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COMMONWEALTH AUTHORITIES AND COMPANIES AMENDMENT REGULATIONS 2009 (NO. 2) (SLI NO 100 OF 2009)
Select Legislative Instrument 2009 No. 100n
Issued by the Authority of the Minister for Finance and Deregulation
Commonwealth Authorities and Companies Act 1997
Commonwealth Authorities and Companies Amendment Regulations 2009 (No. 2)
The Commonwealth Authorities and Companies Act 1997 (the CAC Act) contains reporting, accountability and other rules for Commonwealth authorities and Commonwealth companies.
Subsection 49(1) of the CAC Act provides that the Governor-General may make regulations prescribing matters required or permitted by the CAC Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the CAC Act.
The Regulations amend the Commonwealth Authorities and Companies Regulations 1997 (the Principal Regulations) to:
· prescribe the requirements for the use of credit cards and credit vouchers by Commonwealth authorities that do not have an express borrowing provision in their enabling legislation;
· empower all Commonwealth authorities to authorise persons to pay claims that include official and coincidental private expenditure on a Commonwealth authority credit card or credit voucher;
· remove Health Services Australia Limited (HSA) from the list of government business enterprises (GBEs); and
· remove the Telstra Sale Company Limited (TSCL) from the list of Commonwealth companies for which the Finance Minister is responsible.
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 (Finance) has consulted with Departments of State, the Director of Public Prosecutions (DPP), the Australian Federal Police (AFP) and Commonwealth authorities on the development of the amendments contained in the Regulations. All 33 replies Finance received supported these amendments. In particular, the DPP approved of the exceptions in regulations 6AD and 6AE.
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 Commonwealth authorities under the CAC Act, and do not affect the private sector.
Regulations 1 to 3 and Schedule 1 commence on the day after the Regulations are registered on the Federal Register of Legislative Instruments. Schedule 2 commences upon the commencement of item 42 of Schedule 1 of the Commonwealth Authorities and Companies Amendment Act 2008. A proclamation was made by the Governor-General on 14 May 2009 fixing the commencement date of item 42 as 1 July 2009.
Details of the Commonwealth Authorities and Companies Amendment Regulations 2009 (No. 2)
Regulation 1 – Name of Regulations
This regulation provides that the title of the Regulations is the Commonwealth Authorities and Companies Amendment Regulations 2009 (No. 2).
This regulation provides for the commencement of the Regulations as follows:
· Regulations 1 to 3 and Schedule 1 commence on the day after the Regulations are registered on the Federal Register of Legislative Instruments;
· Schedule 2 commence upon the commencement of item 42 of Schedule 1 to the Commonwealth Authorities and Companies Amendment Act 2008.
Regulation 3 – Amendment of Commonwealth Authorities and Companies Regulations 1997
This regulation provides that Schedules 1 and 2 amend the Principal Regulations.
Section 5 of the CAC Act defines a government business enterprise (GBE) as a Commonwealth authority or Commonwealth company prescribed by the regulations for the purpose of the definition.
Item  amends regulation 4 to omit Health Services Australia Limited (HSA) from the list of GBEs. HSA ceased meeting the definition of GBE when it became a subsidiary of Medibank Private Limited on 1 April 2009.
Section 5 of the CAC Act defines the responsible Minister for a Commonwealth company as the Minister who is prescribed by the regulations as the Minister responsible for the company, or if no Minister is prescribed – the Minister who is responsible for the company.
Item  amends regulation 4A to omit the Telstra Sale Company Limited (TSCL) from the list of Commonwealth companies for which the Finance Minister is prescribed as the responsible Minister. TSCL is winding down and it is being deregistered as a company under the Corporations Act 2001. Until deregistration, the Finance Minister will still be the responsible Minister due to the operation of subparagraph (b)(ii) of the definition of responsible Minister in CAC Act, where this term is defined as ‘the Minister who is responsible for the company.’
This amendment states, for clarity, that the terms ‘Commonwealth authority credit card’ and ‘Commonwealth authority credit voucher’ have the same meanings as in subsection 28B(4) of the CAC Act.
Item  inserts regulations 6AA to 6AE into the Principal Regulations.
Use of credit cards and credit vouchers by Commonwealth authorities
Subsection 28A(1) of the CAC Act allows a Commonwealth authority to obtain cash, goods or services by use of a credit card or credit voucher. Subsection 28A(2) of the CAC Act provides that the regulations may prescribe requirements in relation to a Commonwealth authority’s credit cards or credit vouchers.
Regulations 6AA, 6AB and 6AC are designed to set minimum requirements for a Commonwealth authority on using credit cards and vouchers where the Commonwealth authority’s borrowing power comes from section 28A of the CAC Act. The regulations have been prepared with regard to similar requirements under the Financial Management and Accountability Act 1997 (FMA Act) and the recommendations in Australian National Audit Office Audit Report No. 37 of 2007-08 – Management of Credit Cards.
The Regulations also give the directors of a Commonwealth authority the power to make guidelines on the use of credit cards and credit vouchers. This helps ensure directors have flexibility in deciding how their authority uses credit cards and credit vouchers.
In summary, under regulations 6AA and 6AB:
· an agreement between a Commonwealth authority and credit provider must be in writing;
· the card or voucher holder is responsible for the physical security and ensuring the card or voucher is used for the purpose for which it is provided;
· the authority’s directors can place limits on the amount that may be borrowed on the card or voucher;
· the authority’s directors must keep records of cards and vouchers issued and transactions undertaken; and
· the authority’s directors may make guidelines in relation to the cards and vouchers that are consistent with the CAC Act and Principal Regulations. Guidelines might cover issues such as the approvals required to use credit, reconciling credit statements, internal audits and training on credit use.
Regulation 6AC gives the directors of an authority the power to determine who is authorised to use a credit card or voucher. This power can be delegated to a senior manager of the authority. “Senior manager” is defined in section 5 of the CAC Act to mean (subject to certain excluded persons):
· a person who makes, or participates in making, decisions that affect the whole, or a substantial part, of the operations of the authority; or
· a person who has the capacity to affect significantly the authority’s financial standing.
Regulations 6AA, 6AB and 6AC only apply to Commonwealth authorities relying on subsection 28A(1) of the CAC Act for their capacity to use credit cards and credit vouchers. These regulations would not apply to Commonwealth authorities that have an express borrowing power under their enabling legislation. More generally, the legislative arrangements also help clarify that Commonwealth authorities have no power to borrow unless:
· they use the credit card borrowing power under section 28A of the CAC Act; or
· their enabling legislation includes an express power to borrow.
Exception to the offence of misusing a credit card or credit voucher
Subsection 28B(1) of the CAC Act makes it an offence to misuse a Commonwealth authority credit card or credit voucher. Subsection 28B(2) states that subsection 28B(1) does not apply to a particular use of a Commonwealth authority credit card or credit voucher if the use is authorised by the regulations and the authority is reimbursed in accordance with the regulations.
Regulations 6AD and 6AE allow the directors of all Commonwealth authorities to authorise the payment by a Commonwealth authority credit card or credit voucher of a claim that includes both official and coincidental private expenditure. For example, private expenses such as telephone charges may be authorised for inclusion in accommodation charges for official travel to avoid the practical problems of separate billing arrangements. Where such an arrangement is authorised, the credit card holder must repay the private expense to the Commonwealth authority in accordance with the authority’s policies. The regulations mirror similar regulations for agencies under the FMA Act.