EXPLANATORY STATEMENT
SUBJECT - AUDIT ACT 1901: FINANCE REGULATIONS (AMENDMENT) FINANCE (OVERSEAS) REGULATIONS (AMENDMENT)
1987 No. 169
Sub-section 71(1) of the Audit Act 1901 (the Act) provides that the Governor-General may make regulations (not inconsistent with the provisions of the Act). In the attached Statutory Rules the Finance Regulations and Finance (Overseas) Regulations, made pursuant to these provisions, have been amended.
Details of the amendments are as follows:
Section 34 of the Act, provides, inter alia, that a payment included in a prescribed class of payments may be certified if, after any requirements prescribed by the regulations or in any directions given by the Minister have been complied with, the Certifying Officer has no reason to believe that payment may not properly be made. This provision enables prescribed classes of claims to be certified without undergoing the detailed checking normally afforded claims which have not been prescribed. The classes of claims which have been prescribed, and the checks to be carried out on them, are included in Finance Regulation 45A and Finance (Overseas) Regulation 13.
An Efficiency Scrutiny on the Processing of Accounts was established by the Government to examine all aspects of the processing of accounts with the object of ensuring that the efficiency of the process is maximised and payments are made by the due date. Included in the report of the Scrutiny was a recommendation that the number of checks to be carried out on certain large volume accounts be reduced. The Scrutiny revealed that the then current procedures involved an excessive checking of accounts for correctness and that the extra costs associated with such procedures produced insufficient benefit to the Commonwealth. Moreover, it was observed that those processes often slowed down the making of payments to claimants to an unacceptable degree.
To give effect to that recommendation, Finance Regulation 45A and Finance (Overseas) Regulation 13 have been amended to prescribe two additional classes of payments. They are:
(a) payments in satisfaction of claims made under contracts under which the Commonwealth has the right to make adjustments of those payments, as necessary, on subsequent claims by those claimants; and
(b) payments in satisfaction of claims for payment of accounts not exceeding $1000 in respect of supplies.
It is anticipated that, by simplifying the certification of such claims, the amendments will result both in considerable financial savings to the Commonwealth and improved commercial relationships with claimants.