EXPLANATORY STATEMENT
Select Legislative Instrument 2010 No. 114
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Financial Management and Accountability Amendment Regulations 2010 (No. 2)
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 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 58 of the FMA Act provides that the application of the FMA Act to a law enforcement agency that is prescribed by the Financial Management and Accountability Regulations 1997 (the Principal Regulations), is subject to any modifications to the Act that are prescribed by the Principal Regulations. Modifications to the Act are set out in Schedule 2 of the Principal Regulations.
The Amendment Regulations prescribed the Australian Commission for Law Enforcement Integrity (ACLEI) for the purposes of section 58 of the FMA Act thereby subjecting ACLEI to the modifications to the FMA Act set out in Schedule 2 to the Principal Regulations.
The modifications to the FMA Act set out in Schedule 2 to the Principal Regulations provide that certain public money administered by a prescribed law enforcement agency may be deposited in a bank account that is not an official account. The modifications also provide that a prescribed law enforcement agency’s annual financial statements must be prepared in accordance with an agreement between the Finance Minister and the Minister responsible for the agency.
The Amendment Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
In accordance with section 17 of the Legislative Instruments Act 2003, consultation was undertaken with the Attorney-General’s Department.
The Amendment Regulations commence on 1 July 2010.
Overview
The Financial Management and Accountability Amendment Regulations 2010 (No. 2) were enacted to address the need for specific regulatory provisions under the Financial Management and Accountability Act 1997 (FMA Act) concerning the Australian Commission for Law Enforcement Integrity (ACLEI). This legislative instrument was issued by the Minister for Finance and Deregulation under the authority granted by subsection 65(1) of the FMA Act, which empowers the Governor-General to make regulations necessary for implementing the Act. The primary objective of these regulations is to subject ACLEI to modifications outlined in Schedule 2 of the Financial Management and Accountability Regulations 1997, ensuring that certain public monies administered by ACLEI can be deposited in a non-official bank account and that the agency's annual financial statements are prepared according to an agreement between the relevant ministers. These regulations aim to enhance the financial management practices within ACLEI in line with broader public sector standards, while also consulting with the Attorney-General’s Department as mandated by section 17 of the Legislative Instruments Act 2003. The Amendment Regulations came into effect on 1 July 2010.
Scope and Application
The Financial Management and Accountability Amendment Regulations 2010 (No. 2) amends the Financial Management and Accountability Act 1997 (FMA Act) by subjecting the Australian Commission for Law Enforcement Integrity (ACLEI) to specific modifications outlined in the Financial Management and Accountability Regulations 1997. These modifications to the FMA Act, detailed in Schedule 2 of the Principal Regulations, allow for certain public money administered by ACLEI to be deposited in a bank account that is not an official account, and require ACLEI’s annual financial statements to be prepared in accordance with an agreement between the Finance Minister and the Minister responsible for ACLEI. The regulations apply to ACLEI as a prescribed law enforcement agency, thereby incorporating the specified changes to the financial management and accountability framework for this entity. The regulations also extend the application of the FMA Act to ACLEI, ensuring it adheres to the same financial management standards as other prescribed agencies, with the specified modifications addressing particular operational needs of law enforcement agencies.
Key Provisions
The Financial Management and Accountability Amendment Regulations 2010 (No. 2) primarily amend the Financial Management and Accountability Regulations 1997 (FMA Regulations) by prescribing the Australian Commission for Law Enforcement Integrity (ACLEI) as a prescribed law enforcement agency for the purposes of section 58 of the Financial Management and Accountability Act 1997 (FMA Act). This prescription subjects ACLEI to the modifications to the FMA Act as set out in Schedule 2 to the FMA Regulations. Under these modifications, certain public money administered by a prescribed law enforcement agency, such as ACLEI, may be deposited in a bank account that is not an official account. Furthermore, the annual financial statements of a prescribed law enforcement agency must be prepared in accordance with an agreement between the Minister for Finance and the Minister responsible for the agency.
These regulations impose specific obligations on ACLEI and other prescribed law enforcement agencies in managing public funds. They must ensure that the public money they administer can be deposited in a non-official bank account, provided it adheres to the agreed terms outlined in the FMA Act and the FMA Regulations. Additionally, these agencies must prepare their annual financial statements in line with the agreement between the relevant ministers, ensuring transparency and accountability in financial reporting. This involves meticulous record-keeping and adherence to the standards set forth in the FMA Act and the FMA Regulations.
Failure to comply with the provisions of the FMA Act and the FMA Regulations can lead to significant legal consequences. Breaches of these regulations can result in both civil and criminal penalties. Civil penalties may include fines, which can be substantial, depending on the nature and severity of the breach. Criminal penalties can include imprisonment, reflecting the seriousness of non-compliance with financial management regulations. The exact penalties are determined based on the specific provisions of the FMA Act and can vary, but they are designed to ensure strict adherence to financial management standards.