Finance Circular
No. 2011/07
Certificate of Compliance – FMA Act Agencies
Key points
This circular:
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
provides advice on the annual Certificate of Compliance process for Financial
Management and Accountability Act 1997 (FMA Act) agencies;
affects all Chief Executives, Chief Financial Officers, audit committees and officials of
FMA Act agencies;
replaces Finance Circular 2009/06: Certificate of Compliance – FMA Act Agencies and
Finance Circular 2005/06: The financial framework—accountability for compliance
and dealing with breaches; and
is available at http://www.finance.gov.au/publications/finance-circulars/index.html.
Contents
Foreword ................................................................................................................................................ 2
Part 1
The Certificate of Compliance Process .................................................................................. 3
1.1
Key Concepts ....................................................................................................................... 4
1.2
Key Steps ............................................................................................................................. 6
1.3
Agency Governance ............................................................................................................ 7
1.4
The Certificate of Compliance ........................................................................................... 10
Part 2
Guidance on Completing the Certificate ............................................................................. 11
2.1
Compliance with the Financial Management Framework ................................................ 12
2.2
Completing the Certificate ................................................................................................ 14
Part 3
Tools and Templates ............................................................................................................ 18
3.1
Certificate of Compliance Letter Template ....................................................................... 19
3.2
The Certificate of Compliance Template .......................................................................... 20
3.3
Appendix A: Non-Compliance Schedule Template ........................................................... 21
3.4
Appendix B: Financial Sustainability Schedule Template .................................................... 22
3.5
Appendix C: List of Special Accounts Template ................................................................ 23
3.6
Special Accounts Checklist ................................................................................................ 24
Part 4
Summary of Compliance Requirements in the FMA Act and Regulations ......................... 25
Part 5
Frequently Asked Questions ................................................................................................ 60
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Foreword
Foreword
This circular provides guidance on the annual Certificate of Compliance (Certificate) process
for FMA Act agencies. The Certificate process is designed to improve compliance with the
Australian Government’s financial management framework and to ensure that Ministers are
kept informed of compliance issues within their portfolios.
Compliance monitoring is one element of the Department of Finance and Deregulation’s
(Finance) broader strategy to improve the quality of public financial management in all
aspects of Commonwealth operations. The Certificate process aims to improve
understanding of the financial management framework, and strengthen agency processes,
through the identification of non-compliance issues and actions taken to improve processes
and compliance. Analysis of Certificate results also provides an opportunity for Finance to
identify issues that are common across agencies, highlighting elements of the framework
that may require improvement.
In 2010 and 2011, the Australian National Audit Office (ANAO) examined the Certificate
process. The ANAO report, Management of the Certificate of Compliance Process in FMA Act
Agencies, tabled on 20 April 2011, states that the Certificate process “has been effective and
... has heightened the focus of agencies on compliance.”
This circular addresses suggestions contained in the Audit Report to improve the guidance
available to agencies on the Certificate process.
This circular is provided in 5 parts. Part 1 provides an overview of responsibilities and
requirements relating to the Certificate. Part 2 contains specific guidance about completing
the Certificate and Part 3 contains tools and templates. Part 4 provides further information
regarding how to report compliance issues. Part 5 contains frequently asked questions,
designed to give practical guidance to agency staff.
The FMA Act, FMA Regulations and related guidance are available on the Finance website at
http://www.finance.gov.au/financial-framework/fma-legislation/index.html.
Questions on the application of the Certificate process should be directed in the first
instance to your Chief Financial Officer area. For questions relating to this Finance Circular,
please contact the Financial Framework Policy Branch at finframework@finance.gov.au.
Kerry Markoulli
Assistant Secretary
Financial Framework Policy Branch
Financial Management Group
December 2011
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Part 1 – The Certificate of Compliance Process
Part 1
The Certificate of Compliance Process
1.1 Key Concepts
p. 4
1.2 Key Steps
p. 6
1.3 Agency Governance
p. 7
1.4 The Certificate of Compliance
p. 10
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1.1 Key Concepts
agency means a Department of State or a Department of the Parliament (including persons
allocated to the Department by the Financial Management and Accountability
Regulations 1997 (FMA Regulations)), or any agency prescribed under the FMA Regulations
(see section 5 of the FMA Act; FMA Regulations 4-5; and Schedule 1 of the FMA Regulations).
allocated official means a person outside the Commonwealth who performs a financial task
and temporarily becomes an official of the FMA Act agency while they are undertaking that
financial task. They are temporarily “allocated” to that agency (see FMA Regulation 4).
As an “allocated official”, they are subject to all the requirements of the financial
management framework that apply to all officials, including the FMA legislation, the policies
of the Commonwealth and the relevant agency’s Chief Executive’s Instructions (CEIs).
If a person outside the Commonwealth is involved with the receipt, custody or payment of
public money under an agreement authorised under section 12 of the FMA Act, they do not
temporarily become an official (i.e. an allocated official), as that task is not a financial task
under FMA Regulation 3.
approver means a Minister or agency Chief Executive (including a Chief Executive’s
delegate). An approver is authorised to consider and approve spending proposals under
FMA Regulation 9. A person may also be authorised to approve proposals to spend public
money under legislation other than the FMA Act (see FMA Regulation 3).
Chief Executive means:
(a) for a prescribed Agency—the person identified by the regulations as the Chief
Executive of the Agency; or
(b) for any other Agency—the person who is the Secretary of the Agency for the
purposes of the Public Service Act 1999 or the Parliamentary Service Act 1999.
financial task means a task or procedure relating to the commitment, spending,
management or control of public money. It does not include a task or procedure that is
performed by a person outside the Commonwealth under an arrangement or agreement
authorised under section 12 of the FMA Act (see FMA Regulation 3 and section 12 of the
FMA Act).
official means a person who is in an agency or is part of an agency (see section 5 of the
FMA Act). This includes an individual who is allocated to an agency, including those
temporarily allocated (i.e. an allocated official).
outsider means any person other than the Commonwealth, a Minister or an official (see
section 12 of the FMA Act). For example, a contractor or consultant (including a company)
involved in an arrangement with the Commonwealth for the provision of goods or services,
such as administrative or management services undertaken for the Commonwealth, may be
an outsider.
proper use means efficient, effective, economical and ethical use that is not inconsistent
with the policies of the Commonwealth (see section 44 of the FMA Act). While the FMA Act
and Regulations do not define the terms efficient, effective, economical and ethical, it is
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useful to note that the Australian National Audit Office (ANAO) defines:
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efficiency as maximising the ratio of outputs to inputs;
effectiveness as the extent to which intended outcomes were achieved; and
economy as minimising cost.
public money means:
a) money in the custody or under the control of the Commonwealth; or
b) money in the custody or under the control of any person acting for or on behalf
of the Commonwealth in respect of the custody or control of the money;
including such money that is held on trust for, or otherwise for the benefit of, a person other
than the Commonwealth (see section 5 of the FMA Act).
Public money includes Australian currency, foreign currency and cheques in any currency.
Public money can be appropriated by Parliament and is raised by or on behalf of the
Commonwealth through taxes, borrowings, loan repayments, rebates, levies, fees and other
means. Money held on trust by the Commonwealth and money found on Commonwealth
premises is also public money.
The FMA Act and Regulations apply to all money held or controlled by FMA Act agencies,
irrespective of whether the money is provided through the Federal Budget, a special
appropriation or raised by the agency, such as through cost recovery.
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Part 1.2 – Key Steps
1.2 Key Steps
1.
2.
3.
The Chief Executives of all agencies under the FMA Act are required to provide a
completed Certificate of Compliance (Certificate) to their portfolio Minister each year.
The purpose of the Certificate is to improve compliance with the Australian
Government’s financial management framework and to ensure that Ministers, and the
Presiding Officers in the case of the Parliamentary Departments, are kept informed of
compliance issues within their portfolios.
The Certificate process is an important means of identifying and disclosing instances of
non-compliance with the financial framework, as a basis for continuous improvement.
Certificate of Compliance Process
1
1
Financial Management Information System.
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Part 1.2 – Key Steps
1.3 Agency Governance
1.3.1 Responsibility of the Chief Executive
Section 44 - Promoting the proper use of Commonwealth resources
(1) A Chief Executive must manage the affairs of the Agency in a way that promotes proper use
of the Commonwealth resources for which the Chief Executive is responsible.
Note:
A Chief Executive has the power to enter into contracts, on behalf of the
Commonwealth, in relation to the affairs of the Agency. Some Chief Executives
have delegated this power under section 53.
(2) In doing so, the Chief Executive must comply with this Act, the regulations, Finance Minister’s
Orders, Special Instructions and any other law.
(3) In this section:
proper use means efficient, effective, economical and ethical use that is not inconsistent with
the policies of the Commonwealth.
4. A key feature of the financial management framework, which is comprised of the
FMA Act and Regulations, delegations and financial management policies,2 is that agency
Chief Executives are directly responsible for the financial management of their agencies.
5. Part 7 of the FMA Act sets out the specific responsibilities of Chief Executives. Section 44
places a special responsibility on Chief Executives to manage the affairs of their agency in
a way that promotes the “proper use” of the Commonwealth resources for which they
are responsible. Proper use means efficient, effective, economical and ethical use that is
not inconsistent with the policies of the Commonwealth. In managing the affairs of the
agency, Chief Executives must comply with the FMA Act and Regulations and any other
law.
6.
Chief Executives generally discharge their responsibility under section 44 by ensuring
that their agencies have appropriate internal controls, internal governance
arrangements, delegations, guidance, education, reporting, monitoring, and process
improvement mechanisms in place. For example, this may involve the establishment of
specific risk assessment and management activities around fraud control, with the
creation of a specific fraud control unit or appointment of Fraud Control Officers to
mitigate, monitor and investigate suspected fraud.
7.
This broad responsibility to manage the affairs of an agency in a way that promotes
proper use of Commonwealth resources, is complemented by other requirements in
Part 7 of the FMA Act, such as the requirements relating to audit committees, financial
reporting and fraud control plans.
8. The processes, systems and controls Chief Executives put in place to promote compliance
with the financial management framework may vary between agencies, depending on
their size, operations, structure and activities. In most cases, these processes and
2
The financial management policies of the Commonwealth are detailed in Finance Circulars, the Financial
Management Guidance series and the Financial Management Reference series. The financial management policies
which are reportable for Certificate purposes are detailed at Part 2.1.3 of this circular.
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Part 1.3 – Agency Governance
controls are an extension of those processes that give confidence to the Chief Executive
on matters, such as the use of delegations and budgetary management. The
Chief Executive may consider drawing on a program of internal audits, assessment of
internal controls, specific senior management requirements, and specialised assurance in
relevant high-risk areas, in addition to other advice, materials and processes in signing
the Certificate. It is also expected that audit committees will review and monitor internal
control mechanisms and advise Chief Executives on compliance issues on an ongoing
basis.
9. Chief Executives should put in place appropriate controls to ensure that “officials” within
their agency comply with the requirements of the financial management framework.
Accordingly, Chief Executives should investigate possible breaches of legislation and
non-compliance with Australian Government policy and initiate appropriate corrective
action.
1.3.2 Responsibility of the Audit Committee
10. Under section 46 of the FMA Act, Chief Executives must establish an audit committee
with functions and responsibilities specified in the FMA Regulations. The audit
committee is a key component of an agency’s corporate governance and is an important
mechanism for overseeing an agency’s financial management processes and compliance
with the financial management framework.
11. Chief Executives must set the terms of reference for their audit committees, consistent
with the general requirements contained in FMA Regulation 22C. Audit committees
should put in place activities to promote internal compliance and monitoring
arrangements. The Australian National Audit Office has published a Better Practice
Guide entitled Public Sector Audit Committees which provides guidance on the
establishment and operation of audit committees.
12. Audit committees play a key role in developing and implementing activities and procedures
to support the Certificate process. The audit committee’s advice on internal controls should
give confidence to a Chief Executive when completing the Certificate.
