Financial Management and Accountability Amendment Orders 2009

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Financial Management and Accountability Amendment Orders 2009

The Financial Management and Accountability Amendment Orders 2009 (the Amendment Orders) are Orders made by the Minister for Finance and Deregulation (the Finance Minister) pursuant to subsection 63(1) of the Financial Management and Accountability Act 1997 (the FMA Act). This subsection provides that the Finance Minister may make Orders on any matters which the Act requires or permits Orders to be made and on any matter on which regulations under the FMA Act may be made.

The FMA Act provides a framework for the proper management of public money and public property that applies to Chief Executives and officials of Agencies.

The Amendment Orders have two main effects. First, to repeal the Financial Management and Accountability Orders 2008 (the FMA Orders 2008). And second, to amend the Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 1 July 2008) required under section 48 of the FMA Act.

The Amendment Orders are designed to streamline the legislative framework affecting FMA Act agencies. Most matters addressed in the FMA Orders 2008 are to be subsumed into the Financial Management and Accountability Regulations 1997 (FMA Regulations), while retaining the Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 1 July 2008), to focus on the requirements for agencies’ financial statements and their accounts and records.

This will help reduce the scope for confusion that can arise between two different sets of Financial Management and Accountability Orders (FMOs), which are currently made under the same legislative authority (section 63 of the FMA Act). Accordingly, officials in FMA Act agencies will only need to have regard to the FMA Regulations and the orders on financial statements.

Order 3 of the Amendment Orders repeals the FMA Orders 2008. The substance of the previous FMA Orders have been relocated as regulations made under the Financial Management and Accountability Regulations 1997 (FMA Regulations) under the FMA Act (as a consequence of the commencement, on 20 March 2009, of the Financial Framework Legislation Amendment Act 2008). In particular, the substance of the orders has been transferred as follows:

• Order 2.1, Audit Committee (FMA Act, section 46), see regulation 22C;
• Order 2.2, Fraud control report to responsible Minister (FMA Act, section 45; FMA Regulations, regulation 19). Regulation 16A already requires Fraud Control Guidelines which sufficiently address these fraud control requirements;
• Order 2.4, Estimates, see regulation 22D;
• Order 2.5, Use of a Commonwealth credit card for particular purposes (FMA Act, section 60; FMA Regulations, regulation 21), see regulation 21;
• Order 2.6, Chief Executive may delegate powers, see regulation 26;
• Order 2.7, Finance Chief Executive may delegate powers, see regulation 25;
• Order 3.1, Prompt banking of received money (FMA Act, section 10), see regulation 17;
• Order 3.2, Public Money in non-bankable currency (FMA Act, section 10), see regulation 18;
• Order 3.3, Withdrawals from official accounts and internal transfers between accounts (FMA Act, section 13), see regulation 19;
• Order 4.1, Custody etc of securities (FMA Act, section 40), see regulation 20.

The following orders are covered in the FMA Regulations as a consequence of the Financial Management and Accountability Amendment Regulations 2009 (No 4), which commenced on 1 July 2009:

• Order 5.1, Business operation of an Agency, see regulation 5A;
• Order 6.1, Payments for leave entitlements when employees move between Agencies etc, see regulations 31 to 34.

The second effect concerns previous order 2.3 (Accounts and records (FMA Act, section 48)). This is now dealt with in order 4 of the Financial Management and Accountability Orders (Financial Statements for reporting periods ending on or after 1 July 2008).

The Amendment Orders are a disallowable legislative instrument for the purposes of the LI Act.

All affected Agencies were consulted and legal advice from the Australian Government Solicitor has confirmed the intended effect of the Amendment Orders.

The Amendment Orders commenced on the day after registration on the Federal Register of Legislative Instruments.