FINANCIAL MANAGEMENT AND ACCOUNTABILITY ACT 1997

This Guide aims to give you a general overview of the matters covered by this Act. It also gives you some information about the way this Act is organised.

The main purpose of this Act is to provide a framework for the proper management of public money and public property. Public money and public property are defined in section 5. Broadly, those terms refer to money or property that is owned or held by the Commonwealth, including money or property held on trust.

This Act contains rules about how public money and property are to be dealt with. Many of the detailed rules are in regulations made under section 65.

Many of the rules in this Act apply to officials of Agencies and to Chief Executives of Agencies. Agency , official and Chief Executive are defined in section 5.

Part 1 Preliminary : This Part deals with the commencement of this Act, its application to things outside Australia and its application to the Crown.

Part 2 General provisions about definitions : This Part contains definitions of terms that are frequently used throughout this Act and general provisions about notional payments and receipts by Agencies.

Part 3 Collection, custody etc. of public money : This Part deals with the collection and custody of public money. It deals with matters such as banking and liability for loss of public money.

Part 4 Accounting, appropriations and payments : This Part establishes an accounting framework for public money that involves the Consolidated Revenue Fund and Special Accounts. This Part has a number of rules that apply to the adjustment of appropriations in certain circumstances. It also deals with miscellaneous matters such as act of grace payments by the Commonwealth and waiver of debts owing to the Commonwealth.

Part 5 Borrowing, investment and involvement in companies : This Part gives the Finance Minister limited powers to borrow money on behalf of the Commonwealth. It also deals with the investment of public money, and a Minister's obligation to inform the Parliament of the Commonwealth or a prescribed body's involvement in a company.

Part 6 Control and management of public property : This Part has rules about the control and management of public property. It deals with matters such as misapplication of public property and liability for loss of public property.

Part 6A Interjurisdictional agencies : This Part sets out that the regulations may prescribe a Commonwealth agency as an interjurisdictional agency. An interjurisdictional agency involves, jointly, the Commonwealth and participating State and/or Territory jurisdictions in the governance of that agency. This Part also provides that the regulations may set out the obligations on Chief Executives of interjurisdictional agencies.

Part 7 Special responsibilities of Chief Executives : The rules in this Part apply to Chief Executives of Agencies. The rules deal generally with the control and management of public money and public property for which Chief Executives have a management responsibility.

Part 8 Reporting and audit : This Part deals with the preparation and audit of financial statements of the Commonwealth. It also deals with the audit of annual financial statements of Agencies.

Part 9 Miscellaneous : This Part deals with miscellaneous matters such as Finance Minister's Orders, regulations and delegations.

The following Acts are directly relevant to the operation or interpretation of this Act:

The Annual Appropriation Acts appropriate money out of the Consolidated Revenue Fund.

The Auditor-General Act 1997 establishes the office of Auditor-General and sets out the functions of the Auditor-General. It also provides for the appointment of an Independent Auditor to audit the Australian National Audit Office.

The Acts Interpretation Act 1901 contains many general rules about the meaning or effect of many terms and provisions that are commonly used in Commonwealth Acts.

The Commonwealth Authorities and Companies Act 1997 contains reporting, accountability and other rules that apply to Commonwealth authorities and Commonwealth companies (which are separate legal entities to the Commonwealth).

This list is not exhaustive. Acts other than those listed above might also affect the operation or interpretation of this Act.

Contents

Part 1--Preliminary 1

1............ Short title [ see Note 1] ........................................................................ 1

2............ Commencement [ see Note 1] .............................................................. 1

3............ This Act binds the Crown ................................................................... 1

4............ This Act extends to things outside Australia ....................................... 1

Part 2--General provisions about definitions 2

5............ Definitions .......................................................................................... 2

6............ Notional payments and receipts by Agencies ...................................... 4

Part 3--Collection, custody etc. of public money 6

8............ Agreements with banks about receipt, transmission etc. of public money 6

9............ Official bank accounts ......................................................................... 6

10.......... Public money must be promptly banked etc. ....................................... 7

