EXPLANATORY STATEMENT
ISSUED ON THE AUTHORITY OF THE MINISTER FOR FINANCE
Subject - Audit Act 1901
Finance Regulations (Amendment)
Subsection 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) for carrying out the provisions of the Act. The attached Statutory Rules will amend the Finance Regulations made pursuant to section 71.
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 Regulations no longer covered the AFP, nor did the definition of “Secretary” provide for the Commissioner of Police to be “Secretary” of the AFP for the purposes of the Finance 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 Regulations:-
Regulation 4
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 127A
This regulation includes a provision which empowers Secretaries of Departments to give directions, subject to
certain conditions, to officers within their Departments on any of the matters on which regulations may be made.
The amendment provides that the Commissioner of Police may 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 71(1)(a) to (j) of the Act (these paragraphs set out those matters which may be dealt with in the Regulations).
Certain minor changes to regulation 127A have also been made which are either of a drafting nature or reflect the addition of paragraphs (h) and (j) to subsection 71(1) of the Act by the Audit Amendment Act 1989. Paragraphs (h) and (j) enable regulations to be made concerning the procedures to be followed when entering into commitments and when preparing estimates of future expenditure.
Overview
The Audit Act 1901, enacted by the Australian Parliament, provides a framework for the auditing of public accounts, including the making of regulations to implement the Act. The Finance Regulations (Amendment) 2004, issued under the authority of the Minister for Finance, addresses the issue that arose from the Australian Federal Police Legislation Amendment Act (No 2) 1989, which shifted the employment status of Australian Federal Police staff from the Public Service Act 1922 to the Australian Federal Police Act 1979. Consequently, the Finance Regulations no longer adequately covered the Australian Federal Police (AFP). This necessitated an amendment to ensure the Regulations apply to the AFP in the same manner as they did prior to the legislative change. The policy objective is to maintain consistent regulatory oversight over the AFP, ensuring that the Commissioner of Police has the authority to give directions to AFP personnel in relation to specified matters, thus preserving the integrity of financial management and accountability within the AFP.
Scope and Application
The Audit Act 1901 applies to the Commonwealth and its departments and agencies, including the Australian Federal Police (AFP), ensuring that financial and audit-related regulations are uniformly enforced. The Act provides the Governor-General with the authority to make regulations that are not inconsistent with its provisions. The Finance Regulations (Amendment) Statutory Rules specifically address the implications of the Australian Federal Police Legislation Amendment Act (No 2) 1989, which altered the employment framework of AFP staff members from the Public Service Act 1922 to the AFP Act. The amendment to the Finance Regulations includes the AFP within the definition of "Department" and specifies that the Commissioner of Police, in their capacity as the head of the AFP, is considered the "Secretary" for the purposes of the Regulations. This ensures the AFP retains the authority to give directions to its members, staff members, and special members on matters covered by the Audit Act, including those concerning the procedures for entering into commitments and preparing estimates of future expenditure. These changes, detailed in Regulation 4 and Regulation 127A, ensure the AFP continues to operate under the same regulatory framework as other Commonwealth departments.
Key Provisions
The Audit Act 1901 governs the financial management and audit of the Commonwealth government. Under section 71(1), the Governor-General has the authority to make regulations not inconsistent with the Act's provisions. The accompanying Statutory Rules amend the Finance Regulations to ensure the Australian Federal Police (AFP) are covered in the same manner as before legislative changes. Specifically, Regulation 4 has been amended to include the AFP in the definition of "Department," and Regulation 127A has been amended to empower the Commissioner of Police to give directions to AFP members, staff members, and special members on certain matters covered by the Act.
The obligations imposed by these amendments require that the AFP adhere to the same financial management and audit standards as other Commonwealth departments. This includes ensuring that the Commissioner of Police can direct AFP officers on matters specified in paragraphs 71(1)(a) to (j) of the Audit Act. These matters cover various aspects of financial management, such as the preparation of financial statements, the maintenance of accounts, and the preparation of estimates of future expenditure. By including the AFP in the definition of "Department" and providing the Commissioner with the authority to give directions, the amendments aim to streamline the application of financial regulations across all Commonwealth departments.
Failure to comply with the regulations made under the Audit Act 1901 may result in various civil or criminal consequences. The specific penalties for breaches depend on the nature and severity of the offence. For instance, if an officer fails to comply with a direction given by the Secretary of a Department, they may be subject to disciplinary action under their employing Act. In more serious cases, where the breach involves fraud or other criminal conduct, the officer may face criminal charges with potential penalties including fines and imprisonment. The exact penalties are determined by the relevant laws governing the conduct in question, but the overarching framework provided by the Audit Act ensures that breaches are taken seriously and appropriate measures are enforced to maintain financial integrity and accountability within the Commonwealth.