EXPLANATORY STATEMENT
Select Legislative Instrument 2010 No. 259
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. 5)
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 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 currently prescribed in Schedule 1 to the Financial Management and Accountability Regulations 1997 (the Principal Regulations).
The Governor-General in Council made an Executive Order establishing the Australian Agency for International Development (AusAID) as an Executive Agency under the Public Service Act 1999, with the Order commencing on 8 July 2010.
The Regulations amended Schedule 1 of the Principal Regulations to reflect AusAID’s new status as an Executive Agency. The Regulations also added AusAID to the list of Executive Agencies in Note A to Part 1 of Schedule 1 to the Principal Regulations.
The FMA Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.
In accordance with section 17 of the Legislative Instruments Act 2003, consultation was undertaken with the Department of Prime Minister and Cabinet, and AusAID within the Department of Foreign Affairs and Trade portfolio.
The Office of Best Practice Regulation also advised that a Regulatory Impact Statement is not necessary as the amendments are likely to have no or low regulatory impacts on business and individuals or the economy.
The amending Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations commenced on the day after registration on the Federal Register of Legislative Instruments.
Overview
The Financial Management and Accountability Amendment Regulations 2010 (No. 5) were introduced to update the Financial Management and Accountability Regulations 1997 in response to the establishment of the Australian Agency for International Development (AusAID) as an Executive Agency under the Public Service Act 1999. Enacted by the Governor-General in Council, these amendments ensure that AusAID is appropriately recognised within the framework of the Financial Management and Accountability Act 1997. The primary objective of these Regulations is to align the legislative framework with the new administrative status of AusAID, thereby maintaining consistency and effectiveness in the management of public funds and property. The amendments were made following consultations with relevant departments and based on the advice that no significant regulatory impacts would result from these changes.
Scope and Application
The Financial Management and Accountability Amendment Regulations 2010 (No. 5) provide specific amendments to the Financial Management and Accountability Regulations 1997, reflecting the establishment of the Australian Agency for International Development (AusAID) as an Executive Agency under the Public Service Act 1999. These Regulations apply to AusAID and other prescribed agencies as defined in the Financial Management and Accountability Act 1997 (FMA Act). The amendments ensure that AusAID is included in the list of prescribed agencies within the FMA Act framework, thereby subjecting it to the proper management of public money and public property as stipulated by the Act. The scope of the Regulations extends to all entities prescribed under the FMA Act, ensuring consistent application of financial management standards across all specified agencies, including AusAID. There are no stated exclusions or exemptions in these Regulations, and they operate within the national jurisdiction of Australia, providing a uniform approach to financial accountability across federal agencies. The Regulations are subordinate instruments that extend the application of the FMA Act to newly prescribed agencies, ensuring they comply with the established financial management framework.
Key Provisions
The Financial Management and Accountability Amendment Regulations 2010 (No. 5) primarily focus on updating the list of prescribed agencies under the Financial Management and Accountability Act 1997 (FMA Act). Section 65(1) of the FMA Act empowers the Governor-General to issue regulations that prescribe matters required or permitted by the FMA Act, ensuring the proper management of public money and property. In this case, the regulations amend Schedule 1 of the Financial Management and Accountability Regulations 1997 to reflect the new status of the Australian Agency for International Development (AusAID) as an Executive Agency, established by an Executive Order under the Public Service Act 1999. The amendments came into effect on 8 July 2010, aligning with the commencement of the Executive Order.
The obligations imposed by the Regulations on AusAID and other agencies are consistent with the overarching requirements of the FMA Act. This includes adherence to financial management practices, accountability for public funds, and compliance with any additional regulations that may be prescribed by the Governor-General under section 65(1) of the FMA Act. AusAID, as an Executive Agency, must now ensure that its financial management aligns with the updated framework set by the regulations.
Breaches of the provisions within the FMA Act or the Financial Management and Accountability Amendment Regulations 2010 (No. 5) can lead to civil or criminal consequences. Under the FMA Act, violations may result in financial penalties, legal action, or other corrective measures deemed necessary to enforce compliance. The specific penalties for non-compliance are not detailed in the amending regulations themselves but would be governed by the broader provisions of the FMA Act and related legislation. It is important for agencies to understand and comply with the financial management and accountability standards to avoid potential repercussions.