1.3.3 Responsibility of the Chief Financial Officer
13. Chief Financial Officers (CFOs) are generally the principal financial advisor to agencies’
Chief Executives. The scope and range of activities undertaken by a CFO will vary, but
his/her primary responsibility is to promote good budget and financial management
practices and to support the Chief Executive to discharge his/her financial management
responsibilities, in accordance with the FMA Act and Regulations and the financial
management policies. This role usually involves overseeing the financial management
and budget processes within an agency. It also includes establishing mechanisms to
meet specific reporting requirements and advising the Chief Executive on the financial
health of the agency. As such, the CFO will have a key role in an agency’s Certificate
processes.
1.3.4 Responsibility of all officials
14. The financial management framework establishes specific financial management
responsibilities for all officials. For example, section 14 of the FMA Act requires that
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Part 1.3 – Agency Governance
officials must not misapply, improperly dispose of, or improperly use “public money”.
Section 41 mirrors this requirement for public property. In addition, the special
responsibility of Chief Executives to promote the proper use of Commonwealth
resources is a requirement that is generally also applied to officials, through CEIs,
delegations and other internal requirements.
15. These requirements are reinforced by the various employment frameworks that apply
to officials. For example, the Australian Public Service (APS) Code of Conduct sets out
the standards of conduct required of all APS employees. This includes compliance with
applicable Australian laws and using Commonwealth resources in a proper manner.
Officials employed under other employment arrangements, for example Defence
personnel or Australian Federal Police employees, are subject to similar requirements as
a condition of employment.
16. There is a responsibility for all officials to comply with and, where relevant, report any
suspected instances of non-compliance of the FMA Act, Regulations and financial
management policies to the appropriate area within their agency.3 The agency will
determine if any non-compliance is reportable for Certificate purposes.
The identification and reporting of non-compliance should be used as the basis for
improving agency processes and increasing awareness and understanding of the
financial management framework.
17. Officials with specific financial management responsibilities, especially those who are
delegates, should have a good understanding and knowledge of the financial
management framework and their associated responsibilities.
3.
The Certificate process does not require disclosure by employees that is contrary to any legal privilege that a
person might claim, including self-incrimination. Agencies should seek appropriate legal advice if such issues
arise.
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Part 1.4 – The Certificate of Compliance
1.4 The Certificate of Compliance
1.4.1 Purpose
18. The purpose of the Certificate is to improve compliance with the financial management
framework and to ensure that Ministers are kept informed of compliance issues within
their portfolios.
19. The Certificate process aims to improve official’s understanding of the financial
management framework, and strengthen agency processes, through the identification of
non-compliance issues and by undertaking action to improve processes and compliance.
The Certificate promotes continuous improvement within agencies. Analysis of
Certificate results also provides an opportunity for Finance to identify issues that are
common across agencies, thereby highlighting elements of the framework that may
require improvement.
20.
The Certificate focuses on identifying noncompliance and improving agency processes. Therefore, individual agencies are not
currently identified in the Certificate of Compliance Report to Parliament. Chief
Executives should ensure that their systems are robust and identify non-compliance with
a view to process improvement. In particular, agencies that report low or no instances of
non-compliance should ensure that they have adequate processes to identify instances
of non-compliance.
21. Finance prepares an analysis of annual Certificate results that is tabled in the Parliament
each year. This analysis is aggregated to a portfolio level and does not identify agencies.
This analysis is reported against six categories which represent key elements of the
financial management framework (see Part 4 of this circular).
1.4.2 Certificate Requirements
22.
The Certificate is based on a self-assessment
by an agency’s Chief Executive. It is an assessment of an agency’s compliance based on
advice and internal controls. The Certificate also requires Chief Executives to state
whether their agency has adopted appropriate management strategies for all known
risks that may affect the financial sustainability of the agency and whether it is operating
within the agreed resources for the current financial year as at the date of signing (see
Part 2.2 for further information).
23. The Certificate must be provided to the responsible portfolio Minister and the Finance
Minister, by 15 October each year. If 15 October falls on a weekend, then the Certificate
is required to be provided on the last working day prior to the weekend.
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Part 2 – Guidance on Completing the Certificate
Part 2
Guidance on Completing the Certificate
2.1 Compliance with the Financial Framework
p. 12
2.2 Completing the Certificate
p. 15
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Part 2.1– Compliance with the Financial Framework
2.1 Compliance with the Financial Management
Framework
Whole-of-Government Financial Management Framework
Elements of the Financial Management Framework
FMA Act and Regulations
Finance
Minister’s
Orders for
Financial
Reporting
4
Commonwealth
Procurement
Guidelines,
Commonwealth Grant
Guidelines and Fraud
Control Guidelines
Finance Minister’s
Delegations
Finance Minister’s
Determinations
and Special
Instructions
Financial management policies4
24. FMA Act agencies operate within an environment that is made up of legislation,
legislative instruments and government policy. Within this context, the financial
management framework consists of the legislation, delegations and financial
management policies, such as those governing the management of Commonwealth
resources. Given the broad scope of financial management policies, only certain policies
are reportable for Certificate purposes (see Part 2.1.3 of this Circular).
2.1.1 The FMA Act and Regulations
25. The FMA Act and Regulations establish requirements for all Chief Executives and
officials. Failure to meet these requirements, or exceeding the authority provided under
this legislation should be reported at Appendix A to the Certificate.
26. To assist agencies, Part 4 of this circular provides information on the compliance
requirements of the FMA Act and Regulations as at December 2011. This can be used to
develop an internal compliance checklist or questionnaire, which should be regularly
reviewed and updated when there are significant changes to the FMA Act and
Regulations.
4.
In addition to policies that are reportable in the Certificate (see Part 2.1.3 of this Circular), financial
management policies include the policies that are not reportable for Certificate purposes (e.g. the 30 day
payment policy to small businesses).
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Part 2.1– Compliance with the Financial Framework
2.1.2 Finance Minister to Chief Executives Delegation
27. The Finance Minister has delegated certain powers and responsibilities to
Chief Executives, with directions. If a delegate does not comply with these directions, or
if an official acts without the appropriate delegation, this should be reported at
Appendix A to the Certificate against the relevant Schedule and Part of the Delegation.
28. The Finance Minister’s delegation to Chief Executives (the Delegation) is available on the
Finance website at www.finance.gov.au/financial-framework/fma-legislation/fmadelegations.html.
29. Non-compliance with internal delegations should not be reported in the Certificate,
unless there has also been non-compliance with the FMA Act or Regulations or the
directions in the Finance Minister’s delegation. For example, non-compliance with
directions in the Finance Minister’s delegation for FMA Regulation 10 would be
reportable. In contrast, an internal policy which requires FMA Regulation 10 to be
sought before FMA Regulation 9 approval would not be reportable. Issues relating to
non-compliance with internal delegations should still be considered as part of an
agency’s internal controls and improvement processes.
2.1.3 Reportable Financial Management Policies
30. Financial management policies include requirements that must be met by Chief
Executives and officials in addition to legislative requirements. They do not include
Finance publications that outline administrative processes, provide better practice
guidance, interpret or explain the legislative requirements.
31. Those policies that are reportable for Certificate purposes may change from time to
time. For the purposes of completing the Certificate, the financial management policies
that Chief Executives are required to certify compliance with are:
– the foreign exchange risk management policy, as outlined in the Australian
Government Foreign Exchange Risk Management Guidelines;
– competitive neutrality policy, as outlined in the Australian Government Competitive
Neutrality Guidelines for Managers;
– cost recovery policy, as outlined in the Australian Government Cost Recovery Guidelines;
– contingent liabilities policy, as outlined in the Guidelines for Issuing and Managing
Indemnities, Guarantees, Warranties and Letters of Comfort; and
– the management of property policy, as outlined in the Commonwealth Property
Management Guidelines.
32. Under FMA Regulation 9 5, “approvers” of spending proposals must be satisfied that giving
effect to the spending proposal would be a proper use of Commonwealth resources (i.e.
efficient, effective, economical and ethical use not inconsistent with the policies of the
Commonwealth). All officials, particularly approvers, should therefore take care to inform
themselves of new Commonwealth policies and ensure they take account of relevant
5
See Finance Circular 2011/01 - Commitments to spend public money (FMA Regulations 7-12) for further information
regarding Regulation 9.
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Part 2.1– Compliance with the Financial Framework
policies when approving spending proposals under FMA Regulation 9. For example,
approvers should be particularly aware of the Government’s ongoing development and
implementation of policies relating to whole-of-government procurement.
2.2 Completing the Certificate
33. The Certificate is a comprehensive report on each agency’s compliance with the financial
management framework. A key focus of the Certificate is the activities undertaken to
address non-compliance. The Certificate comprises five parts:
– the covering letter to the portfolio Minister (see Part 3.1), which must be copied to
the Finance Minister;
– the Certificate (see Part 3.2), signed by the Chief Executive certifying that, except to
the extent known and detailed in the appendices, officials within his/her agency
complied with the financial management framework requirements during the
previous financial year and have adopted appropriate management strategies for
all known risks that may affect the financial sustainability of the agency;
– Appendix A (see Part 3.3), which details all known instances of non-compliance and the
action/s taken (including timeframes) to improve agency processes;
– Appendix B (see Part 3.4), which gives an explanation of all known risks that may
affect the financial sustainability of the agency and states whether the agency is
operating within the agreed resources for the current financial year; and
– Appendix C (see Part 3.5), which lists all the Special Accounts that the
Chief Executive was responsible for during the financial year.
34. The Certificate must be signed by the agency’s Chief Executive. This responsibility
cannot be delegated.
35. The Certificate must be submitted to the responsible portfolio Minister6 and copied to
the Finance Minister. Where the portfolio Minister is not the Minister to which the
agency normally reports, Chief Executives should also provide a copy of the Certificate to
that Minister.
36. Chief Executives should implement activities to help complete their agency’s Certificate
that are fit‐for‐purpose, having regard to factors such as the size of the agency, its
activities, financial management arrangements, compliance history and key risk areas.
For example, a Chief Executive may choose to regularly assess internal controls or use a
combination of self-assessment questionaries and sample testing for high risk activities.
37. When developing internal processes to help complete the Certificate, officials should
consider the impact of other tasks, such as completion of annual financial statements.
Audit committees may, for example, wish to take the Certificate into account before
providing advice to the Chief Executive on the agency’s financial statements. They may
also wish to consider whether the financial sustainability component of the Certificate
has any implications for the “going concern” information in the financial statements.
Internal approval processes should allow sufficient time to provide a copy to the
responsible portfolio Minister and the Finance Minister by the due date.
6.
The Presiding Officers in the case of the three Parliamentary Departments.
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Part 2.2– Completing the Certificate
38. In addition to the copy provided to the Finance Minister, an electronic copy of the
Certificate, including all attachments, must be sent to finframework@finance.gov.au
before 15 October each year. This will enable Finance to commence its analysis of the
Certificate information to develop the annual Certificate Report for the Parliament.
2.2.1 Assessing Compliance: Chief Executive
39. Chief Executives should certify compliance based on their agency’s internal control
mechanisms, management, and audit committee advice. Chief Executives are not
required to check all actions and transactions of the agency. That said, Chief Executives
must ensure that agencies have sufficient processes and internal controls in place to
provide reasonable confidence that officials are complying with the requirements of the
financial management framework.
40. When reviewing non-compliance results, Chief Executives should consider the adequacy
of their agency’s internal controls. Low or no reported instances of non-compliance,
depending on the size, financial activities, controls, and the processes of an agency, may
not be a measure of good processes, but may in fact reflect a lack of understanding of
the financial management framework or inadequate compliance processes.
41. The ANAO Audit Report, Management of the Certificate of Compliance Process in FMA
Act Agencies (the Audit Report) contains better practice suggestions for agencies’
Certificate processes. The suggestions cover:
-understanding the financial management framework requirements and how they are
implemented;
-assessing internal controls supporting compliance with the financial management
framework requirements;
-determining the right approach to collecting Certificate information;
-quality assuring compliance information;
-making use of internal audit;
-ensuring audit committee oversight of the Certificate process;
-undertaking remediation and education; and
-reviewing the effectiveness and efficiency of the Certificate process.
