Finance Regulations (Amendment)

Overview

The Audit Act 1901, enacted by the Parliament of Australia, establishes the framework for financial audits and regulates the expenditure of Commonwealth funds. In 1987, the Finance Regulations (Amendment) 1987 No. 191 was issued to address the need for flexibility and innovation in financial management information systems. This amendment was authorised by the Minister for Finance and aimed to facilitate the testing and development of alternative processing techniques and work practices within computer-based financial management systems, specifically through a pilot study at Defence establishments in South Australia and HMAS Cerberus in Victoria. The study sought to evaluate the efficacy of a computer-based accounting system developed for the Department of Defence, with potential applications for other government departments and agencies. To ensure the comprehensive and effective conduct of this pilot, certain sections of the existing Finance Regulations were suspended to allow for necessary flexibility in accounting arrangements, while alternative controls were established through directions issued under the authority of regulation 127A. This regulatory amendment aimed to preserve the power of relevant officials to issue necessary directions throughout the duration of the pilot study.

Scope and Application

The Audit Act 1901 provides the framework for financial management and accountability within the Australian Government, and its application is facilitated through the Finance Regulations. The 1987 amendments to these regulations, specifically addressing the implementation of a pilot study in South Australia and at the Victorian naval establishment HMAS Cerberus, allow for the testing and development of alternative processing techniques and work practices in computer-based financial management information systems. This amendment is significant for Defence establishments and potentially applicable to other departments and agencies. The suspension of certain existing regulations under this pilot scheme is intended to provide the necessary flexibility to thoroughly test the computer-based accounting system being developed for the Department of Defence. The powers of the Minister for Finance, the Secretary of the Department of Finance, and the Secretary of the Department of Defence to issue directions on accounting procedures during the pilot study are preserved and extended through these amendments. This ensures that the necessary alternative controls can be established and maintained throughout the duration of the pilot study.

Key Provisions

The Finance Regulations (Amendment) 1987 No. 191 under the Audit Act 1901 provides specific provisions aimed at facilitating the testing and development of alternative processing techniques and work practices within computer-based financial management information systems. Regulation 1, in particular, allows for the suspension of Parts II, IIA, and III of the existing Finance Regulations. This is to enable a pilot study to be conducted at Defence establishments in South Australia and the Victorian naval establishment HMAS Cerberus. This pilot study is intended to test and assess the effectiveness of a computer-based accounting system developed for the Department of Defence, which has potential applications for other departments and government agencies. The suspension of these parts is necessary to provide the flexibility in accounting arrangements required to thoroughly test the system. Under these regulations, certain obligations are imposed on the relevant parties. Specifically, the Minister for Finance, the Secretary of the Department of Finance, and the Secretary of the Department of Defence are empowered to issue directions regarding the accounting procedures that will be in effect during the pilot study period. This is outlined in Regulation 2, which amends existing Finance Regulation 127A by inserting sub-regulation 127A(4A). This ensures that the authority to issue these directions remains in place throughout the duration of the pilot study, thus maintaining the ability to establish the necessary alternative controls as required. In terms of compliance and enforcement, breaches of the provisions outlined in these regulations could lead to various legal consequences. While the specific penalties are not detailed within the Explanatory Statement, breaches of regulations under the Audit Act 1901 can generally lead to both civil and criminal penalties. Civil penalties may include fines, and in more severe cases, criminal penalties could be imposed, including imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as the specific provisions of the Audit Act 1901 and any relevant subsidiary legislation.