EXPLANATORY STATEMENT
Select Legislative Instrument 2012 No. 38
Subject - Financial Management and Accountability Act 1997
Financial Management and Accountability Amendment
Regulation 2012 (No. 2)
The Financial Management and Accountability Act 1997 (the FMA Act) provides a framework of rules for the proper management of public money and public property by Chief Executives and officials of FMA Act agencies.
Subsection 65(1) of the FMA Act provides that the Governor-General may make regulations prescribing matters required or permitted by that Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the FMA Act.
The Regulation updated the Financial Management and Accountability Regulations 1997 (the Principal Regulations) to improve their operation.
The Regulation amended Schedule 1 of the Principal Regulations to reflect changes to several FMA Act Agencies The Regulation made changes to Schedule 1 to the Principal Regulations affecting the items for the Interim Independent Hospital Pricing Authority (Interim IHPA), the Australian Taxation Office (ATO) and Note A.
Schedule 1 to the proposed Regulation inserted a note to item 127 -Australian Taxation Office. At the request of the Tax Practitioners Board (TPB), the Principal Regulations were amended on 8 March 2012 to include a reference to the TPB in the description of the ATO. This note clarified the status of the TPB within the ATO.
Schedule 1 also made a minor change to Note A of Schedule 1 to the Principal Regulations to add the date of gazettal for the National Mental Health Commission.
Schedule 2 to the Regulation removed IHPA from Schedule 1 to the Principal Regulations. A minor change to Note A of Schedule 1 was required to remove the reference to Interim IHPA.
The Interim IHPA was established on 17 August 2011 pending the statutory establishment of the Independent Hospital Pricing Authority (IHPA) as an FMA Act Agency in the Health and Ageing portfolio, as part of the National Health Reform Agreement 2011. The National Health Reform Amendment (Independent Hospital Pricing Authority) Act 2011, establishing IHPA, commenced on 15 December 2011.
Consistent with section 17 of the Legislative Instruments Act 2003, consultation has taken place with the Department of the Prime Minister and Cabinet (PM&C), because it is responsible for advising on the creation of Executive Agencies. Consultation has also taken place with the Department of Health and Ageing. Also, the primary legislation establishing IHPA was developed in consultation with State and Territory governments as part of the National Health Reform Agreement 2011 agreed by the Council of Australian Governments in August 2011.
The Office of Best Practice Regulation advised that a Regulatory Impact Statement is not necessary, as the proposed amendment was likely to have no or low regulatory impacts on business and individuals or the economy.
The Regulation is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Human Rights Act).
The Regulation makes beneficial changes to financial and related legislation by amending the Principal Regulations. The amendments do not engage any of the rights or freedoms outlined in the Human Rights Act, such as encompassed in the International Covenant on Civil and Political Rights (ICCPR). The amendments do not limit any human rights, nor establish any new offences or penalties.
The FMA Act specifies no conditions that need to be met before the power to make the proposed Regulation may be exercised.
This Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Schedule 1 of the Regulation commenced on the day after registration on the Federal Register of Legislative Instruments. Schedule 2 of the Regulation commenced on 1 April 2012.
Authority: Subsection 65(1) of the Financial Management and Accountability Act 1997.
Overview
The Financial Management and Accountability Amendment Regulation 2012 (No. 2) was enacted to amend the Financial Management and Accountability Regulations 1997, improving their operation in line with changes to various FMA Act agencies. This regulation was developed by the Governor-General under subsection 65(1) of the Financial Management and Accountability Act 1997 to address specific issues arising from the establishment and operational changes of certain agencies. Notably, it made adjustments to reflect the creation of the Independent Hospital Pricing Authority (IHPA) and clarified the role of the Tax Practitioners Board within the Australian Taxation Office. The regulation also updated references to agencies and included minor amendments to reflect changes in agency structures and responsibilities. The changes were intended to ensure the regulations remained current and effective, facilitating better financial management and accountability across the affected agencies.
Scope and Application
The Financial Management and Accountability Amendment Regulation 2012 (No. 2) applies to the entities and individuals involved in the management of public money and public property by Chief Executives and officials of agencies governed by the Financial Management and Accountability Act 1997. The regulation specifically updates the Financial Management and Accountability Regulations 1997, impacting agencies such as the Interim Independent Hospital Pricing Authority (Interim IHPA), the Australian Taxation Office (ATO), and the National Mental Health Commission. These amendments are necessary to reflect recent changes in agency structures and to clarify the roles of entities such as the Tax Practitioners Board within the ATO. The regulation also removes Interim IHPA from the schedule due to the establishment of the Independent Hospital Pricing Authority (IHPA) under the National Health Reform Amendment (Independent Hospital Pricing Authority) Act 2011. The changes are designed to ensure compliance with the FMA Act and are consistent with the legislative process outlined in the Legislative Instruments Act 2003. The regulation operates under the authority granted by subsection 65(1) of the FMA Act, and it is registered on the Federal Register of Legislative Instruments, with specific commencement dates for different parts of the regulation.
Key Provisions
The Financial Management and Accountability Amendment Regulation 2012 (No. 2) primarily amends the Financial Management and Accountability Regulations 1997 (Principal Regulations) to align with recent legislative changes and improve operational efficiency. Section 65(1) of the Financial Management and Accountability Act 1997 (FMA Act) empowers the Governor-General to make regulations necessary for the proper management of public money and property by FMA Act agencies. This regulation specifically updates Schedule 1 to the Principal Regulations to reflect changes to certain FMA Act agencies. For instance, it inserts a note clarifying the status of the Tax Practitioners Board (TPB) within the Australian Taxation Office (ATO), as requested by the TPB. Moreover, it removes the Interim Independent Hospital Pricing Authority (IHPA) from the Principal Regulations and updates the date of gazettal for the National Mental Health Commission.
The obligations imposed by this Regulation are primarily administrative and technical in nature. Entities such as the ATO and IHPA must now comply with the updated regulations that reflect their current operational status and structural changes. The regulation mandates that these agencies update their descriptions and references accordingly, ensuring that the Principal Regulations accurately reflect the current legal and organisational landscape. Additionally, agencies are required to maintain records and documentation that comply with the updated regulatory framework, which facilitates better financial oversight and accountability.
Breach of the provisions set out in the Regulation could lead to various consequences depending on the nature and severity of the non-compliance. While the Regulation itself does not introduce new offences or penalties, failure to comply with the updated regulations could result in actions under the primary FMA Act. Such actions might include financial penalties, audits, or other enforcement measures intended to ensure adherence to the financial management and accountability standards established by the Act. The maximum penalties for breaches of the FMA Act can include substantial fines and, in severe cases, criminal charges for officials involved in mismanagement or fraud.