Commonwealth Numbered Regulations - Explanatory Statements

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FINANCIAL MANAGEMENT AND ACCOUNTABILITY AMENDMENT REGULATIONS 2011 (NO. 5) (SLI NO 219 OF 2011)

EXPLANATORY STATEMENT

Select Legislative Instrument 2011 No. 219

Subject -  Financial Management and Accountability Act 1997

Financial Management and Accountability Amendment Regulations 2011 (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.

Subsection 64(1) of the FMA Act provides for regulations to authorise a Minister to issue guidelines to officials on matters within the Minister's responsibility.

The Regulations amend the Financial Management and Accountability Regulations 1997 (the Principal Regulations) to enable the Minister for Tertiary Education, Skills, Jobs and Workplace Relations to issue guidelines in relation to the tendering of cleaning services for properties occupied by FMA Act Agencies (to be called Commonwealth Cleaning Services Guidelines).

Further details of the amendments are set out in the Attachment.

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 consulted with the Department of Education, Employment and Workplace Relations and the Procurement Consultation Committee comprising industry, union and community stakeholders on the development of the Regulations.

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 apply only to FMA Act Agencies, and do not affect the private sector.

The Regulations commence on the day after the Regulations are registered on the Federal Register of Legislative Instruments.

Authority:       Subsection 65(1) of the Financial Management and Accountability Act 1997

ATTACHMENT

Details of the proposed Financial Management and Accountability Amendment Regulations 2011 (No. 5)

Regulation 1 - Name of Regulations

This regulation provides that the title of the amendment Regulations is the Financial Management and Accountability Amendment Regulations 2011 (No. 5), as made under section 65 of the Financial Management and Accountability Act 1997 (FMA Act).

Regulation 2 - Commencement

This regulation provides that the amendment Regulations commenced on the day after they were registered on the Federal Register of Legislative Instruments. Any guidelines made as a result of this amendment could therefore take effect on a day they are registered in accordance with the Legislative Instruments Act 2003, providing that day is on or after the day that the proposed Regulations commence.

Regulation 3 - Amendment of the Financial Management and Accountability Regulations 1997

This regulation provides that the Financial Management and Accountability Regulations 1997 (the Principal Regulations) were amended as set out in Schedule 1.

Schedule 1 - Amendments

Item [1] - regulation 7B

This item would add a new regulation 7B to Part 4 (Commitments to spend public money) of the FMA Regulations.

New regulation 7B enables the Minister for Tertiary Education, Skills, Jobs and Workplace Relations to make the Commonwealth Cleaning Services Guidelines (the Guidelines) in relation to the tendering of cleaning services for properties occupied by FMA Act Agencies.  The purpose of the Guidelines ensures better wages for employees in the cleaning industry.

The Guidelines are one part of broader reforms in relation to the cleaning industry.  Other conditions such as occupational health and safety requirements for the cleaning industry will be set out in the Fair Work Principles and the Best Practice Measure.  The purpose of the Guidelines is to complement these other requirements by establishing the Government's expectations for the procurement of cleaning services by FMA Act Agencies.

New subregulation 7B(1) enables the Minister for Tertiary Education, Skills, Jobs and Workplace Relations to make the Guidelines.

Any guidelines made under new regulation 7B can only apply to the procurement of cleaning services, as subsection 64(1) of the FMA Act only permits guidelines to be made on matters about which regulations may be made under the FMA Act (for example, the commitment to spend public money).  Subsection 64(2) of the FMA Act provides that any guidelines made under new regulation 7B cannot create offences or impose penalties.

Subsection 64(3) of the FMA Act provides that Guidelines made under new subregulation 7B(1) are a non-disallowable legislative instrument that will not be subject to the sunsetting requirements in the Legislative Instruments Act 2003.  Guidelines made can take effect on, or after, the day they are registered in accordance with the Legislative Instruments Act 2003, providing that day is on or after the day that regulation 7B commenced.

New subregulation 7B(2) clarifies that officials in FMA Act Agencies who conduct a tender for cleaning services for a property occupied by the Agency must act in accordance with the Guidelines.  Those officials must also have regards to any other relevant laws, guidelines or policies (for example the Commonwealth Procurement Guidelines).

The Commonwealth Cleaning Services Guidelines are being developed following extensive consultation with the Procurement Consultation Committee (PCC) that was established with the introduction of the Fair Work Principles. The PCC, comprising of industry, union and community stakeholders provided views to the Procurement Coordinator on procurement policy issues and that are influential in formulating the Commonwealth Cleaning Services Guidelines and Best Practice Measures.

The Department of Education, Employment and Workplace Relations and the Department of Finance and Deregulation have also collaborated on the development of the Regulations to ensure effective implementation of the policy for FMA Act agencies.

Item [2] and [3] - Part 5 (Relevant Agency Receipts) and regulation 15 (Relevant Agency Receipts)

These items substitute the headings to Part 5 (Relevant Agency receipts) and regulation 15 (Relevant Agency receipts) of the FMA Regulations with the heading "Prescribed receipts that an Agency may retain".  These headings have been adjusted to reflect a change to the heading of section 31 of the FMA Act that was made by the Financial Framework Legislation Amendment Act 2010.  That amendment changed the heading for section 31 from "Relevant Agency receipts" to "Retaining prescribed receipts".

Item [4] - regulation 28A (Non-application of relevant regulations to operational money)

This item amends regulation 28A (Non-application of relevant regulations to operational money) to clarify that Guidelines made under new regulation 7B do not apply to intelligence or security agencies or other law enforcement agencies prescribed under Schedule 3 of the FMA Regulations. The exemption of these agencies from Commonwealth Cleaning Services Guidelines is consistent with arrangements currently in the FMA Regulations that these agencies are not required to comply with:

*         Commonwealth Procurement Guidelines made under regulation 7;

*         Commonwealth Grants Guidelines made under regulation 7A; and

*         Fraud Control Guidelines made under regulation 16A.

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