2.2.2 Assessing Compliance: Reporting Non-compliance
42. Compliance with the requirements of the FMA Act and Regulations, and the financial
management policies, is not assessed based on materiality. All known instances of
non-compliance must be reported at Appendix A to the Certificate, regardless of
materiality.
43. In assessing non-compliance, a variety of sources of information should be used.
For example, an agency may use surveys, reports from its internal auditor, Financial
Management Information Systems, and other controls. Targeted quality assurance and
sample testing of financial transactions in risk areas will assist to provide assurance on
the accuracy of results.
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Part 2.2– Completing the Certificate
44. Where the processes and controls indentify compliance issues, all known instances of
non-compliance must be reported. Generalised reporting is inappropriate and should be
avoided (for example, reporting “several,” “a number of” or “multiple” instances of
non-compliance).
45. The results of sample testing should not be extrapolated. Only known instances of
non-compliance should be reported in the Certificate. If exact numbers are unavailable,
where there are a large number of incidences of non-compliance caused by a systemic
issue, the problem should be described and an estimate of the number of instances
should be provided (see Part 5 of this circular for further examples).
46. Activities that give rise to multiple instances of non-compliance should be reported in
the Certificate separately. For example, an agency may not have issued appropriate
drawing rights for a period of time. In this case, an agency should report the actual
numbers of non-compliance (for example, each payroll run made without appropriate
drawing rights).
47. Consequential instances of non-compliance should not be reported in the Certificate.
A consequential instance only occurs when multiple compliance issues are caused by the
same error (i.e. no additional non-compliance would have occurred if the original
non-compliance did not occur). For example, failure to bank public money promptly
would not result in non-compliance with both section 10 of the FMA Act and
FMA Regulation 17. It should only be reported as one instance of non-compliance
against section 10. Only the original non-compliance is reportable in the Certificate.
Consequential non-compliance may be noted in the explanation of the non-compliance,
but need not be reported separately (see example at Part 5, Frequently Asked
Question 3).
48. Only non-compliance that has occurred during the relevant reporting period is required
to be reported in the Certificate. If instances of non-compliance from previous years
come to light, Chief Executives should take appropriate action, as part of the continuous
improvement process, but should not report these.
49. Where one agency provides another agency with the authority to perform a “financial
task” for that agency, and the receiving agency acts outside that authority, the agency
performing the financial task must report the relevant instances of non-compliance in
their Certificate. For example, if Agency A sub-delegates the power to issue drawing
rights to Agency B, and officials in Agency B make payments using Agency A’s
appropriation without valid drawing rights, then Agency B must report the
non-compliance in their Certificate.
2.2.3 Financial Sustainability
50. Effective risk engagement and management is integral to good corporate governance.
It is important for agencies to manage risk effectively and efficiently, not only to meet
their statutory obligations under the financial management framework but to improve
organisational performance. Chief Executives must certify that known risks to the
financial sustainability of their agency are being actively managed. Where known risks
may affect the financial sustainability of an agency and appropriate management
strategies have not or cannot be taken, an explanation must be provided at Appendix B.
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Part 2.2– Completing the Certificate
51. Balancing increasing demands against limited financial resources is an important part of
a Chief Executive’s responsibilities. Financial sustainability, in this context, is the ability
of the agency to meet existing program requirements without the need for
supplementation. This includes the management of capital and long-term assets and
liabilities.
52. Chief Executives must also provide assurance that the agency is operating within the
agreed resources for the current financial year. Where a Chief Executive is not operating
within the agreed resources for the financial year (as recorded in the Australian
Government’s Central Budget Management System), he/she must provide an
explanation at Appendix B.
53. Where an agency has the approval of the Finance Minister for an operating loss for the
current financial year, as at the date of signing, the Chief Executive may take that into
account when determining whether the agency is operating within the agreed
resources. Where an agency is operating at a loss without the Finance Minister's
approval, an explanation must be provided at Appendix B. Agencies that are
anticipating the need to seek approval for an operating loss from the Finance Minister in
the current, or a future financial year, should also report this at Appendix B to the
Certificate.
2.2.4 Special Accounts
54. Chief Executives must provide a list of Special Accounts for which they were responsible
during the previous financial year at Appendix C to the Certificate (see Part 3.5 of this
circular). To ensure accuracy, it is encouraged that the list of Special Accounts is settled
in consultation with Finance, before submitting the Certificate. Please refer to the Chart
of Special Accounts on the Finance website.7 This chart lists all Special Accounts
managed by individual portfolios and agencies. The name of each Special Account on
the chart is hyperlinked to its most recent instrument on the ComLaw database.
55. Part 3.6 of this circular includes a checklist of the issues that need to be considered to
promote the efficient and effective management of Special Accounts. This attachment
does not explicitly cover other compliance responsibilities relevant to Special Accounts,
such as those required under the FMA Act in particular section 48, as these are
addressed in the Certificate itself.
56. For further information on the management requirements for Special Accounts please
refer to Finance Circular 2009/01 - An Introduction to Special Accounts and the
Guidelines for the Management of Special Accounts.8
7.
Available at www.finance.gov.au/financial-framework/financial-management-policy-guidance/specialaccounts.html.
8.
Available at www.finance.gov.au/publications/finance-circulars/2009/01.html.
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Finance Circular 2011/07
Department of Finance and Deregulation
Part3 – Tools and Templates
Part 3
Tools and Templates
3.1 Certificate of Compliance Letter Template
p. 19
3.2 Certificate of Compliance Template
p. 20
3.3 Appendix A – Non-Compliance Schedule Template
p. 21
3.4 Appendix B – Financial Sustainability Schedule Template p. 22
3.5 Appendix C – List of Special Accounts Template
p. 23
3.6 Special Accounts Checklist
p. 24
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Finance Circular 2011/07
Department of Finance and Deregulation
Part 3.1 – Certificate of Compliance Letter
3.1 Certificate of Compliance Letter Template
Dear Minister,
Please find attached the Certificate of Compliance (Certificate) relating to < insert name of
agency > for the < insert date > reporting period.
The Certificate aims to improve compliance with the financial management framework by
strengthening agency processes and improving understanding of the financial management
framework. It also seeks to keep Ministers informed of compliance issues within their
portfolios.
The Certificate promotes continuous improvement through the identification of noncompliance and action to improve processes and reduce non-compliance.
I am required to provide you with certification of compliance with the financial
management framework by my agency, including identifying any known risks to the financial
sustainability of my agency.
Based on my agency’s internal control mechanisms, management and audit committee
advice, I certify that I, and officials within my agency, complied with the requirements of the
financial management framework last financial year, < except to the extent known and
detailed in Appendix A to the Certificate >.
< You may wish to comment on the robustness of your Agency’s controls and internal
processes here >
I also certify that < insert name of agency > < has adopted or has not adopted > appropriate
management strategies for all currently known risks that may affect the financial
sustainability of the agency and < is operating or is not operating > within the agreed
resources for the current financial year.
I have provided a copy of the attached Certificate to the Finance Minister as required.
Yours sincerely
<insert Agency Chief Executive’s signature block>
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Finance Circular 2011/07
Department of Finance and Deregulation
Part 3.2 – Certificate of Compliance Template
3.2 The Certificate of Compliance Template
CERTIFICATE OF COMPLIANCE < FINANCIAL YEAR >
< INSERT AGENCY NAME HERE >
Based on the agency’s internal control mechanisms, management, and audit committee
advice, I certify that for the financial year ended 30 June < insert year >, < insert agency
name >, except to the extent detailed in Appendix A, has:
a) complied with the provisions and requirements of the Financial Management and
Accountability Act 1997 (FMA Act) and the Financial Management and Accountability
Regulations 1997 (FMA Regulations);
b) exercised the powers delegated by the Finance Minister in the Financial
Management and Accountability (Finance Minister to Chief Executives) Delegation
2010 (the Delegation), as amended from time to time, in accordance with the
Delegation;
c) complied with the requirements for the management of the Special Accounts for
which the agency is responsible, as listed at Appendix C; and
d) complied with reportable financial management policies of the Commonwealth.
Except to the extent detailed in Appendix B, my agency has adopted appropriate
management strategies for all known risks that may affect the financial sustainability of my
agency and is operating within agreed resources for the current financial year.
____________________________________________________
Date: __________
CHIEF EXECUTIVE OF <<INSERT AGENCY NAME HERE>>
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Department of Finance and Deregulation
Part 3.3 – Appendix A: Non-Compliance Schedule
3.3 Appendix A: Non-Compliance Schedule Template
CERTIFICATE OF COMPLIANCE < FINANCIAL YEAR >
< INSERT AGENCY NAME HERE >
Agencies should use the following format to report non-compliance for the Certificate process (it can be
presented in landscape or portrait format).
Requirement of
non-compliance
Title of
relevant
Section,
Regulation or
policy
Number of
instances of
non-compliance
The circumstances
of non-compliance
with the
requirements
Action taken
FMA Act
FMA Regulations
The Delegation
The requirements for
the management of
Special Accounts
The financial
management policies
of the
Commonwealth
The schedule should detail all known instances of non-compliance with:
a) the FMA Act and/or the FMA Regulations;
b) the Delegation;
c) the requirements for the management of Special Accounts; and
d) the reportable financial management policies of the Commonwealth are:
i.
foreign exchange risk management policy as outlined in the Australian Government
Foreign Exchange Risk Management Guidelines;
ii.
competitive neutrality policy as outlined in the Australian Government Competitive
Neutrality Guidelines for Managers;
cost recovery policy as outlined in the Australian Government Cost Recovery Guidelines;
contingent liabilities as articulated in the Guidelines for Issuing and Managing Indemnities,
Guarantees, Warranties and Letters of Comfort; and
iii.
iv.
v.
the management of property policy as outlined in the Commonwealth Property
Management Guidelines.
The schedule should specify the:
 actual (or estimated) number of specific known instances of non-compliance;
 circumstances where the requirements were not complied with; and
 action that has been undertaken, including timeframes, to improve agency processes. This action
should be based on the specific instances of non-compliance and should not be general
statements. For example, where the agency has indentified a lack of understanding of a particular
requirement, it is appropriate to indicate that training on that requirement has been delivered to
all affected employees.
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Finance Circular 2011/07
Department of Finance and Deregulation
Part 3.4 – Appendix B: Financial Sustainability Schedule
3.4 Appendix B: Financial Sustainability Schedule Template
The schedule should detail any known risks to the financial sustainability of the agency and strategies
to manage these risks.
The schedule should discuss whether the agency is facing any of the following financial sustainability
issues:
a) not operating within agreed resources;
b) seeking, or has obtained, approval from the Finance Minister for an operating loss for the
financial year;
c) increasing cost pressures for the financial year;
d) need to seek supplementation for the financial year;
e) expected difference in cash flow for the financial year; or
f) other issues or risks.
An explanation of the issues should be detailed below.
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Finance Circular 2011/07
Department of Finance and Deregulation
Part 3.5 – Appendix C: List of Special Accounts
3.5 Appendix C: List of Special Accounts Template
For the financial year ended 30 June, < insert year >, < insert agency name > has complied with
the legal and financial requirements for the management of the Special Accounts9 for which the
agency is responsible, as listed below:
i.
< list all Special Accounts for which the agency is responsible >
ii.
iii.
iv.
9.
A checklist is available to assist in the assessment of compliance with Australian Government standards for
the management of Special Accounts (see Part 3.6 of this circular).
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Finance Circular 2011/07
Department of Finance and Deregulation
Part 3.6 – Special Accounts Checklist
3.6 Special Accounts Checklist
1.
T
he Special Account(s) did not record a negative balance at any point during the
financial year.
Please contact your Agency Advice Unit (AAU) in Budget Group for advice and
information if the Special Account(s) purported to record a negative balance during
the financial year.
2. All debits were made in accordance with the debiting purpose(s) of the
Special Account(s), as set out in the relevant determination or legislation.
