Details of the Financial Management and Accountability Amendment (Public Governance) Regulation 2014

 

Section 1 - Name of Regulation

 

This section provides that the title of the Regulation is the Financial Management and Accountability Amendment (Public Governance) Regulation 2014.

 

Section 2 - Commencement

 

This section provides that the Regulation commences at the same time as Schedule 2 to the Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Act 2014 commences. 

 

Section 3 - Authority

 

This section provides that the Regulation is made under the Financial Management and Accountability Act 1997 (FMA Act).  The section includes a note that the FMA Act will be renamed as the Financial Framework (Supplementary Powers) Act 1997 by Part 1 of Schedule 2 of the Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Act 2014.

 

Section 4 - Schedule(s)

 

This section provides that the Financial Management and Accountability Regulations 1997 (FMA Regulations) is amended as set out in Schedule 1 to the Regulation.

 

Schedule 1 - Amendments

 

Item 1 - Regulation 1

 

This item renames the FMA Regulations as the Financial Framework (Supplementary Powers) Regulations 1997 as a consequence of the renaming of the FMA Act as the Financial Framework (Supplementary Powers) Act 1997 by the Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Act 2014.

 

Item 2 - Regulations 3 and 3A

 

This item repeals Regulations 3 (dealing with Definitions) and 3A (dealing with the meaning of grant) of the FMA Regulations and substitutes an amended definition of 'Act'.  The amended definition reflects the renaming of the FMA Act as the Financial Framework (Supplementary Powers) Act 1997 (FFSP Act).

 

Regulation 3A is no longer required in light of the revised grant arrangements under section 105C of the PGPA Act which enables the issue of grants as non-disallowable legislative instruments by the Finance Minister to ensure that there is commercial certainty in arrangements that are key to the Government's delivery of programmes and services.

 

 

Item 3 - Parts 2 to 5

 

This item repeals Parts 2 to 5 of the FMA Regulations which deal with the following:

*         Agencies (Part 2);

*         Powers of Chief Executives (Part 3);

*         Commitments to spend public money (Part 4); and

*         Prescribed receipts that an Agency may retain (Part 5).

The rules which support the PGPA Act, will continue to prescribe the revised requirements and procedures necessary to give effect to the governance, performance and accountability matters covered by the PGPA Act for these areas.

 

Item 4 - Part 5AA (heading)

 

This item amends the heading for Part 5AA to 'Supplementary powers to make commitments to spend money and be involved in companies etc' to clarify the nature of the powers that have been retained in the FFSP Act.  The amended heading reflects the consolidated structure of the FFSP Act and the reduced scope of the remaining provisions retained under the FFSP Act.

 

Item 5 - Subparagraphs 16(1)(a)(i) and (3)(a)(i)

 

This item amends the references to 'public money' within existing subparagraphs 16(1)(a)(i) and (3)(a)(i) to 'relevant money or other CRF money', consistent with the terminology used under the new PGPA Act.  The inclusion of the concept of 'other CRF money' reflects the scope of the current definition of 'public money' in the FMA Act.

 

Item 6 - Parts 5A and 6

 

This item repeals Parts 5A and 6 which deal with the following:

*         Protection of public money and public property (Part 5A); and

*         Banking of public money etc (Part 6).

These Parts are no longer required as section 55 of the PGPA Act provides revised requirements in relation to the banking of, and dealing with, relevant money by Ministers and officials.  The PGPA Act provides more clarity in relation to responsibilities in relation to dealing with bankable and unbankable money.  Ministerial obligations for banking or dealing with relevant money are now contained in the primary legislation to minimise confusion with directions to officials that are contained in the rules.

 

Item 7 - Part 7 (heading)

 

This item repeals the heading of Part 7 relating to borrowing and investment provisions. 

 

Item 8 - Regulations 21 to 22AA

 

This item repeals Regulations 21 to 22AA, which deal with credit cards and investment of public money, as these are no longer relevant in the context of the PGPA Act. 

 

 

Item 9 - Parts 7A to 8A

 

This item repeals Parts 7A to 8A and substitutes this with 'Part 3 - Transitional and application provisions' to ensure that there are transitional and application provisions in place to provide continuity to existing arrangements that will continue to be retained and preserved despite the application of the amending regulation after its commencement. 

 

New Regulation 23 (definitions) clarifies, that for the transitional and application provisions, the name of the amending regulation is the Financial Management and Accountability Amendment (Public Governance) Regulation 2014 and the commencement time is the time from when this amending regulation commences.

 

New Regulation 24 clarifies that Regulations 7, 7A, 7B and 16A which deal with Commonwealth procurement and guidelines for Commonwealth grants, cleaning services and fraud, which have been repealed but are in force before the commencement of this amending regulation continue to apply for any process that was begun before that time.

 

New Regulation 25 ensures the continuation of repealed Regulation 23 (which deals with the disposal of property found on Commonwealth premises) after the commencement of the amending regulation in relation to property found, or disposals that occur, prior to that time.

 

New Regulation 26 ensures the continuity of Part 11 of the repealed FMA Regulations (which deals with transferring leave entitlements when employees move between Agencies etc.).  This would ensure that the movement of employees that occurs before the commencement time would continue to be dealt with under the provisions of the repealed Part 11 of the FMA Regulations to maintain consistency in the application of the underlying policy.

