EXPLANATORY STATEMENT
1986 No. 297
SUBJECT: AUDIT ACT 1901
AUDIT REGULATIONS (AMENDMENT)
ISSUED ON THE AUTHORITY OF THE MINISTER FOR FINANCE
The attached Statutory Rules amend the Audit Regulations made under sub-section 71(1) of the Audit Act 1901 (the Act) for the purposes of section 63C(2) of the Act.
Sub-section 63C(2) of the Act provides that a body incorporated for a public purpose by an Ordinance of the Act may be declared, by regulations made under sub-section 71(1), to be an 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 of the Act sets out financial provisions concerning accounts, audit and annual reports that are designed to have common application to public bodies to which Part XI is declared, by regulation, to apply. Division 2 contains provisions which are appropriate to an authority which is required to keep accounts in accordance with commercial practice. Division 3 contains those provisions which are appropriate to an authority which is not required to keep accounts in accordance with commercial practice.
The amendments to the Audit Regulations are as follows:
AUSTRALIAN CAPITAL TERRITORY BUSH FIRE COUNCIL
Since the ACT Bush Fire Council, together with other ACT Statutory Authorities, was made subject to Division 3 of Part XI of the Audit Act 1901 on 1 July 1984 it has become apparent that the Council now fulfills a far less independent role than was envisaged when the ACT Careless Use of Fire Ordinance was first enacted in 1933. The Council does not either own equipment or incur expenditure. The equipment used is provided by the Department of Territories and that department incurs all expenditure on bush fire matters.
In these circumstances it is considered inappropriate for the Council to prepare financial statements in accordance with Division 3 of the Act. More appropriately, what should be prepared is a statement of assets held by, or expenditure incurred by, the Department of Territories on bush fire activities.
Sub-section 63M has been modified, in its application to the Council, to facilitate the adoption of a more relevant form of reporting approved by the Minister for Territories in lieu of the Minister for Finance.
CANBERRA COMMERCIAL DEVELOPMENT AUTHORITY
The existing regulations include reference to the Canberra Commercial Development Authority (CCDA) (the Authority). As the Authority no longer exists, the regulations have been amended to provide for the omission of all references to the Authority.
Overview
The Audit Regulations (Amendment) 2004 were issued under the authority of the Minister for Finance to amend the Audit Regulations made under the Audit Act 1901. The primary objective of these amendments was to address specific issues regarding the applicability of certain financial provisions to particular public authorities, particularly the Australian Capital Territory Bush Fire Council and the now defunct Canberra Commercial Development Authority. The amendments aimed to ensure that financial reporting requirements were appropriate to the roles and responsibilities of these entities. For the Bush Fire Council, the changes recognised its reduced independence and the fact that it did not own equipment or incur expenditure, leading to a modification of its reporting requirements to reflect the actual financial activities of the Department of Territories. For the Canberra Commercial Development Authority, the amendments involved removing references to the Authority since it no longer existed. This legislative amendment was enacted by the Parliament of Australia to refine the financial oversight and reporting mechanisms for specific public authorities under the Audit Act 1901.
Scope and Application
The Audit Act 1901, as amended through the Audit Regulations (Amendment) Statutory Rules, applies to bodies incorporated for a public purpose by an Ordinance. Specifically, the Act and its regulations govern financial provisions concerning accounts, audits, and annual reports for authorities that are subject to Division 2 or Division 3 of Part XI, as appropriate. The Act allows for certain authorities to be declared under regulation to be subject to these divisions, with modifications as necessary. In the case of the Australian Capital Territory Bush Fire Council, the regulations have been amended to better reflect its current role, which involves less independence and no ownership of equipment or expenditure. Instead, the Council's financial reporting now focuses on assets held or expenditure incurred by the Department of Territories on bush fire activities. Similarly, references to the defunct Canberra Commercial Development Authority have been removed from the regulations. The jurisdictional reach of the Audit Act 1901 is national, with its application potentially extending to various authorities across Australia, subject to the regulations and modifications made under the Act.
Key Provisions
The primary sections of the Audit Regulations (Amendment) Statutory Rules pertain to the amendments in the application of the Audit Act 1901 to certain authorities. Specifically, section 63C(2) of the Act allows for the application of divisions 2 and 3 of Part XI to bodies incorporated for public purposes, with modifications as necessary through regulation. For the Australian Capital Territory Bush Fire Council (ACT Bush Fire Council), the amendment involves a modification of sub-section 63M to facilitate a more appropriate form of financial reporting. This change is intended to align the reporting requirements with the Council's current operational role, which involves the use of equipment and incurring expenditure managed by the Department of Territories.
The obligations imposed by these regulations on the ACT Bush Fire Council include the preparation of a statement detailing assets held by or expenditure incurred by the Department of Territories on bush fire activities. This statement replaces the previously required financial statements, which were deemed inappropriate given the Council's current role. The Minister for Territories is responsible for approving this alternative form of reporting. For the Canberra Commercial Development Authority (CCDA), the regulations have been amended to remove all references to the Authority as it no longer exists.
The Statutory Rules do not explicitly detail offences, penalties, or civil/criminal consequences for non-compliance with the amended regulations. However, it is reasonable to infer that failure to adhere to the new reporting requirements could result in legal consequences under the Audit Act 1901. The Act typically imposes penalties for non-compliance with audit and financial reporting requirements, which can include fines and, in severe cases, criminal charges. The specific penalties would be determined in accordance with the broader provisions of the Audit Act.