EXPLANATORY STATEMENT
Select Legislative Instrument 2010 No. 172
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Financial Management and Accountability Legislation Amendment Regulations 2010 (No. 1)
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.
The Regulations retrospectively insert a sunset provision into two Amendment Regulations tabled in 2009, the:
- Financial Management and Accountability Amendment Regulations 2009 (No. 2) (FMA Amendment Regulations 2009 No. 2); and
- Financial Management and Accountability Amendment Regulations 2009 (No. 4) (FMA Amendment Regulations 2009 No. 4);
that dealt with transitional issues, and preserved the operation of acts done, and instruments made, under the authority of the then FMA Act, Financial Management and Accountability Regulations 1997, Financial Management and Accountability Orders 2005 and the Financial Management and Accountability Orders 2008 that were in place, or had applicable savings‑provisions, before the commencement of the FMA Amendment Regulations 2009 No. 2 and FMA Amendment Regulations 2009 No. 4.
Commencement
Schedule 1 amends the FMA Amendment Regulations 2009 No. 2 to insert a sunset provision from 19 March 2009 for the transitional arrangements to cease to apply on 1 July 2010. Schedule 2 amends the FMA Amendment Regulations 2009 No. 4 to insert a sunset provision from 30 June 2009 for the transitional arrangements to cease to apply on 1 July 2010.
FMA Act Agencies have been consulted on removing these transitional arrangements. The transitional provisions provided time for FMA Act Agencies to update internal procedures and controls before the full effect of the FMA Amendment Regulations 2009 No. 2 and FMA Amendment Regulations 2009 No. 4 commenced. FMA Act Agencies have had over 12 months to update their internal procedures and controls and the savings and transitional provisions can now cease to apply.
FMA Act Agencies are not adversely affected by retrospectively inserting a sunset provision with a future date of 1 July 2010.
Legislative Instruments Act 2003
The 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, the Department of Finance and Deregulation has consulted with FMA Act Agencies on the development of the Regulations.
Best Practice Regulation Preliminary Assessment
A Best Practice Regulation Preliminary Assessment was undertaken in accordance with the guidance issued by the Office of Best Practice Regulation. This assessment indicated that a regulation impact statement was not required, as the Regulations only affect FMA Act Agencies, and do not affect the private sector.
Overview
The Financial Management and Accountability Legislation Amendment Regulations 2010 (No. 1), issued under the authority of the Minister for Finance and Deregulation, were enacted to amend the Financial Management and Accountability Amendment Regulations 2009 (No. 2) and (No. 4). These amendments address transitional arrangements that were previously established to allow FMA Act Agencies sufficient time to adjust their internal procedures and controls following the introduction of the Financial Management and Accountability Amendment Regulations 2009 (No. 2) and (No. 4). As per the Financial Management and Accountability Act 1997, the regulations aim to ensure that public money and property are managed appropriately by the Chief Executives and officials of FMA Act Agencies. Given that these transitional provisions have been in effect for over twelve months, the insertion of a sunset clause allows the transitional arrangements to cease on 1 July 2010, thereby streamlining the regulatory framework and reducing any potential administrative burden on the agencies involved.
Scope and Application
The Financial Management and Accountability Legislation Amendment Regulations 2010 (No. 1) apply to entities governed by the Financial Management and Accountability Act 1997 (FMA Act), specifically FMA Act Agencies, which encompass Chief Executives and officials of public entities responsible for the management of public money and property. These Regulations address transitional issues by setting a sunset provision for two sets of Amendment Regulations tabled in 2009, namely the Financial Management and Accountability Amendment Regulations 2009 (No. 2) and the Financial Management and Accountability Amendment Regulations 2009 (No. 4). The sunset provision mandates that the transitional arrangements under these Regulations cease to apply from 1 July 2010. The Regulations aim to provide FMA Act Agencies with sufficient time to update their internal procedures and controls before the full effect of the aforementioned Amendment Regulations commences. By setting this retrospective sunset date, the Regulations ensure that FMA Act Agencies are not adversely affected, as they have had over twelve months to adjust to the changes, thereby allowing the savings and transitional provisions to cease without causing operational disruptions.
Key Provisions
The Financial Management and Accountability Legislation Amendment Regulations 2010 (No. 1) (the Regulations) primarily amend two existing sets of regulations from 2009: the Financial Management and Accountability Amendment Regulations 2009 (No. 2) (FMA Amendment Regulations 2009 No. 2) and the Financial Management and Accountability Amendment Regulations 2009 (No. 4) (FMA Amendment Regulations 2009 No. 4). These 2009 regulations initially dealt with transitional issues for the FMA Act Agencies in response to the changes made by the Financial Management and Accountability Amendment Regulations 2009 No. 2 and FMA Amendment Regulations 2009 No. 4. The Regulations introduce sunset provisions to these transitional arrangements, effectively setting a date for these provisions to cease. Specifically, Schedule 1 of the Regulations inserts a sunset provision into the FMA Amendment Regulations 2009 No. 2, which will terminate the transitional arrangements from 19 March 2009 on 1 July 2010. Similarly, Schedule 2 inserts a sunset provision into the FMA Amendment Regulations 2009 No. 4, terminating the transitional arrangements from 30 June 2009 on the same date.
The obligations and requirements imposed by these Regulations focus on ensuring that the FMA Act Agencies have sufficient time to adjust their internal procedures and controls in light of the changes introduced by the 2009 Regulations. By providing over 12 months for this transition, the Regulations aim to facilitate a smooth implementation of the new requirements without adversely affecting the agencies. The sunset provisions, once activated, will ensure that these transitional measures are no longer applicable from 1 July 2010, allowing the FMA Act Agencies to operate under the new regulatory framework without the interim provisions.
Any failure to comply with the requirements set out in the FMA Act and the Regulations could lead to civil or criminal consequences. While the specific offences, penalties, or consequences are not detailed within the explanatory statement, breaches of financial management regulations typically result in significant penalties under Australian law. These could include fines, imprisonment, or other legal actions that depend on the severity of the breach. For instance, serious violations may attract penalties as outlined in the relevant sections of the FMA Act or other related legislation, which can vary widely based on the nature and impact of the breach. The exact penalties would be determined in the context of the specific breach and the provisions of the FMA Act.