Amounts can only debited from a Special Account if they are consistent with the
purpose of the Account (see paragraph 7c in the Guidelines for the Management of
Special Accounts, Financial Management Guidance No. 7).
3.
All credits were made in accordance with the crediting provisions of the
Special Account, as set out in the relevant determination or legislation; and
All amounts appropriated under separate legislation with the policy intention of
being credited to a Special Account, have been credited to the ledger record of the
Special Account.
For example, amounts appropriated in the annual Appropriation Acts as an
Administered or Departmental item (such as an interest equivalency payment
intended for a particular Special Account).
4. If an amount from a Special Account was invested, then this was undertaken in
accordance with a Finance Minister’s delegation under section 39 of the Financial
Management and Accountability Act 1997.
See Section 9 (Banking and Investment) of the Guidelines for the Management of
Special Accounts, Financial Management Guidance No. 7.
5.
The current drawing rights for the Special Account(s) are valid.
6.
All Special Accounts (including those abolished during the Financial Year) were
reported in the Financial Statements and the Portfolio Budget Statements.
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Finance Circular 2011/07
Department of Finance and Deregulation
Part 4 - Compliance with the FMA Act and Regulations
Part 4
Page 25 of 66
Summary of Compliance Requirements in the
FMA Act and Regulations
Finance Circular 2011/07
Department of Finance and Deregulation
Part 4.1 – Compliance with the FMA Act and Regulations
4.1 Summary of Compliance Requirements in the FMA Act and Regulations
This table provides a summary of Certificate reporting requirements under the FMA Act and Regulations as at 1 December 2011. This is
designed to be used as a guide for agencies and may provide the basis of internal compliance checklists.
Section
Title
Requirement
Reportable Instances
1. The Commitment of Public Money by Agencies
Section 44
Promoting proper use of
Commonwealth resources.
(1) A Chief Executive must manage the affairs of the
Agency in a way that promotes proper use of the
Commonwealth resources for which the Chief
Executive is responsible.
(2) In doing so, the Chief Executive must comply with this
Act, the regulations, Finance Minister’s Orders, Special
Instructions and any other law.
(3) In this section:
Non-compliance may be reportable where the
Chief Executive or delegate does not promote the
proper use of Commonwealth resources or an
official enters into a contract without the
appropriate delegation or authorisation under
section 44.
For example, non-compliance may be reportable
where there is a use of resources which is
inconsistent with a policy of the Commonwealth.
proper use means efficient, effective, economical and
ethical use that is not inconsistent with the policies of
the Commonwealth.
Regulation 7
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Commonwealth
Procurement Guidelines
(Act, s 64)
(1) The Finance Minister may issue guidelines (to be called
Commonwealth Procurement Guidelines) in relation
to procurement, including:
An official must comply with the Commonwealth
Procurement Guidelines (CPGs). The CPGs are a
legislative instrument.
(a) procurement policies and processes; and
(b) requirements regarding the publication of
procurement details; and
(c) requirements regarding entering into procurement
arrangements; and
(d) the disposal of public property.
An official performing duties in relation to procurement
must act in accordance with the Commonwealth
Procurement Guidelines.
Non-compliance with the mandatory requirements
of the CPGs is reportable. The mandatory
requirements are indicated by the term “must” in
the CPGs.
Non-compliance with supplementary guidance on
procurement requirements, such as AusTender
reporting timeframes, is not reportable.
Finance Circular 2011/07
Department of Finance and Deregulation
Regulation 7A
Regulation 7B
Commonwealth Grant
Guidelines (Act, s 64)
Commonwealth Cleaning
Services Guidelines
(Act, s 64)
(1) The Finance Minister may issue guidelines (to be called
Commonwealth Grant Guidelines) in relation to grants
administration, including:
(a) grant policies and processes; and
(b) requirements regarding the publication of grant
details; and
(c) requirements regarding entering into grants.
An official must comply with the Commonwealth
Grant Guidelines (CGGs). The CGGs are a
legislative instrument.
(2) An official performing duties in relation to grants
administration must act in accordance with the
Commonwealth Grant Guidelines.
Non-compliance with supplementary guidance on
grants requirements is not reportable.
(1) The Minister for Tertiary Education, Skills, Jobs and
Workplace Relations may issue guidelines (to be called
Commonwealth Cleaning Services Guidelines) for the
administration of tenders conducted by Agencies in
relation to the procurement of cleaning services for
properties occupied by Agencies, including:
(a) procurement policies and processes; and
(b) requirements regarding entering into procurement
arrangements.
An official must comply with the Commonwealth
Cleaning Services Guidelines (Guidelines). The
Guidelines are a legislative instrument.
(2) An official performing duties in relation to a tender
conducted by an Agency in relation to the procurement of
cleaning services for a property occupied by the Agency
must act in accordance with the Commonwealth Cleaning
Services Guidelines.
Regulation 8
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Entering into an
arrangement
A person must not enter into an arrangement unless:
(a) a spending proposal has been approved under
regulation 9; and
(b) if required, written agreement has been given
under regulation 10.
Non-compliance with the mandatory requirements
of the CGGs is reportable. The mandatory
requirements are indicated by the term “must” in
the CGGs.
Non-compliance with the mandatory requirements
of the Guidelines is reportable. The mandatory
requirements are indicated by the term “must” in
the Guidelines.
Non-compliance with supplementary guidance on
the Guidelines requirements is not reportable.
The Guidelines apply from 1 January 2012.
While there is a compliance component for
Regulation 8, you should not report
non-compliance against this Regulation.
Where either Regulation 9 approval or Regulation
10 agreement have not been obtained, those
instances of non-compliance should be reported
against that relevant Regulation.
Finance Circular 2011/07
Department of Finance and Deregulation
Where neither Regulation 9 approval nor
Regulation 10 agreement were obtained,
non-compliance must be reported against both.
Note: Regulation 8 does not specify the order in
which these approvals should be obtained.
Regulation 9
Approval of spending
proposals
An approver must not approve a spending proposal unless An instance of non-compliance is reportable
the approver is satisfied, after making reasonable inquiries, where:
that giving effect to the spending proposal would be a
 the requirement of Regulation 8 is not met,
proper use of Commonwealth resources (within the
and an arrangement was entered into without
meaning given by subsection 44 (3) of the Act).
Regulation 9 approval for the spending
proposal;
 the approval of the spending proposal was not
a proper use of commonwealth resources;
 the spending proposal is inconsistent with
government policy;
 an approver, approved a spending proposal
beyond the limit of their delegation; and/or
 the amount paid under a contract exceeded
the Regulation 9 approval.
Note: Regulation 9 approval cannot be given
retrospectively.
Regulation 10
Arrangements beyond
available appropriation
If:
Page 28 of 66
(a) a person proposes to enter into an arrangement;
and
(b) the relevant Agency has an insufficient
appropriation of money, under the provisions of
an existing law or a proposed law that is before
Parliament, to meet expenditure that might be
payable under the arrangement;
the person must not enter into the arrangement unless the
Finance Minister has agreed, in writing, to the expenditure
that might become payable under the arrangement.
An instance of non-compliance is reportable where
an arrangement has been entered into and
Regulation 10 agreement had not been obtained
from the appropriate delegate or the Finance
Minister, before entering into the arrangement.
Note: Regulation 10 agreement cannot be given
retrospectively.
Finance Circular 2011/07
Department of Finance and Deregulation
Regulation 11
Regulation 12
Entering into loan
guarantees
Recording approval of
spending proposal
(1) Despite regulation 10A, a person must not give a loan
guarantee on behalf of the Commonwealth unless:
(a) a spending proposal for the loan guarantee has
been approved under regulation 9; and
(b) if required, written agreement has been given
under regulation 10; and
(c) the Finance Minister has, in writing, approved the
giving of the loan guarantee.
(1) If approval of a spending proposal has not been given
in writing:
(a) the approver must record the terms of the
approval in writing as soon as practicable after
giving the approval; and
(b) if the spending proposal relates to a grant, the
approver must include in the record the basis on
which the approver is satisfied that the spending
proposal complies with regulation 9.
(2) If:
(a) approval of a spending proposal has been given in
writing; and
(b) the spending proposal relates to a grant; and
(c) the approver has not recorded in writing the basis
on which the approver is satisfied that the
spending proposal complies with regulation 9;
the approver must record that basis in writing as soon as
practicable after giving the approval.
Non-compliance is reportable where a loan
guarantee is given without the criteria of
Regulation 11 having been complied with. In
particular, where the Finance Minister's written
approval has not been obtained, an instance of
non-compliance is reportable.
Non-compliance is reportable where there has
either been no documentation of a verbal
Regulation 9 approval or the written record of the
approval does not provide appropriate evidence of
compliance with Regulation 9.
Non-compliance may also be reportable where
documentation has not occurred “as soon as
practicable”.
For grants, non-compliance is reportable where
the basis on which the spending proposal was
approved has not been recorded in writing.
2. The use of Drawing Rights by Agencies
Section 26
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Drawing rights required for
payment etc. of public
money
(1) The Finance Minister may issue a drawing right to an
official or Minister that authorises the official or
Minister to do one or more of the following:
Non-compliance is reportable where the payment
of public money without a valid drawing right
occurs.
(a) make a payment of public money;
(b) request the debiting of an amount against an
appropriation;
Note: Non-compliance is reportable against section
26, rather than section 27, for each payment run.
Finance Circular 2011/07
Department of Finance and Deregulation
(c) debit an amount against an appropriation.
(2) If a law requires the payment of an amount of public
money and there is an available appropriation for that
payment:
(a) the Finance Minister must issue sufficient drawing
rights to allow the amount to be paid in full; and
(b) the recipient of any of those drawing rights must
exercise the rights in full.
(3) If a law permits the payment of an amount of public
money, but does not require the payment of that
amount, there is no obligation to issue or exercise
drawing rights for that amount.
Note: The power to issue drawing rights under
section 27 has been delegated to Chief Executives.
Where the directions have not been followed,
non-compliance should be reported against the
Delegation (Schedule 1, Part 8 or Part 9, as
applicable).
(4) The Finance Minister may at any time revoke or amend
a drawing right.
(5) A drawing right has no effect to the extent that it
claims to authorise the application of public money in
a way that is not authorised by an appropriation.
Section 27
Issue of drawing rights
(1) The Finance Minister may issue a drawing right to an
official or Minister that authorises the official or
Minister to do one or more of the following:
Refer to section 26 above.
(a) make a payment of public money;
(b) request the debiting of an amount against an
appropriation;
(c) debit an amount against an appropriation.
(2) If a law requires the payment of an amount of public
money and there is an available appropriation for that
payment:
(a) the Finance Minister must issue sufficient drawing
rights to allow the amount to be paid in full; and
(b) the recipient of any of those drawing rights must
exercise the rights in full.
(3) If a law permits the payment of an amount of public
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Department of Finance and Deregulation
money, but does not require the payment of that
amount, there is no obligation to issue or exercise
drawing rights for that amount.
(4) The Finance Minister may at any time revoke or amend
a drawing right.
(5) A drawing right has no effect to the extent that it
claims to authorise the application of public money in
a way that is not authorised by an appropriation.
3. The Proper Use of Financial Resources
Section 14
Misapplication or improper
use of public money
An official or Minister must not misapply public money or
improperly dispose of, or improperly use, public money.
Non-compliance is reportable where an official
undertakes an action which misapplies, improperly
uses or disposes of public money.
Instances usually relate to circumstances where
fraud, theft, wilful misconduct or misappropriation
has been identified within an agency. Misuse of a
Commonwealth credit card or card number is
reportable under section 60 and not section 14.
Section 15
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Liability for loss of public
money
(1) If:
(a) a loss of public money occurs; and
(b) at the time of the loss, an official or Minister had
The loss of public money in itself is not a
reportable instance of non-compliance. That said,
agencies should report non-compliance against
Finance Circular 2011/07
Department of Finance and Deregulation
nominal custody of the money as described in
subsection (2);
the official or Minister is liable to pay to the
Commonwealth an amount equal to the loss. However, it
is a defence if the person proves that he or she took
reasonable steps in all the circumstances to prevent the
loss.
