Division 2 contains provisions for those bodies which are required to keep their accounts in accordance with commercial practice. Division 3 contains those provisions which are appropriate to bodies which are not required to keep their accounts in accordance with commercial practice.
The Canberra Institute of the Arts Ordinance 1988 established the Canberra Institute of the Arts, with effect from 8 February 1988, as a body corporate, with perpetual succession, capable of acquiring, holding and disposing of real and personal property and of suing and of being sued in its corporate name.
The Audit Regulations have been amended to declare the Canberra Institute of the Arts as a body to which Division 3 of Part XI of the Act applies. Given that the functions of the Institute are not commercial it is appropriate that it should not be required to keep accounts in accordance with commercial practice.
In addition the following amendments have been made to Division 3:
sections 63K and 63L have, in their application to the Institute, been modified to make it clear that these sections are to apply not only to the money and property of the Institute, but also to money and property held by the Institute as trustee.
subsection 63M(1) has been modified to provide for the annual reports of the Institute to be prepared in respect of the academic, as opposed to the financial year.
A further amendment included in the Statutory Rules omits clause 2 of Part IX of Schedule 1 to the Audit Regulations.
Previously clause 2 modified subsection 63H(3) in its application to the Milk Authority of the Australian Capital Territory to require that the Authority table its annual report in the Act House of Assembly as well as in Parliament.
Since the ACT House of Assembly is now defunct, this requirement has been omitted.
Overview
The Audit Regulations (Amendment) Statutory Rules 1988 were enacted to amend the existing Audit Regulations under the Audit Act 1901. This legislative amendment was introduced to address the need to tailor financial reporting requirements for specific public authorities, particularly those not operating on a commercial basis. The Canberra Institute of the Arts, established under the Canberra Institute of the Arts Ordinance 1988, is declared as a public authority subject to Division 3 of Part XI of the Audit Act, which applies to bodies not required to keep accounts in accordance with commercial practice. The amendments ensure that the financial and reporting obligations for the Institute align with its non-commercial functions. Furthermore, modifications to sections 63K and 63L clarify their application to both the Institute's own assets and those held in a trustee capacity. Additionally, the annual reporting requirement has been adjusted to reflect the academic year rather than the financial year. This change ensures that the reporting obligations are appropriate for the Institute’s operational context. The amendment also removes a defunct requirement related to the Milk Authority of the Australian Capital Territory, reflecting the dissolution of the ACT House of Assembly.
Scope and Application
The Audit Regulations (Amendment) Statutory Rules 1988 clarify the financial reporting requirements for the Canberra Institute of the Arts under the Audit Act 1901. These amendments designate the Canberra Institute of the Arts as a body to which Division 3 of Part XI of the Act applies, recognising that its functions are not commercial in nature and thus exempting it from the need to maintain accounts in accordance with commercial practice. This regulation aligns with the non-profit status of the Institute, ensuring that its financial reporting obligations are tailored to its specific operational context. The amendments also modify sections 63K and 63L to explicitly include money and property held by the Institute as trustee within their scope, thereby ensuring comprehensive coverage of all assets under the Institute’s control. Furthermore, section 63M(1) has been adapted to require annual reports to be prepared in alignment with the academic year rather than the financial year, reflecting the unique operational calendar of educational institutions. These regulatory changes provide a clear and appropriate framework for the financial accountability of the Canberra Institute of the Arts.
Key Provisions
The Audit Regulations (Amendment) Statutory Rules 2004, made under the Audit Act 1901, introduce several amendments primarily concerning the application of the Act's provisions to the Canberra Institute of the Arts. The key amendment (Section 63C(2)) declares the Canberra Institute of the Arts as a public authority to which Division 3 of Part XI of the Act applies. This is appropriate given that the Institute's functions are non-commercial in nature, and it is therefore not required to maintain its accounts in accordance with commercial practices.
Under these regulations, the provisions in sections 63K and 63L have been modified to clarify that they apply not only to the money and property of the Institute but also to any money and property held by the Institute as a trustee. This ensures comprehensive oversight and accountability for all assets under the Institute's management. Furthermore, subsection 63M(1) has been altered to specify that the Institute's annual reports should be prepared in relation to the academic year rather than the financial year, aligning the reporting cycle with the Institute's academic calendar.
The regulations also impose several obligations on the Canberra Institute of the Arts. These include the preparation of annual reports in accordance with the modified requirements, ensuring that financial and property management practices comply with the specified sections of the Act, and maintaining accurate records of all transactions and holdings. The Institute must ensure that these reports are submitted to the appropriate authorities within the stipulated timeframes.
Failure to comply with the provisions of the Audit Act 1901 and the amended regulations can result in various consequences. While specific penalties are not detailed in the provided text, breaches of the Act can generally lead to both civil and criminal liabilities. Civil penalties may include fines, while criminal penalties could involve imprisonment, depending on the severity of the breach and the discretion of the court. The exact penalties would be determined in the context of each case, taking into account the specific nature of the breach and any mitigating or aggravating factors.