EXPLANATORY STATEMENT
Financial Framework Legislation Amendment Act (No. 1) 2011 - Proclamation
The Financial Framework Legislation Amendment Act (No. 1) 2011 (FFLA Act) amends eight Acts to clarify aspects of the financial management of Commonwealth agencies, authorities and companies. The FFLA Act received the Royal Assent on 4 August 2011.
Subsection 2(1) of the FFLA Act provided that Schedules 1 and 2 to the FFLA Act will commence on a day (or days, for Schedule 2) to be fixed by Proclamation within 12 months from the date of the Royal Assent, or 12 months after the date of the Royal Assent. Subsection 2(1) also provided that Schedule 3 to the FFLA Act will commence immediately after the commencement of item 1 in Schedule 2.
Schedule 1 to the FFLA Act amended the Commonwealth Authorities and Companies Act 1997 (CAC Act) to move the content requirements of a Government Business Enterprise’s corporate plan from the CAC Act into the Commonwealth Authorities and Companies Regulations 1997.
Schedule 2 to the FFLA Act amended the Financial Management and Accountability Act 1997 (FMA Act) to move the sunsetting and disallowance provisions for Special Account determinations and guidelines from the Legislative Instruments Act 2003 into the FMA Act. Schedule 2 also clarified that Chief Executive’s instructions are not legislative instruments, and that the external auditor of an FMA Act agency is the Auditor‑General.
Schedule 3 of the FFLA Act made consequential amendments to the Legislative Instruments Act 2003 to remove the sunsetting and disallowance exemptions in the Legislative Instruments Act 2003 that were made redundant by Schedule 2 of the FFLA Act.
All Departments of State and FMA Act Agencies have been informed of the commencement date.
The Proclamation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Proclamation fixed 1 September 2011 as the day on which Schedules 1 and 2, and consequently Schedule 3, commence.
Authority: Subsection 2(1) of the Financial Framework Legislation Amendment Act (No. 1) 2011.
Overview
The Financial Framework Legislation Amendment Act (No. 1) 2011 was enacted to address gaps in the financial management framework of Commonwealth agencies, authorities, and companies. This Act was introduced to streamline and clarify financial management responsibilities and processes across various legislative instruments, thereby enhancing accountability and transparency in the financial operations of these entities. The Act received Royal Assent on 4 August 2011 and was designed to amend eight existing Acts. The amendments, which took effect on 1 September 2011, include relocating the content requirements of corporate plans for Government Business Enterprises from the Commonwealth Authorities and Companies Act 1997 to the Commonwealth Authorities and Companies Regulations 1997, and moving sunsetting and disallowance provisions for Special Account determinations from the Legislative Instruments Act 2003 to the Financial Management and Accountability Act 1997. The overarching policy objective of the Act is to strengthen the financial management framework within Commonwealth agencies, ensuring clearer and more consistent regulatory oversight and reporting mechanisms.
Scope and Application
The Financial Framework Legislation Amendment Act (No. 1) 2011 applies to the financial management of Commonwealth agencies, authorities and companies by amending eight existing Acts. Specifically, it adjusts the requirements for corporate plans of Government Business Enterprises, relocates sunsetting and disallowance provisions for Special Account determinations and guidelines, and clarifies the role of Chief Executive’s instructions and the external auditor of Financial Management and Accountability Act 1997 agencies. This Act affects all Departments of State and agencies subject to the Financial Management and Accountability Act 1997. Geographically, the Act operates within the Commonwealth jurisdiction, impacting entities and authorities operating under federal purview. While the Act comprehensively revises several legislative aspects, it does not specify exclusions or thresholds but rather seeks to streamline and clarify financial management practices across specified entities. The commencement of the Act was set by proclamation, with Schedules 1 and 2, and consequently Schedule 3, starting on 1 September 2011. The Act may extend its application through subordinate instruments, although such extensions are not detailed in the provided text.
Key Provisions
The Financial Framework Legislation Amendment Act (No. 1) 2011 (FFLA Act) makes significant amendments to the financial management of Commonwealth agencies, authorities, and companies through eight Acts, as detailed in its various schedules. The primary amendments (Schedule 1) involve moving the content requirements of a Government Business Enterprise’s corporate plan from the Commonwealth Authorities and Companies Act 1997 (CAC Act) to the Commonwealth Authorities and Companies Regulations 1997. This shift aims to streamline the regulatory framework and clarify the obligations of these entities.
The FFLA Act imposes specific obligations on the parties it governs, including the requirement for Government Business Enterprises to submit their corporate plans in accordance with the updated regulatory framework. Furthermore, the Act mandates that the Financial Management and Accountability Act 1997 (FMA Act) now incorporates the sunsetting and disallowance provisions for Special Account determinations and guidelines, which were previously governed by the Legislative Instruments Act 2003. This change ensures that these provisions are more accessible and enforceable within the FMA Act.
Schedule 2 of the FFLA Act also clarifies that Chief Executive’s instructions are not considered legislative instruments, thereby distinguishing between administrative directives and legislative rules. Additionally, it specifies that the external auditor of an FMA Act agency is the Auditor-General, ensuring a clear chain of accountability and oversight. The consequential amendments in Schedule 3 remove outdated exemptions in the Legislative Instruments Act 2003, which were rendered redundant by the changes in Schedule 2.
Failure to comply with the provisions of the FFLA Act could lead to significant consequences. The Act does not explicitly state offences or penalties but implies that non-compliance with financial management and reporting requirements could lead to scrutiny and potential legal action. The legislative instruments and regulations amended by the FFLA Act may carry their own specific penalties for non-compliance, which would be applicable in such cases. The overall intent is to ensure robust financial governance and accountability within the Commonwealth agencies, authorities, and companies.