(2) A person has nominal custody of public money if:
(a) the person holds the money by way of a petty cash
advance, “change float” or other advance; or
(b) the person has received the money, but has not
yet dealt with it as required by section 10.
(3) If:
this section for the loss of public money, where
misconduct, or deliberate or serious disregard of a
reasonable standard of care by the official caused
the loss.
Non-compliance is also reportable where there has
been no repayment to the Commonwealth where
a reasonable standard of care was not exercised by
the official.
(a) a loss of public money occurs; and
(b) an official or Minister caused or contributed to the
loss by misconduct, or by a deliberate or serious
disregard of reasonable standards of care;
the official or Minister is liable to pay to the
Commonwealth an amount equal to the loss. However, if
the person’s misconduct or disregard was not the sole
cause of the loss, the person is liable to pay only so much
of the loss as is just and equitable having regard to the
person’s share of the responsibility for the loss.
(4) A person’s liability under this section that arises when
the person is an official or Minister is not avoided
merely because the person ceases to be an official or
Minister.
(5) An amount payable to the Commonwealth under this
section is recoverable as a debt in a court of
competent jurisdiction.
(6) The Commonwealth is not entitled to recover amounts
from the same person under both subsections (1) and
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Department of Finance and Deregulation
(3) for the same loss
Section 60
Regulation 21
Misuse of Commonwealth
credit card
Credit cards (Act, ss 38 and
60)
(1) An official or Minister must not use a Commonwealth
credit card, or a Commonwealth credit card number,
to obtain cash, goods or services otherwise than for
the Commonwealth.
Non-compliance is reportable where there is a
misuse of a Commonwealth credit card or card
number to obtain cash, goods or services
otherwise than for the Commonwealth.
(2) Subsection (1) does not apply to a particular use of a
Commonwealth credit card or Commonwealth credit
card number if:
There is no distinction between deliberate
(fraudulent) and accidental misuse. All misuse
must be reported. Coincidental private
expenditure should not be reported, if authorised
by the Chief Executive under Regulation 21.
(a) the use is authorised by the regulations; and
(b) the Commonwealth is reimbursed in accordance
with the regulations.
(1) An arrangement with a bank or other person under
subsection 38 (2) of the Act may provide for the issue
to, and use by, the Commonwealth of credit cards or
credit vouchers.
(2) A Chief Executive may:
(a) authorise a holder of a Commonwealth credit card
to use the Commonwealth credit card to pay a
claim that includes both official and coincidental
private expenditure; and
(b) specify arrangements for the holder of the
Commonwealth credit card to reimburse the
Commonwealth for that coincidental private
expenditure.
(3) The holder of the Commonwealth credit card must pay
to the Commonwealth the amount paid by the
Commonwealth for the coincidental private
expenditure.
The misuse of credit cards should be reported
against section 60 of the Act, and not
Regulation 21.
Note that Regulation 21 allows a Chief Executive to
authorise coincidental private expenditure.
Where coincidental private expenditure occurs
which is not authorised by the Chief Executive this
should be reported against section 60 as a misuse
of a Commonwealth credit card.
(4) The amount payable to the Commonwealth under this
regulation is recoverable as a debt in a court of
competent jurisdiction.
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(5) In this regulation:
Commonwealth credit card:
(a) has the meaning given by subsection 60 (3) of the
Act; and
(b) includes a Commonwealth credit card number
mentioned in subsections 60 (1) and (2) of the Act.
4. Banking and Investment by Agencies
Section 8
Agreements with banks
about receipt, transmission
etc. of public money
(1) The Finance Minister may, on behalf of the
Commonwealth, enter into an agreement with any
bank:
(a) for the receipt, custody, payment or transmission
of public money, either inside or outside Australia;
or
(b) for any other matter relating to the conduct of the
banking business of the Commonwealth.
(2) An agreement under this section may provide for the
payment of interest and other charges by the
Commonwealth.
Non-compliance is reportable where an agreement
for an overdraft on an official account is made with
a bank and the repayment period is longer than
30 days.
Note: The Finance Minister has delegated this
power to Chief Executives with directions. Where
the directions are not complied with an instance of
non-compliance should be reported against the
Delegation (Schedule 1, Part 1 to 3, as applicable).
(3) An agreement under this section may not provide for
overdraft drawings by the Commonwealth unless it
provides for each drawing to be repaid within 30 days.
Note: An overdraft drawing consists of the bank meeting
the payment of a cheque, or making an “electronic
payment” to another account, and in each case debiting
the payment against an account that has an insufficient
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balance. Section 38 deals with overdrafts that arise in
respect of advances that are paid to the Commonwealth.
(4) An agreement for an overdraft on an official account
must not be made except under this section.
(5) An agreement under this section may not be made for
a period of more than one year unless the agreement
can be terminated by the Commonwealth at any time
after giving notice of not more than 6 months.
Section 9
Official bank accounts
(1) The Finance Minister may open and maintain bank
accounts in accordance with agreements under
section 8, and must open and maintain at least one
such bank account.
(2) A bank account must have a name that includes the
word “Official”.
Non-compliance is reportable where an account is
opened without the term “official” in the title.
Banking public money into a non-official account
should be reported against section 11 and not
section 9.
(3) An account for the receipt, custody, payment or
transmission of public money must not be opened
except in accordance with this section.
Section 10
Public money must be
promptly banked etc.
An official or Minister who receives public money
(including money that becomes public money upon
receipt) must bank it as required by the regulations or
otherwise deal with it as required by the regulations. For
this purpose, money includes cheques and similar
instruments.
Non-compliance is reportable for each transaction
where an official does not bank public money the
next banking day or a banking day approved by the
Chief Executive, as provided by Regulation 17.
Section 11
Public money not to be
paid into non-official
account
An official or Minister must not deposit public money in
any account other than an official account. For this
purpose, money includes cheques and similar instruments.
Non-compliance is reportable for each transaction,
where public money is banked into a non-official
account.
Section 13
Money not to be
withdrawn from official
account without authority
An official must not withdraw money from an official
account except as authorised by the regulations.
Non-compliance is reportable for each transaction,
where money is withdrawn from an official
account without authority and the withdrawal is
not consistent with Regulations 19 and 19A. There
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may also be instances of non-compliance with
section 26 if this occurs.
Section 16
Special Instructions by
Finance Minister about
handling etc. of special
public money
(1) The Finance Minister may, by legislative instrument,
issue Special Instructions about special public money,
including instructions about:
Non-compliance is reportable where an official
does not comply with any Special Instructions on
special public money.
(a) the custody of special public money;
(b) the investment of special public money;
(c) the application of interest or other amounts
derived from the investment of special public
money;
(d) the application of special public money in paying
the expenses involved in dealing with special
public money.
(2) In case of inconsistency, Special Instructions override
this Act, the regulations and the Finance Minister’s
Orders. However, Special Instructions cannot be
inconsistent with the terms of any trust that applies to
the money concerned.
(3) An official or Minister must not contravene any Special
Instruction.
Section 34
Finance Minister may waive
debts etc.
(1) The Finance Minister may, on behalf of the
Commonwealth:
(a) waive the Commonwealth’s right to payment of an
amount owing to the Commonwealth;
(b) postpone any right of the Commonwealth to be
paid a debt in priority to another debt or debts;
(c) allow the payment by instalments of an amount
owing to the Commonwealth;
(d) defer the time for payment of an amount owing to
the Commonwealth.
Note: See also subparagraph 65(2)(a)(ia) (which allows
regulations to be made about the Finance Minister
considering a report from specified persons before waiving
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Section 34 provides the Finance Minister with the
power to waive, postpone, allow the payment by
instalment, or defer the time for payment of debt.
The Finance Minister has delegated the power to
waive debts to a limited number of Chief
Executives. The power to allow payment by
instalment or to defer the time for payment of
debt has been delegated to all Chief Executives.
Section 34 does not contain a compliance element,
however subregulations 29(2)(a) and (b) impose
mandatory action to be taken by the Finance
Minister for a total amount of more than
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a total amount that is more than a specified amount).
$250,000.
(3) A waiver may be made either unconditionally or on the
condition that a person agrees to pay an amount to
the Commonwealth in specified circumstances.
Where an official exercises a power without the
appropriate delegation under subsection 34(1), or
does not comply with the directions, an agency
should report this as an instance of
non-compliance with the Delegation (Schedule 1,
Part 10 to 13 as appropriate).
(4) In this section:
amount owing to the Commonwealth includes an amount
that is owing but not yet due for payment.
Section 38
Finance Minister may
borrow for short periods
Where a debt is not recovered by a Chief Executive
(or delegate) it should be reported under section
47, not section 34 or the Delegation.
(1) The Finance Minister, on behalf of the Commonwealth,
may enter into an agreement with any bank for
borrowing money from the bank by way of advances
(including advances on overdraft) that are to be paid
to the Commonwealth and repaid by the
Commonwealth within 90 days.
Non-compliance is reportable where an
arrangement has longer than 60 days for the
money to be repaid after the Commonwealth is
notified by the lender.
(1) The Finance Minister may, on behalf of the
Commonwealth, invest public money in any authorised
investment.
Non-compliance is reportable where public money
is invested in an investment which is not
authorised under section 39.
(2) The Treasurer may, on behalf of the Commonwealth,
invest public money in any authorised investment.
Non-compliance is reportable where public money
is invested without a delegation from the Finance
Minister. In particular, a special account which has
an investment capacity still requires a delegation
from the Finance Minister to exercise investment
power.
Note: Subsection 38 (2) has been delegated to
Chief Executives only for the issue of
(2) The Finance Minister, on behalf of the Commonwealth, Commonwealth credit cards (Schedule 1, Part 15).
may enter into agreements in accordance with the
Where a Chief Executive (other than the DFAT
regulations for borrowing money from banks or other
Chief Executive) enters into any other borrowing, it
persons. Such an agreement must require the money
should be reported as an instance of
to be repaid within 60 days after the Commonwealth is
non-compliance with the Delegation.
notified by the lender of the amount borrowed.
Section 39
Investment of public
money
(2A)
For the purposes of investing public money under
this section in securities of the Commonwealth, the
Commonwealth is to be treated as if it were a separate
legal entity to the entity issuing the securities.
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(3) An investment of public money under this section
must not be inconsistent with the terms of any trust
that applies to the money concerned.
(4) If an amount invested under this section was debited
from a Special Account, then expenses of the
investment may be debited from that Special Account.
(5) Upon realisation of an investment of an amount
debited from a Special Account, the proceeds of the
investment must be credited to that Special Account.
(6) At any time before an investment matures, the
Finance Minister or Treasurer, as the case requires,
may, on behalf of the Commonwealth, authorise the re
investment of the proceeds upon maturity in an
authorised investment with the same entity.
Section 40
Custody etc. of securities
An official who receives any bonds, debentures or other
securities in the course of carrying out duties as an official
must deal with them in accordance with the regulations.
Non-compliance is reportable against section 40 of
the Act where the mandatory requirements of
Regulation 20 are not followed.
Section 47
Recovery of debts
(1) A Chief Executive must pursue recovery of each debt
for which the Chief Executive is responsible unless:
Non-compliance is reportable where a Chief
Executive does not pursue recovery of each debt
for which the Chief Executive is responsible unless
subparagraphs 1(a) to (c) are applicable.
(a) the debt has been written off as authorised by an
Act; or
(b) the Chief Executive is satisfied that the debt is not
legally recoverable; or
(c) the Chief Executive considers that it is not
economical to pursue recovery of the debt.
(2) For the purposes of subsection (1), a Chief Executive is
responsible for:
Where a debt was not pursued during the
reporting period, it should be reported as
non-compliance against section 47.
(a) debts owing to the Commonwealth in respect of
the operations of the Agency; and
(b) debts owing to the Commonwealth that the
Finance Minister has allocated to the Chief
Executive.