11.......... Public money not to be paid into non-official account ......................... 7

12.......... Receipt and spending of public money by outsiders ........................... 7

13.......... Money not to be withdrawn from official account without authority .. 8

14.......... Misapplication or improper use of public money ................................ 8

15.......... Liability for loss of public money ....................................................... 8

16.......... Special Instructions by Finance Minister about handling etc. of special public money 9

Part 4--Accounting, appropriations and payments 11

Division 1--Accounts and records in relation to public money 11

19.......... Accounts and records in relation to public money ............................. 11

Division 1A--Special Accounts 12

20.......... Establishment of Special Accounts by Finance Minister ................... 12

21.......... Special Accounts established by other Acts ...................................... 13

22.......... Disallowance of determinations relating to Special Accounts ........... 14

Division 2--Drawing rights 15

26.......... Drawing rights required for payment etc. of public money ............... 15

27.......... Issue of drawing rights ..................................................................... 15

Division 3--Appropriations 16

28.......... Repayments by the Commonwealth .................................................. 16

30.......... Repayments to the Commonwealth ................................................... 16

30A....... Appropriations to take account of recoverable GST .......................... 16

31.......... Retaining prescribed receipts ............................................................. 17

32.......... Transfer of Agency functions ........................................................... 18

Division 3A--Recording of amounts in accounts and records 20

32A....... Recording of amounts in accounts and records ................................. 20

Division 4--Miscellaneous 21

33.......... Finance Minister may approve act of grace payments ....................... 21

34.......... Finance Minister may waive debts etc. .............................................. 21

35.......... Set off ............................................................................................... 22

36.......... Presiding Officers may approve expenditure .................................... 23

Part 5--Borrowing, investment and involvement in companies 24

37.......... Unauthorised borrowing agreements are invalid ............................... 24

38.......... Finance Minister may borrow for short periods ................................ 24

39.......... Investment of public money .............................................................. 24

39A....... Minister must inform Parliament of involvement in a company by the Commonwealth or a prescribed body 26

Part 6--Control and management of public property 28

40.......... Custody etc. of securities .................................................................. 28

41.......... Misapplication or improper use of public property ........................... 28

42.......... Liability for loss etc. of public property ............................................ 28

43.......... Gifts of public property ..................................................................... 29

Part 6A--Interjurisdictional agencies 31

43A....... Interjurisdictional agencies ................................................................ 31

Part 7--Special responsibilities of Chief Executives 32

44.......... Promoting proper use of Commonwealth resources ......................... 32

44A....... Keeping responsible Minister and Finance Minister informed .......... 32

45.......... Fraud control plan ............................................................................. 33

46.......... Audit committee ................................................................................ 33

47.......... Recovery of debts ............................................................................. 33

48.......... Accounts and records ........................................................................ 33

49.......... Annual financial statements ............................................................... 34

50.......... Additional financial statements .......................................................... 34

51.......... Reporting requirements if Agency ceases to exist or Agency functions are transferred 34

52.......... Chief Executive's instructions ........................................................... 35

53.......... Chief Executive may delegate powers ............................................... 35

Part 8--Reporting and audit 37

54.......... Finance Minister must publish monthly financial statements ............ 37

55.......... Preparation of annual statements by Finance Minister ...................... 37

56.......... Audit of Finance Minister's annual financial statements ................... 37

57.......... Audit of annual financial statements of Agency ................................ 38

Part 9--Miscellaneous 39

58.......... Modifications of Act for intelligence or security agency or prescribed law enforcement agency 39

60.......... Misuse of Commonwealth credit card ............................................... 39

62.......... Finance Minister may delegate powers ............................................. 40

62A....... Treasurer may delegate powers ......................................................... 40

63.......... Finance Minister's Orders ................................................................ 41

64.......... Guidelines by Ministers .................................................................... 41

65.......... Regulations ....................................................................................... 41

Notes 43

Commonwealth Consolidated Acts

FINANCIAL MANAGEMENT AND ACCOUNTABILITY ACT 1997 - PREAMBLE