EXPLANATORY STATEMENT
Select Legislative Instrument 2005 No. 126
Minute No. of 2005 – Minister for Finance and Administration
Subject – Financial Management and Accountability Act 1997
Financial Management and Accountability Amendment
Regulations 2005 (No. 4)
Subsection 65(1) of the Financial Management and Accountability Act 1997 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribe,d for carrying out or giving effect to the Act.
The Act provides a framework of rules for the proper management of public money and public property that applies to Chief Executives and officials of Agencies.
The Regulations prescribe the Royal Australian Mint for the purposes of the Act.
As a prescribed Agency, the Royal Australian Mint is financially autonomous from the Department of the Treasury and accountable under the Act for the proper management of public money and public property within its control or custody. The establishment of Royal Australian Mint as a prescribed Agency provides a framework for the transparent management of public money and public property and formalises current operating practices.
Further specific details of the Regulations are in the Attachment.
The Act specifies no conditions that need to be met before the power to make the Regulations was exercised.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Department of the Treasury was consulted in the preparation of the proposed Regulations, in accordance with section 17 of the Legislative Instruments Act 2003.
The Regulations commenced on 1 July 2005.
Authority: Subsection 65(1) of the Financial Management and Accountability Act 1997.
ATTACHMENT
Details of the proposed Financial Management and Accountability Amendment Regulations 2005 (No. 4)
Regulation 1 - Name of Regulations
This regulation provides that the title of the Regulations is the Financial Management and Accountability Amendment Regulations 2005 (No. 4).
Regulation 2 - Commencement
This regulation provides for the Regulations to commence on 1 July 2005.
Regulation 3 - Amendment of Financial Management and Accountability Regulations 1997
This regulation provides that the Financial Management and Accountability Regulations 1997 (the Principal Regulations) would be amended as set out in Schedule 1.
Schedule 1 - Amendments
Item [1] – Schedule 1, Part 2, after item 144
Item 145 is inserted to prescribe the Royal Australian Mint. The Royal Australian Mint comprises the Chief Executive Officer; persons engaged under the Public Service Act 1999 who assist the Chief Executive Officer and persons employed under other arrangements to assist the Chief Executive Officer.
Overview
The Financial Management and Accountability Amendment Regulations 2005 (No. 4) were enacted to further refine the governance framework established by the Financial Management and Accountability Act 1997. This legislation was designed to ensure the proper management of public money and public property by government agencies, particularly by prescribing the Royal Australian Mint as an agency subject to the Act’s provisions. The enactment of these regulations aimed to address the need for formalising the operating practices of the Royal Australian Mint, ensuring it operates with financial autonomy from the Department of the Treasury while maintaining accountability for its financial management. These regulations were made under the authority of subsection 65(1) of the Financial Management and Accountability Act 1997 and commenced on 1 July 2005. The objective is to provide a transparent and accountable framework for the management of public assets and funds within the Royal Australian Mint.
Scope and Application
The Financial Management and Accountability Amendment Regulations 2005 (No. 4) extend the application of the Financial Management and Accountability Act 1997 to include the Royal Australian Mint as a prescribed Agency. This means that the Royal Australian Mint, along with its Chief Executive Officer and personnel engaged under the Public Service Act 1999 or other arrangements to assist the Chief Executive, falls under the purview of the Act. The Act governs the proper management of public money and property and holds these entities accountable for their financial activities. The Royal Australian Mint, once prescribed, is financially autonomous from the Department of the Treasury, ensuring a formalised and transparent framework for its operations. These Regulations, which came into effect on 1 July 2005, provide specific details on how the Royal Australian Mint will operate under the Act, formalising its current practices and establishing clear guidelines for its financial management.
Key Provisions
The main operative sections of the Financial Management and Accountability Amendment Regulations 2005 (No. 4) concern the designation of the Royal Australian Mint as a prescribed agency under the Financial Management and Accountability Act 1997 (FMA Act). Regulation 3 specifically amends the Financial Management and Accountability Regulations 1997 to insert a new item, item 145, into Schedule 1, which now includes the Royal Australian Mint among the agencies accountable under the FMA Act. This means the Royal Australian Mint is subject to the same financial management and accountability requirements as other prescribed agencies, including the proper management of public money and public property (Regulation 3).
The obligations imposed on the Royal Australian Mint by virtue of being a prescribed agency under the FMA Act include adherence to the framework of rules governing the management of public money and property. This means the Mint must maintain transparency in its financial operations, ensure proper accounting and reporting practices are in place, and comply with any other requirements specified under the FMA Act (Section 65(1)). The Mint must also operate with financial autonomy from the Department of the Treasury, although it remains accountable for its management of public resources.
Failure to comply with the requirements set out in the FMA Act can result in civil or criminal penalties. Although the exact nature and severity of penalties are not detailed within the Explanatory Statement, breaches of financial management and accountability legislation typically incur significant fines and potential criminal charges for responsible officers. The maximum penalties for breaches can include substantial financial penalties for the entity, as well as personal penalties for individual officers found to be in breach of their duties. These penalties are intended to ensure strict adherence to the statutory requirements for the proper management of public funds.