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Regulation 17
Prompt banking of received
money (Act, s 10)
(1) An official who:
(a) receives public money in a bankable currency; or
(b) receives money in a bankable currency that
becomes public money on receipt;
must bank the money.
Non-compliance should be reported against
section 10 for each transaction where an official
does not bank the public money the next banking
day or a banking day approved by the Chief
Executive, as required by Regulation 17.
(2) The official must bank the money as soon as
practicable, but in any case not later than:
Regulation 18
Public money in nonbankable currency (Act,
s 10)
(a) the next banking day; or
(b) a banking day approved by the Chief Executive for
this paragraph.
(1) An official who receives public money in a
non-bankable currency must take reasonable steps to
safeguard the money.
(2) In subregulation (1):
Non-compliance is reportable where reasonable
steps to safeguard the money are not taken. This
may be indicated if the non-bankable currency is
lost or stolen and reasonable steps were not taken.
non-bankable currency means:
Regulation 20
Custody etc of securities
(Act, s 40)
(a) a currency that cannot be banked; or
(b) a currency the banking of which would, in the
opinion of the Chief Executive of the Agency by
which it is received, involve significant costs or
administrative difficulty.
If an official, in the course of carrying out duties as an
official, receives bonds, debentures or other securities, the
official must:
Non-compliance is reportable against section 40 of
the Act where the mandatory requirements of
Regulation 20 are not complied with.
(a) issue a receipt for the bonds, debentures or other
securities received; and
(b) maintain a register of all bonds, debentures or
other securities received; and
(c) take reasonable steps to safeguard the bonds,
debentures or other securities.
5. The Maintenance of Agency Accounts and Records
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Section 44A
Keeping responsible
Minister and Finance
Minister informed
(1) A Chief Executive must:
(a) give the Minister responsible for the Agency such
reports, documents and information in relation to the
operations of the Agency as that Minister requires; and
(b) give the Finance Minister such reports, documents and
information in relation to the financial affairs of the
Agency as that Minister requires.
(2) A Chief Executive must comply with a requirement
under paragraph (1)(a) or (b) within the time limits set
by the Minister concerned.
(3) This section does not limit any other power that a
Minister has to require information from an Agency.
Non-compliance is reportable where the Chief
Executive does not provide financial information to
the responsible Minister or the Finance Minister as
required and within the time limits set by the
Minister concerned.
Section 48
Accounts and records
(1) A Chief Executive must ensure that accounts and
records of the Agency are kept as required by the
Finance Minister’s Orders.
(2) The Finance Minister is entitled to full and free access
to the accounts and records kept under subsection (1).
However, the Finance Minister’s access is subject to
any law that prohibits disclosure of particular
information.
Non-compliance is reportable where the records of
the agency are not kept as required by the Finance
Minister’s Orders.
Section 49
Annual financial statements
(1) A Chief Executive must give to the Auditor General the
annual financial statements required by the Finance
Minister’s Orders.
(2) The financial statements must be prepared in
accordance with the Finance Minister’s Orders and
must give a true and fair view of the matters that
those Orders require to be included in the statements.
(3) If financial statements prepared in accordance with
the Finance Minister’s Orders would not otherwise
give a true and fair view of the matters required by
those Orders, the Chief Executive must add such
information and explanations as will give a true and
fair view of those matters.
Non-compliance is reportable where the
requirements of subsections 49(1) to (4) are not
met.
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(4) In the financial statements, the Chief Executive must
state whether, in his or her opinion, the financial
statements give a true and fair view of the matters
required by Finance Minister’s Orders.
Section 50
Additional financial
statements
A Chief Executive must, when required by the Finance
Minister, give the Finance Minister financial statements
covering a period of less than a financial year. The Finance
Minister may require the statements to include some or all
of the details that are required to be included in the
annual financial statements.
Non-compliance is reportable where a Chief
Executive has not provided financial statements
covering a period of less than a financial year,
when required by the Finance Minister.
Section 51
Reporting requirements if
Agency ceases to exist or
Agency functions are
transferred
Agency ceases to exist
(1) If an Agency (the old Agency) ceases to exist, then, to
the extent that its functions are not transferred to one
or more other Agencies, the financial statements that
would have been required to be prepared under
section 49 by the Chief Executive of the old Agency
must be prepared by another Chief Executive
nominated by the Finance Minister.
Transfer of Agency functions
(2) If a function of an Agency (the transferring Agency) is
transferred to one or more other Agencies, either
because the transferring Agency ceases to exist or for
any other reason, the financial statements under
section 49 for that function must be prepared by the
Chief Executive or Chief Executives nominated by the
Finance Minister.
Non-compliance is reportable where the financial
statements for a function which has been moved
(either by transfer or if an agency ceases to exist)
are not prepared by the Chief Executive nominated
by the Finance Minister.
(1) An official or Minister must not enter into an
agreement or arrangement for the receipt, custody or
payment of public money by an outsider unless:
Non-compliance is reportable where an official
enters into an arrangement which is not
authorised by a Section 12 delegate or the Finance
Minister and the arrangement:
6. Miscellaneous Requirements
Section 12
Receipt and spending of
public money by outsiders
(a) the Finance Minister has first given a written
authorisation for the agreement or arrangement;
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
involves the receipt, custody or payment
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or
(b) the agreement or arrangement is expressly
authorised by this Act or by another Act.
Penalty: Imprisonment for 7 years.
Note: Chapter 2 of the Criminal Code sets out the general
principles of criminal responsibility.
(2) An outsider commits an offence if:
(a) the outsider receives or has custody of public
money under an agreement or arrangement
mentioned in subsection (1); and
(b) the outsider makes a payment of the public
money; and
(c) that payment is not authorised by the agreement
or arrangement.
Penalty: Imprisonment for 2 years.
of public money; and

was intended to replace the requirements
of the FMA Act or Regulations (i.e. the
“outsider” was not intended to be treated
as an “allocated official”10 when
performing a financial task).
10
Note: Where the outsider does not comply with
the terms of the authorised arrangement, this
should not be reported for Certificate purposes,
and may result in penalties.
Note: Section 27 allows a drawing right to be issued to an
official or a Minister to debit an amount against an
appropriation (as a result of a payment of public money by
an outsider).
(3) In this section:
outsider means any person other than the
Commonwealth, an official or a Minister.
Section 33
Finance Minister may
approve act of grace
payments
(1) If the Finance Minister considers it appropriate to do
so because of special circumstances, he or she may
authorise the making of any of the following payments
to a person (even though the payment or payments
would not otherwise be authorised by law or required
to meet a legal liability):
This requirement is not reportable for the
Certificate as non-compliance cannot occur.
That said, non-compliance may be reportable by
Finance against Regulation 29, or the Delegation if
the requirements or directions are not met.
(a) one or more payments of an amount or amounts
10.
An allocated official is a person outside the Commonwealth who performs a financial task and temporarily becomes an official of the FMA Act agency.
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specified in the authorisation (or worked out in
accordance with the authorisation);
(b) periodical payments of an amount specified in the
authorisation (or worked out in accordance with
the authorisation), during a period specified in the
authorisation (or worked out in accordance with
the authorisation).
Note: See also subparagraph 65(2)(a)(ia) (which allows
regulations to be made about the Finance Minister
considering a report from specified persons before
authorising a total amount that is more than a specified
amount).
(3) Conditions may be attached to payments under this
section. If a condition is breached, the payment may
be recovered by the Commonwealth as a debt in a
court of competent jurisdiction.
Note: Act of grace payments under this section must be
made from money appropriated by the Parliament.
Generally, an act of grace payment can be debited against
an Agency’s annual appropriation, providing that it relates
to some matter that has arisen in the course of its
administration.
Section 39 A
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Minister must inform
Parliament of involvement
in a company by the
Commonwealth or a
prescribed body
(1) The Minister who has the responsibility for any of the
following events must table a notice of the event in
each House of the Parliament as soon as practicable
after the event occurs:
(a) the Commonwealth or a prescribed body forms, or
participates in forming, a company;
(b) the Commonwealth or a prescribed body acquires
shares in a company (either by purchase or
subscription) or disposes of shares in a company;
(c) the Commonwealth or a prescribed body becomes
a member of a company;
There is a mandatory requirement under section
39A. That said, it is not a reportable requirement
for the purposes of the Certificate. It is the
responsible Minister who must table the notice to
each House of the Parliament.
The Certificate is a report from the Chief Executive
of the agency to the responsible Minister. As such
this is not a reportable requirement for Certificate
purposes.
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(d) a variation occurs in the rights attaching to
company shares held by the Commonwealth or a
prescribed body;
(e) a variation occurs in rights of the Commonwealth
or a prescribed body as a member of a company;
(f) the Commonwealth or a prescribed body ceases to
be a member of a company.
(2) The notice must be in the form, and contain the
particulars, set out in the regulations.
(3) This section does not apply to:
(a) an event mentioned in paragraphs (1)(a) to (f) that
occurs in relation to:
(i)
an authorised investment made under
section 39; or
(ii)
an investment made under the Future
Fund Act 2006; or
(b) anything that results from the transfer to a
Minister of any property that is to be dealt with as
unclaimed property under Part 9.7 of the
Corporations Act 2001; or
(c) a company that is conducted for the purposes of
an intelligence or security agency (within the
meaning given by section 85ZL of the Crimes Act
1914).
(4) In this section:
company includes a body of a kind prescribed by the
regulations for the purposes of this section.
prescribed body means a body corporate that is, or is
included in, an Agency.
Section 41
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Misapplication or improper
use of public property
An official or Minister must not misapply public property
or improperly dispose of, or improperly use, public
property.
Non-compliance is reportable where an official
misapplies, improperly disposes of, or improperly
uses public property.
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The improper use of public property will be subject
to the individual circumstances of the agency and
should be considered in the context of CEIs and
internal operational guidance.
Reported instances against section 41 generally
relate to circumstances where fraud, theft, wilful
misconduct or misappropriation has been
identified.
Section 42
Liability for loss etc. of
public property
(1) If:
(a) a loss of public property occurs; and
(b) at the time of the loss, an official or Minister had
nominal custody of the property as described in
subsection (2);
the official or Minister is liable to pay to the
Commonwealth the amount of the loss. However, it is a
defence if the person proves that he or she took
reasonable steps in all the circumstances to prevent the
loss.
(2) A person (the custodian) has nominal custody of public
property if both of the following conditions are
satisfied:
The loss of public property is not in itself a
reportable instance as there is no mandatory
requirement for officials not to lose public
property.
Non-compliance is reportable where there has
been no payment to the Commonwealth and there
was no reasonable defence (such as taking
reasonable steps to prevent the loss) for the
official not to become liable for the loss.
(a) the custodian has taken delivery of the property
and has not returned it to the person entitled to
receive the property on behalf of the
Commonwealth;
(b) when the custodian took delivery of the property
the custodian signed a written acknowledgment
that the property was delivered on the express
condition that the custodian would at all times
take strict care of the property.
(3) If:
(a) a loss of public property occurs; and
(b) an official or Minister caused or contributed to the
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loss by misconduct, or by a deliberate or serious
disregard of reasonable standards of care;
the official or Minister is liable to pay to the
Commonwealth the amount of the loss. However, if the
person’s misconduct or disregard was not the sole cause of
the loss, the person is liable to pay only so much of the
amount of the loss as is just and equitable having regard to
the person’s share of the responsibility for the loss.
(4) A person’s liability under this section that arises when
the person is an official or Minister is not avoided
merely because the person ceases to be an official or
Minister.
(5) An amount payable to the Commonwealth under this
section is recoverable as a debt in a court of
competent jurisdiction.
(6) The Commonwealth is not entitled to recover amounts
from the same person under both subsections (1) and
(3) for the same loss.
Section 43
Gifts of public property
An official or Minister must not make a gift of public
property unless:
(a) the making of the gift is expressly authorised by
law; or
(b) the Finance Minister has given written approval to
the gift being made; or
(c) the Commonwealth acquired the property to use it
as a gift.