 

Item 10 - Parts 9 to 11

 

This item repeals Parts 9 to 11 which deal with the modified operation of the FMA Act and relevant regulations (Part 9), Act of grace and probate payments (Part 10) and the transfer of leave entitlements (Part 11) to give effect to the revised arrangements under the provisions of the PGPA Act.

 

Part 9 is no longer required as Part 4-1A of the PGPA Act enables the Finance Minister to make other instruments (relating to procurements, grants, intelligence or security agencies and listed law enforcement agencies) that are not subject to disallowance.  Subsection 105D of the PGPA Act relating to the modification of the PGPA Act, rules and instruments in relation to designated activities of intelligence or security agencies or listed law enforcement agencies, ensures that their operational responsibilities are not compromised and that any determinations made are exempt from the Legislative Instruments Act 2013.  This substantial exemption is being made as determinations would be unsuitable for publication on the Federal Register of Legislative Instruments as they would contain information relating to activities of a national security nature that would be unsuitable for public dissemination.  Existing accountability measures which are in place for these entities will continue to provide oversight in relation to designated activities.

 

 

Part 10 is no longer required as the revised act of grace provisions in the PGPA Act enable the Finance Minister to attach terms and conditions to an act of grace payment and ensure that the authorisation of such a payment is recognised as being administrative in nature rather than legislative and as such not falling within the scope of section 5 of the Legislative Instruments Act.

 

As mentioned under item 9, new Regulation 26 would deal with matters covered under current arrangements by existing Part 11 which is no longer required.

 

Item 11 - Schedules 1, 1A, 2 and 3

 

This item repeals Schedules 1, 1A, 2 and 3 which deal with the following:

*         Prescribed agencies (Schedule 1);

*         Notice of event under section 39A of Act (Schedule 1A);

*         Modification of the Act in its application to an intelligence or security agency or a prescribed law enforcement agency (Schedule 2); and

*         Prescribed law enforcement agencies (Schedule 3).

 

These mechanisms have been replaced under the new financial framework by revised requirements and procedures to give effect to the governance, performance and accountability matters covered by the PGPA Act, the rules and instruments.

 

Schedule 1 to the FMA Regulations is no longer required as a result of the ability under the PGPA Act to list an entity through the rules supporting the PGPA Act or through specific provision in the enabling legislation of an entity.  The arrangements will be different in form from, but consistent with, the current practice under the FMA Regulations.

 

Schedule 1A to the FMA Regulations provides details of the form of a notice under section 39A of the FMA Act.  The Schedule will no longer be required as notices will be made under section 72 of the PGPA Act.

 

Schedules 2 and 3 to the FMA Regulations will no longer be required as Part 4-1A of the PGPA Act similarly confers power on the Finance Minister to make instruments in relation to intelligence, security agencies or listed law enforcement agencies.

 

 

 

 

 

 

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Financial Management and Accountability Amendment (Public Governance) Regulation 2014

 

This Regulation is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

 

The Financial Management and Accountability Act 1997 (the 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.  The FMA Act applies to Commonwealth Departments of State and their staff, parliamentary departments and their staff, and prescribed agencies. 

 

The Public Governance, Performance and Accountability Act 2013 (PGPA Act) is scheduled to replace the FMA Act and the Commonwealth Authorities and Companies Act 1997 (CAC Act) as the main legislation covering the financial operations of entities across the Commonwealth.  To support this change, the Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Bill 2014 has been introduced into the Parliament and would repeal the CAC Act and substantially reduce the number of operative provisions in the FMA Act. 

 

The operational provisions of the PGPA Act have been proclaimed to commence on 1 July 2014 if the Acts mentioned in Schedule 1 to the Proclamation all receive the Royal Assent before 1 July 2014, or otherwise, these provisions will commence on 1 January 2015.  The legislation mentioned in the Schedule to the Proclamation comprises:

*         the Public Governance, Performance and Accountability Amendment Act 2014;

*         the Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Act 2014;

*         the Public Governance, Performance and Accountability (Consequential Modifications of Appropriation Acts (No. 1), (No. 3) and (No. 5)) Act 2014;

*         the Public Governance, Performance and Accountability (Consequential Modifications of Appropriation Acts (No. 2), (No. 4) and (No. 6)) Act 2014; and

*         the Public Governance, Performance and Accountability (Consequential Modifications of Appropriation Acts (Parliamentary Departments)) Act 2014.

 

The Financial Management and Accountability Amendment (Public Governance) Regulation 2014 (the amending regulation) will make a number of amendments as a consequence of the commencement of the PGPA Act and include:

*         repealing a number of Parts, headings and Regulations that are no longer required or have substantially changed as a result of the revised policy positions outlined in the PGPA Act, the rules which support the PGPA Act, related instruments and the Appropriation Acts;

*         changing the terminology to reflect the revised definitions and wording used in the PGPA Act, the rules, related instruments and the Appropriation Acts; and

*         incorporating transitional and application provisions to ensure the continuity of the provisions that are being repealed in relation to Commonwealth procurement and guidelines, disposal of property found on Commonwealth premises, and the transfer of leave entitlements, for matters that commenced before the commencement of this amending regulation.

 

Human rights implications

 

The Regulation does not engage any of the applicable rights or freedoms.

 

Conclusion

 

This Regulation is compatible with human rights as it does not raise any human rights issues.

 

 

 

Senator the Hon Mathias Cormann

Minister for Finance