EXPLANATORY STATEMENT
Select Legislative Instrument 2008 No. 143
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Financial Management and Accountability Amendment Regulations 2008 (No. 3)
The Financial Management and Accountability Act 1997 (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 in Council may make regulations prescribing matters required or permitted by the FMA Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the FMA Act.
Section 5 of the FMA Act provides that for the purposes of the FMA Act, a prescribed Agency means a body, organisation or group of persons prescribed by the regulations for the purposes of that definition. Agencies are prescribed in Schedule 1 to the Financial Management and Accountability Regulations 1997 (the Principal Regulations).
The Amendment Regulations prescribed the Australian Fisheries Management Authority (AFMA).
The governance arrangements of AFMA were modified by the Fisheries Legislation Amendment (New Governance Arrangements for the Australian Fisheries Management Authority and Other Matters) Act 2008 (Fisheries Act), and involved a move from the Commonwealth Authorities and Companies Act 1997 (CAC Act) to the FMA Act. Consequently, AFMA was prescribed under the FMA Act.
The Amendment Regulations also omitted the Office of Workplace Services from note A to Schedule 1 Part 1 of the Principal Regulations. Note A indicates which agencies are also executive agencies established under section 65 of the Public Service Act 1999. The Office of Workplace Services has been abolished as an executive agency and as a prescribed agency.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003 (LI Act). In accordance with section 17 of the LI Act, in relation to prescribing AFMA the Department of Agriculture, Forestry and Fisheries and AFMA was consulted. External consultation did not occur due to the regulation only affecting government agencies.
Schedule 1 and regulations 1 to 3 to the Amendment Regulations commenced the day after they are registered. Schedule 2 and regulation 4 commenced upon the commencement of Schedule 1 to the Fisheries Act.
Overview
The Financial Management and Accountability Amendment Regulations 2008 (No. 3) were introduced to amend the Financial Management and Accountability Regulations 1997, which are subsidiary legislation under the Financial Management and Accountability Act 1997 (FMA Act). Enacted by the Australian Parliament, this legislation was created to establish a framework for the effective management of public money and property by officials and Chief Executives of prescribed agencies. The 2008 Amendment Regulations specifically addressed the incorporation of the Australian Fisheries Management Authority (AFMA) under the FMA Act, following the governance changes enacted by the Fisheries Legislation Amendment (New Governance Arrangements for the Australian Fisheries Management Authority and Other Matters) Act 2008. Furthermore, the regulations also omitted the Office of Workplace Services from the list of executive agencies established under the Public Service Act 1999, reflecting its abolition. The policy objective of these amendments is to ensure the financial management practices of these agencies align with the overarching framework provided by the FMA Act.
Scope and Application
The Financial Management and Accountability Amendment Regulations 2008 (No. 3) extend the application of the Financial Management and Accountability Act 1997 (FMA Act) to include the Australian Fisheries Management Authority (AFMA) as a prescribed agency. This amendment reflects the transition of AFMA's governance arrangements from the Commonwealth Authorities and Companies Act 1997 to the FMA Act, as mandated by the Fisheries Legislation Amendment (New Governance Arrangements for the Australian Fisheries Management Authority and Other Matters) Act 2008. The regulations also remove the Office of Workplace Services from the list of agencies in the Financial Management and Accountability Regulations 1997, reflecting its abolition as an executive agency and a prescribed agency. The regulations, as a legislative instrument, adhere to the requirements of the Legislative Instruments Act 2003, with consultation conducted with relevant departments and agencies, though external consultation was deemed unnecessary due to the limited impact on the public. The commencement of these regulations aligns with the schedule outlined in the Fisheries Act, ensuring a seamless integration of AFMA within the FMA Act framework.
Key Provisions
The Financial Management and Accountability Amendment Regulations 2008 (No. 3) include several key provisions that prescribe agencies under the Financial Management and Accountability Act 1997 (FMA Act). Most notably, these regulations prescribe the Australian Fisheries Management Authority (AFMA) as an agency under the FMA Act (Reg. 2). This prescription means that AFMA is now subject to the rules and requirements of the FMA Act for the proper management of public money and public property, which is a significant shift from its previous governance under the Commonwealth Authorities and Companies Act 1997 (Reg. 1).
Under these regulations, AFMA, along with any other prescribed agencies, must adhere to specific obligations and requirements set out in the FMA Act. These include the establishment of robust financial management systems, the preparation and presentation of financial reports, and adherence to the Act's requirements for the protection and proper use of public money and property (s. 5). Agencies are expected to implement internal controls and compliance mechanisms to ensure that they operate within the legal and financial frameworks established by the FMA Act. The regulations also necessitate that agencies maintain proper records and documentation to support their financial activities and ensure transparency and accountability in their operations (s. 5).
Failure to comply with the provisions of the FMA Act can lead to various consequences. The Act includes provisions for both civil and criminal penalties for breaches. Civil penalties can include fines up to $10,500 for individuals and $52,500 for bodies corporate, depending on the severity of the breach (s. 16). In addition to fines, individuals found guilty of serious breaches may face criminal penalties, including imprisonment for up to two years. These penalties underscore the importance of adhering to the regulations and the serious consequences that can arise from non-compliance (s. 16). The regulations ensure that agencies like AFMA are held accountable for their financial management practices and that there are clear repercussions for failing to meet the standards set out in the FMA Act.