Non-compliance is reportable where an official
makes a gift of public property inconsistent with
subsections 43(a) to (c).
The Finance Minister has delegated this power to
Chief Executives. Non-compliance is reportable
against the Delegation (Schedule 1, Part 17) where
the directions are not followed.
Section 45
Fraud control plan
A Chief Executive must implement a fraud control plan for
the Agency. For this purpose, fraud includes fraud by
persons outside the Agency in relation to activities of the
Agency.
Non-compliance is reportable where a fraud
control plan for the agency has not been
developed and implemented.
Section 46
Audit committee
(1) A Chief Executive must establish and maintain an audit
Non-compliance is reportable where an audit
committee is not established or maintained to
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committee with functions that include:
(a) helping the Agency to comply with obligations
under this Act, the regulations and Finance
Minister’s Orders; and
(b) providing a forum for communication between the
Chief Executive, the senior managers of the Agency
and the internal and external auditors of the
Agency.
(2) The committee must be constituted in accordance
with the regulations (if any).
Section 52
Chief Executive’s
instructions
(1) The regulations may authorise Chief Executives to give
instructions to officials in their Agencies on any matter
on which regulations may be made under this Act.
undertake the functions at subparagraphs (a)
and (b). Non-compliance is also reportable against
section 46 if the audit committee is not constituted
in accordance the requirements of Regulation 22C.
This section does not contain a compliance
element. This section is a discretionary power of
the Chief Executive.
(2) An instruction cannot create offences or impose
penalties.
Section 53
Chief Executive may
delegate powers
(1) A Chief Executive may, by written instrument, delegate
any of the following powers and functions to an official
in any Agency:
(a) the Chief Executive’s powers or functions under
this Act (including powers or functions that have
been delegated to the Chief Executive under
section 62 or 62A);
(b) the Chief Executive’s power to give instructions
under regulations referred to in section 52.
1AA) If:
This section is a discretionary power of the Chief
Executive. That said, non-compliance is reportable
where the Chief Executive is subject to directions
under sections 62 or 62A and the Chief Executive
does not give corresponding directions to the
second delegate.
(a) the Chief Executive delegates a power or function
to a person; and
(b) the power or function is not one that has been
delegated to the Chief Executive under section 62
or 62A;
the Chief Executive may give directions to the person
in relation to the exercise of that power or the
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performance of that function. The person must
comply with any such directions.
1A) If the Chief Executive delegates to a person (the
second delegate) a power or function that has been
delegated to the Chief Executive under section 62 or
62A, then that power or function, when exercised or
performed by the second delegate, is taken for the
purposes of this Act to have been exercised or
performed by the Finance Minister or Treasurer.
(2) If the Chief Executive is subject to directions in relation
to the exercise of a power, or the performance of a
function, delegated to the Chief Executive under
section 62 or 62A, then:
(a) the Chief Executive must give corresponding
directions to the second delegate; and
(b) the Chief Executive may give other directions (not
inconsistent with those corresponding directions)
to the second delegate in relation to the exercise
of that power or the performance of that function.
(3) The second delegate must comply with any directions
of the Chief Executive.
Regulation
16A
Guidelines on fraud (Act s
64)
(1) The Minister for Home Affairs may issue guidelines (to
be called Fraud Control Guidelines) about the control
of fraud, dealing with fraud risk assessments, the
preparation and implementation of fraud control plans
and reporting of fraud.
(2) An official performing duties in relation to the control
and reporting of fraud must act in accordance with the
Fraud Control Guidelines.
Regulation
22AA
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Notice of share acquisitions
and other events (Act
s 39A)
(1) A notice of an event mentioned in subsection 39A (2)
of the Act must be in the form in Schedule 1A.
(2) The notice must include the particulars set out in the
An official must comply with the Fraud Control
Guidelines (FCGs). The FCGs are a legislative
instrument.
Non-compliance with the mandatory requirements
of FCGs is reportable. The mandatory
requirements are indicated by the term “must” in
the FCGs.
There is a mandatory requirement under
Regulation 22AA. That said, this is not a reportable
requirement for the purposes of the Certificate.
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table.
Item Particular
1. The name and portfolio of the Minister who has
the responsibility for the event
Refer to section 39A.
2. The nature of the event
3. The name of the company involved in the event
4. If the company is incorporated in Australia:
(a) the company’s ACN; or
(b) the company’s ARBN (if the company has an
ARBN)
5. If the company is a foreign company:
(a) the jurisdiction in which the company is
incorporated; and
(b) any incorporation identifier provided for the
company in that jurisdiction; and
(c) the company’s ARBN (if the company has an
ARBN)
6. The address of the company’s principal place of
business
7. Whether the company is included in an official list
of a stock exchange and, if so, the name of the
stock exchange
8. Whether the company is:
(a) a company limited by shares; or
(b) a company limited by guarantee; or
(c) a company limited by guarantee and shares;
or
(d) an unlimited company; or
(e) a no liability company
9. Whether the company is:
(a) a public company (a company that is not a
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proprietary company within the meaning of
section 9 of the Corporations Act 2001); or
(b) a large proprietary company; or
(c) a small proprietary company
10.Whether the company is a company with only 1
member
11.If the company is a foreign company, a description
of the legal structure of the company
12.If, before or after the event, there were 1 or more
ultimate holding companies:
(a) the name of each ultimate holding company;
and
(b) if applicable, the ACN or ARBN of each
ultimate holding company; and
(c) for each ultimate holding company that is a
foreign company, the jurisdiction in which it is
incorporated and the incorporation identifier (if
any) provided for the company in that
jurisdiction
--------------------------------------------(3) The notice must also include a short statement about
the event, setting out the particulars in the table.
Item Information
1. The reasons for the event
2. Whether the Commonwealth or a prescribed body
will be under an obligation or will have a liability
because of the event
3. Whether, because of the event, the
Commonwealth or a prescribed body:
(a) has, or will have, control of the company; or
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(b) no longer has, or will no longer have, control
of the company
4. The dollar value of any consideration paid or
received by the Commonwealth or a prescribed
body in relation to the event
5. Any other areas where the interests of the
Commonwealth or a prescribed body have been
affected by the event
--------------------------------------------(4) In this regulation, each of the following terms has the
meaning given by section 9 of the Corporations Act
2001:
Regulation
22C
Audit committees (Act, s
46)
(a) ACN (short for ‘Australian Company Number’);
(b) ARBN (short for ‘Australian Registered Body
Number’);
(c) company limited by guarantee;
(d) company limited by shares;
(e) foreign company;
(f) large proprietary company;
(g) no liability company;
(h) small proprietary company;
(i) ultimate holding company;
(j) unlimited company.
Membership
(1) A Chief Executive who is appointing one or more
members of an audit committee must:
(a) have regard to:
(i) the Agency’s governance framework and
assurance mechanisms; and
(ii) the key risks to the Agency, including risks relating
to program delivery and implementation; and
(b) ensure that each member to be appointed has, in
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Non-compliance is reportable against section 46 of
the FMA Act where the Chief Executive has not
provided terms of reference to the Audit
Committee, including the criteria at
Regulation 22C (1)(a) to (c).
Finance Circular 2011/07
Department of Finance and Deregulation
the Chief Executive’s opinion, appropriate skills
and experience to carry out the committee’s
functions, including the ability to advise the Chief
Executive about how the Chief Executive can
manage the key risks; and
(c)
ensure, as far as practicable, that the
committee includes at least one member who is
not an employee of the Agency (an external
member).
(2)
The Chief Executive must appoint a member of an
audit committee (who may be an external member)
as the Chair of the committee.
(3)
The Chief Executive must give an audit committee
terms of reference that include particulars of:
(a)
(b)
(c)
its functions; and
the frequency of its meetings; and
its membership.
Functions of audit committee
(4)
In addition to subsection 46 (1) of the Act, the
functions of an audit committee include the following,
unless the Chief Executive decides, in writing, that the
committee is not to have a particular function:
(a) reviewing periodically the adequacy of the
Agency’s governance arrangements;
(b) reviewing the operational effectiveness of the
Agency’s risk management framework;
(c) reviewing the adequacy of the Agency’s internal
control environment;
(d) reviewing the adequacy of the Agency’s controls
that are designed to ensure the Agency’s
compliance with legislation;
(e) advising the Chief Executive about the internal
audit plans of the Agency;
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Finance Circular 2011/07
Department of Finance and Deregulation
(f) advising the Chief Executive about the professional
standards to be used by internal auditors in the
course of carrying out audits in the Agency;
(g) as far as practicable, coordinating work programs
relating to internal and external audits;
(h) reviewing the adequacy of the Agency’s response
to reports of internal and external audits;
(i) reviewing the content of reports of internal and
external audits, for the purpose of identifying
material that is relevant to the Agency, and
advising the Chief Executive about good practices;
(j) advising the Chief Executive about action to be
taken on significant matters of concern, or
significant opportunities for improvement, that are
mentioned in reports of internal and external
audits;
(k) advising the Chief Executive on the preparation
and review of the Agency’s financial statements;
(l) providing any other advice to the Chief Executive
about the Chief Executive’s obligations under the
Act.
(5)
A Chief Executive may add to, or vary, the
functions of an audit committee, having regard to:
(a)
Regulation
22D
Estimates
the Agency’s governance framework and
assurance mechanisms; and
(b)
the key risks to the Agency, including risks
relating to program delivery and implementation.
(1) A Chief Executive must prepare budget estimates for
each financial year, and for any other periods directed
by the Finance Chief Executive.
(2) The estimates must be:
(a) prepared in the form specified by the Finance Chief
Executive; and
(b) provided as required by the Finance Chief
Page 53 of 66
Non-compliance is reportable where the Chief
Executive has not prepared budget estimates in
accordance with Regulation 22D.
Non-compliance should be reported where CFO
sign-off of the budget estimates is not provided in
the timeframes required by the Finance Secretary.
These timeframes are communicated through the
Finance Circular 2011/07
Department of Finance and Deregulation
Executive.
Regulation 23
Disposal of property found
on Commonwealth
premises etc (Act s 41)
(1) If:
(a) property (other than money, or property to which
subregulation (2) applies) is found on premises, or
in an aircraft, vessel, vehicle, container or
receptacle, under the control of the
Commonwealth; and
(b) the property is not claimed by its owner within 3
months from the date on which it is so found;
the Commonwealth may dispose of the property.
relevant Estimates Memorandum issued by
Finance.
Non-compliance is reportable where an official
does not dispose of public property by sale unless
it is impracticable, or undesirable.
Non-compliance is also reportable where the
Commonwealth does not pay the owner of the
property in accordance with subregulation 23(4), if
applicable.
(2) The Commonwealth may, at any time, dispose of:
(a) live plants or animals; or
(b) perishable goods; or
(c) articles that are, or could be, dangerous or
noxious;
(d) found on premises, or in an aircraft, vessel, vehicle,
container or receptacle, under the control of the
Commonwealth.
(3) The Commonwealth must dispose of the property by
sale, unless it is impracticable, or undesirable in the
public interest, to do so.
(4) If:
(a) the Commonwealth has disposed of property by
sale; and
(b) the person who was the owner of the property
immediately before the sale makes a claim on the
Commonwealth in respect of the property;
the Commonwealth must pay to the person an amount
equal to the amount for which the property was sold less
the aggregate of any amounts reasonably spent by the
Commonwealth for the storage, maintenance or disposal
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Finance Circular 2011/07
Department of Finance and Deregulation
of the property.
(5) If property is sold by the Commonwealth, any right in
respect of the property vested in a person before the
sale ceases to exist at the time of the sale.
Regulation 24
Finance Minister may
delegate powers
(1) The Finance Minister may delegate to an official, by
written instrument, all of the Finance Minister’s
powers or functions under these Regulations (other
than this power of delegation).
(2) If a delegation by the Finance Minister relates to the
Finance Minister’s powers or functions under
regulation 9 or 10, the Finance Minister may also
delegate the power of delegation under subregulation
(1) in relation to those powers or functions.
