EXPLANATORY STATEMENT
ISSUED WITH THE AUTHORITY OF THE MINISTER FOR FINANCE
Subject - Audit Act 1901
Finance (Overseas) Regulations (Amendment)
Subsection 71(1) of the Audit Act 1901 (the Act) provides that the Governor-General may make regulations for carrying out the provisions of the Act. Also, section 63 of the Act provides that the regulations may make provision for and in relation to financial transactions outside the Commonwealth. The attached Statutory Rules amend the Finance (Overseas) Regulations which were made under section 71, in accordance with section 63.
The Australian Federal Police Legislation Amendment Act (No 2) 1989 included an amendment to the Australian Federal Police Act 1979 (the AFP Act) whereby staff members of the Australian Federal Police (the AFP), who were previously employed under the Public Service Act 1922, became employed under the AFP Act. As a consequence, the definition of “Department” in the Finance (Overseas) Regulations no longer covered the AFP, nor did the definition of “Secretary” in those regulations provide for the Commissioner of Police to be “Secretary” of the AFP for the purposes of the Finance (Overseas) Regulations and thus have the authority to give directions to persons in the AFP, as was the case previously. To ensure that the Regulations apply to the AFP in the same manner as they did before these changes, the following amendments have been made to the Finance (Overseas) Regulations:-
Regulation 2
The definition of “Department” has been amended to specifically include the AFP, thus ensuring that the AFP is a Department for the purposes of the Regulations.
In addition, an amendment has been made to the definition of “Secretary” to provide that where the Department is the AFP the Secretary shall be the person who holds, or is performing the duties of, the office of Commissioner of Police.
Regulation 35
Regulation 35 empowers Departmental Secretaries to give directions in respect of their Departments which are to apply overseas.
An amendment has been made to this regulation which provides for the Commissioner of Police to give directions to members, staff members and special members of the AFP for or in relation to any of the matters referred to in paragraphs 63(1)(a) to (f) of the Act (which set out those matters which may be included in regulations dealing with financial transactions overseas). Certain minor amendments of a drafting nature have also been made.
Overview
The Finance (Overseas) Regulations (Amendment) 2004, issued under the authority of the Minister for Finance, amends the Finance (Overseas) Regulations made under the Audit Act 1901. This amendment addresses the problem arising from the Australian Federal Police Legislation Amendment Act (No 2) 1989, which altered the employment status of Australian Federal Police (AFP) staff members, thereby impacting the application of the Finance (Overseas) Regulations. The objective of these amendments is to ensure that the AFP remains subject to the same regulatory framework as other departments, specifically by updating definitions and authorities to reflect the new employment structure. This change is intended to maintain the integrity and consistency of financial oversight for overseas transactions involving the AFP.
Scope and Application
The Audit Act 1901 applies to the financial transactions of various entities, including the Commonwealth and its departments, as well as to financial transactions that occur outside the Commonwealth. The Act authorises the Governor-General to make regulations for carrying out its provisions, particularly concerning financial dealings overseas. This scope ensures that entities involved in financial transactions with foreign entities are subject to the oversight and regulatory requirements set forth in the Act and its subordinate regulations. The application extends to all departments defined under the Act, including the Australian Federal Police, as clarified by recent amendments to the Finance (Overseas) Regulations. These regulations have been adjusted to specifically include the AFP and define the Commissioner of Police as the Secretary for the purposes of giving directions concerning overseas financial transactions. Exclusions or exemptions are not explicitly stated in the provided text, but the regulations' applicability is limited to the scope defined by the Act and subsequent amendments.
Key Provisions
The key operative sections of the Audit Act 1901 and its associated regulations primarily address the regulation of financial transactions outside Australia. Section 71(1) of the Act (1) provides the authority for the Governor-General to make regulations to implement the provisions of the Act, while section 63 (2) further specifies that these regulations can cover financial transactions outside the Commonwealth. The Finance (Overseas) Regulations, amended through Statutory Rules (3), ensure these provisions are effectively carried out. Regulation 2 (4) amends the definition of "Department" to include the Australian Federal Police (AFP) and clarifies that the "Secretary" in the context of the AFP is the person holding or performing the duties of the Commissioner of Police. Regulation 35 (5) empowers Departmental Secretaries, including the Commissioner of Police for the AFP, to issue directions concerning financial matters overseas.
The Act and its regulations impose specific obligations on the parties they govern. The amended Finance (Overseas) Regulations ensure that the AFP, now employing staff under the Australian Federal Police Act 1979 (6), is subject to the same regulatory framework as other Commonwealth departments. This includes complying with directions issued by the Commissioner of Police regarding financial transactions overseas. These directions must be in line with the matters outlined in paragraphs 63(1)(a) to (f) of the Act (7), which detail permissible areas of regulation.
Failure to comply with the provisions of the Audit Act 1901 or the Finance (Overseas) Regulations can result in significant consequences. While the explanatory statement does not explicitly state penalties, breaches of regulations made under the Audit Act 1901 could lead to civil or criminal liability, depending on the nature and severity of the breach. Historically, penalties for breaches of similar regulations can include fines and, in severe cases, imprisonment. The exact penalties would depend on the specific breach and relevant laws in place at the time of the offence.