Non-compliance is reportable under the
Delegation where an official does not comply with
any directions of the Finance Minister. Where the
section or regulation does not have a compliance
element, the relevant Schedule and Part of the
Delegation should be reported.
(3) In exercising powers and functions under a delegation,
the official must comply with any directions of the
Finance Minister.
(4) This regulation does not, by implication, limit:
Regulation 29
Act of grace payments and
waiver of debts (Act, ss 33
and 34)
(a) any other power of the Finance Minister to
authorise a person to act on behalf of the Finance
Minister; or
(b) any other power of an official to authorise a
person to act on behalf of the official.
(1) If a proposed authorisation under subsection 33 (1) of
the Act would involve, or be likely to involve, a total
amount of more than $250 000, the Finance Minister:
(a) must ask the persons mentioned in subregulation
(3) to give him or her a report on the proposed
authorisation, in the capacity of an Advisory
Committee; and
(b) must not authorise the payment without
considering the report of the Advisory Committee.
(2) If a proposed waiver under subsection 34 (1) of the Act
Page 55 of 66
Non-compliance is not reportable against this
Regulation by all agencies.
Non-compliance can only be reported by Finance,
where the requirements of subregulation 29(1) (a)
and (b) are not met.
Non-compliance is reportable against the
Delegation (Schedule 1, Part 11 to 13 as
appropriate) where a delegate has not exercised
the power in accordance with the directions in the
Finance Circular 2011/07
Department of Finance and Deregulation
would involve, or be likely to involve, a total amount of Delegation.
more than $250 000, the Finance Minister:
(a) must ask the persons mentioned in subregulation
(3) to give him or her a report on the proposed
authorisation, in the capacity of an Advisory
Committee; and
(b) must not authorise the payment without
considering the report of the Advisory Committee.
(3) The persons are:
(a) either:
(i) the Chief Executive Officer of Customs; or
(ii) if the Agency that is responsible for the
matter on which the Committee has to
report is the Australian Customs and Border
Protection Service — a Chief Executive
nominated by the Finance Minister; and
(b) either:
(i) the Secretary to the Department of Finance
and Deregulation; or
(ii) if the Agency that is responsible for the
matter on which the Committee has to
report is the Department of Finance and
Deregulation — a Chief Executive nominated
by the Finance Minister; and
(c) either:
(i) the Chief Executive of the Agency that is
responsible for the matter on which the
Committee has to report; or
(ii) if there is no Agency responsible for the
matter — a Chief Executive nominated by
the Finance Minister.
(4) A member of an Advisory Committee may appoint a
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Finance Circular 2011/07
Department of Finance and Deregulation
deputy to act in his or her place.
(5) An Advisory Committee may prepare its report without
having a meeting
Regulation 30
Finance Minister may
approve payments pending
probate etc
(1) If, at the time of a person’s death, the Commonwealth
owed an amount to the person, the Finance Minister
may authorise payment of that amount to the person
who the Minister considers should receive the
payment.
(2) The Minister may authorise the payment without
requiring production of probate of the will of the
deceased person or letters of administration of the
estate of the deceased person.
(3) In deciding who should be paid, the Finance Minister
must have regard to the persons who are entitled to
the property of the deceased person under the
deceased person’s will or under the law relating to the
disposition of the property of deceased persons.
(4) Subject to subregulation (5), after the payment is
made, the Commonwealth has no further liability in
respect of the payment.
(5) This regulation does not relieve the recipient from a
liability to deal with the money in accordance with law.
(6) This regulation does not have the effect of
appropriating the CRF for the purposes of payments
under this regulation.
(7) This regulation extends to a case in which the
deceased person died before the commencement of
this regulation.
Non-compliance is reportable where, when
deciding who should be paid, a person’s
entitlement to the property of the deceased
person is not taken into account in accordance
with subregulation 3.
Regulation 32
Agencies to co-operate
The old employer must give reasonable assistance
necessary for the new employer to prepare the invoice for
the purposes of regulation 33, including information in
writing about the employee’s entitlements.
Non-compliance is reportable where the old
employer does not give reasonable assistance to
the new employer to prepare the invoice for the
purposes of Regulation 33.
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Finance Circular 2011/07
Department of Finance and Deregulation
Regulation 33
Payment within 30 days of
a correctly rendered
invoice
(1) Within 30 days of the receipt of a correctly rendered
invoice from the new employer, the old employer must
pay to the new employer an amount equal to the sum of
the value, worked out on the basis of the employee’s
salary immediately before leaving the old employer, of:
Non-compliance is reportable where the old
employer does not pay the new employer within
30 days of the receipt of a correctly rendered
invoice.
(a) the employee’s annual leave entitlement at that
time; and
(b) 95% of the employee’s long service leave
entitlement at that time.
(2) In subregulation (1):
long service leave entitlement, for an employee, means:
(a) the period of long service leave to which the
employee is legally entitled; or
(b) if the employee is not legally entitled to any long
service leave — the amount worked out by
multiplying the notional amount of long service
leave to which the employee is entitled for a year
of service by the weighting factor set out in the
following table that applies to the number of years
of service the employee has completed.
Years of service
Less than 1
At least 1 but less than 2
At least 2 but less than 4
At least 4 but less than 6
At least 6 but less than 8
At least 8
Policies
-
Page 58 of 66
Australian Government
Foreign Exchange Risk
Management
Guidelines;
Australian Government
Weighting factor
x
0.5
0.6
0.7
0.8
0.9
1.0
Agencies should consult with Financial Framework Policy
Branch if they require further information on reportable
policies.
Finance Circular 2011/07
Department of Finance and Deregulation
-
-
-
Page 59 of 66
Competitive Neutrality
Guidelines for
Managers;
Australian Government
Cost Recovery
Guidelines;
Guidelines for Issuing
and Managing
Indemnities,
Guarantees, Warranties
and Letters of Comfort;
and
Commonwealth
Property Management
Guidelines
Finance Circular 2011/07
Department of Finance and Deregulation
Part 5 – Frequently Asked Questions
Part 5 Frequently Asked Questions
Page 60 of 66
Finance Circular 2011/07
Department of Finance and Deregulation
Part 5.1 – Frequently Asked Questions
5.1
Frequently Asked Questions
1. How often should I undertake Certificate activities?
Your Chief Executive is required to undertake the Certificate sign-off and report to your
Minister and the Finance Minister annually by 15 October.
Your Chief Executive should determine which internal processes are appropriate for your
specific agency to support annual sign–off. Factors, such as the specific requirements of
the agency, including size, structure, nature of operations and the number of
transactions, may be a consideration.
You should consider undertaking a number of internal reporting rounds within a
financial year to help continually assess breaches and promote improvement.
2. Should I report breaches where staff members have not complied with CEIs?
No. The Certificate does not require your Chief Executive to certify compliance with CEIs.
That said, the Model CEIs generally summarise the key requirements of the financial
management framework and therefore may involve a reportable breach.
Further, CEIs and any quality assurance processes related to them may help you decide
whether there are any non-compliance issues.
3. How should I report breaches where one issue results in breaches of several financial
management framework requirements?
The Certificate does not require you to report consequential breaches. A consequential
breach occurs where a breach of a requirement of the FMA Act or Regulations causes a
breach with another part of the FMA Act or Regulations.
For example, if a staff member did not bank public money on the next banking day (or a
banking day approved by the Chief Executive), this would result in a breach with both
section 10 of the FMA Act and Regulation 17. For Certificate reporting purposes, the
breach should be reported against section 10 of the FMA Act. The breach of
Regulation 17 is a consequential breach, and should not be reported separately.
However, where either Regulation 9 approval and/or Regulation 10 agreement have not
been obtained prior to entering into an arrangement, agencies must report these
instances of non-compliance separately against the relevant regulations.
Non-compliance with Regulation 9 is not “consequential” to the non-compliance with
Regulation 10 as they are two separate and independent requirements. That said, the
consequential breach against Regulation 8 should not be reported separately.
4. Does each breach need to be recorded against a specific requirement of the financial
management framework?
Yes. All known breaches need to be recorded against a specific requirement of the
financial management framework, or the policies listed at Part 2.1.3 of this circular. The
summary of the compliance requirements of the FMA Act and Regulations at Part 4 of
this circular should help you to determine which requirement to report the breach
against.
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Finance Circular 2011/07
Department of Finance and Deregulation
Part 5.1 – Frequently Asked Questions
5. If I am unsure whether there was a breach, how should I report this?
You are only required to report known breaches of the financial management
framework. However, where there are suspected breaches, for example, issues are
being actively investigated, it may be appropriate to note these in the covering letter to
your Minister or at Appendix A to the Certificate.
For example, there may be a possible breach of section 83 of the Constitution, which
would consequently be a breach of section 26 of the FMA Act, where a staff member
used an appropriation in a way that was inconsistent with the purpose of the
appropriation. If the agency is actively undertaking investigations at the time that the
Certificate is signed, then a Chief Executive may wish to disclose this information in the
covering letter and/or the sign-off sheet of the Certificate, but should not report specific
instances, as they are not “known” breaches.
A known breach of the Constitution should be reported against section 26 because
section 27 (5) of the FMA Act provides that a “...drawing right has no effect to the extent
that it claims to authorise the application of public money in a way that is not authorised
by an appropriation”. Where a payment is made without a valid appropriation, then the
effect of section 27 (5) would be to invalidate the drawing rights used to make the
payment and there would be a breach of section 26.
6. Should I report breaches where a staff member has not complied with requirements
of Finance guidance, such as Finance Circulars?
No. Only breaches of the FMA Act, Regulations, delegations or financial management
policies listed at Part 2.1.3 of this circular are reportable in the Certificate.
For example, not complying with guidance on the Finance website regarding the specific
AusTender reporting requirements and procurement publishing obligations is not
reportable for Certificate purposes. That said, agencies should endeavour to meet these
requirements.
A further example is not complying with the 30 day payment policy to small business,
which is expressed in Finance Circular 2008/10 - Procurement 30 Day Payment Policy for
Small Business. This is also not reportable for Certificate purposes.
7. What should I report where there have been several instances of a particular breach, but
I cannot determine the number?
You are required to specify all actual known breaches. You should not report in a vague
or generalised way. For example, you should not report “several,” “a number of” or
“multiple” breaches. The results of sample testing should not be extrapolated.
Where there are large numbers of known breaches, but the exact number is not known,
it is sufficient for you to provide a reasonable estimate, based on the circumstances.
(See Part 2.2 of this circular for further information).
8. Should I list each breach on a separate line in the Certificate?
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Finance Circular 2011/07
Department of Finance and Deregulation
Part 5.1 – Frequently Asked Questions
No. If there were 26 breaches of section 26 of the FMA Act, there is no need to have
26 separate line items reported in Appendix A to the Certificate. It is sufficient to
describe the problem and specify the number of instances of a similar nature. In this
case the total number of instances (26) can be reported on a single line at Appendix A to
the Certificate.
9. How should I report breaches where, on a number of occasions, money was deposited
into a bank account that was not an official account?
These circumstances are reportable against section 11 of the FMA Act and would result
in multiple breaches. You should report each deposit into a non-official account as a
breach.
10. How should I report breaches where the person responsible for initiating 26
fortnightly payroll runs (involving 3,000 cheques) did not have a valid drawing right?
In this case, the actual number of instances of breaches are reportable against
section 26 of the FMA Act. You should report a separate instance of breach for each
payroll run made without the appropriate drawing rights. In total, 26 breaches should be
reported.
(See Part 2.2 of this circular for more information).
11. How should I report breaches where a staff member did not recover a Commonwealth
debt or waived it?
Where a debt was not recovered, and it is not within the exempt categories at
subsection 47(1) (a) to (c) of the FMA Act, and was either not pursued or it was waived,
you should report a breach against section 47 of the FMA Act.
Section 47 of the FMA Act requires Chief Executives to pursue recovery of all debts for
which they are responsible, unless the debt has been written off as authorised by an Act,
or it is considered that the debt is not legally recoverable or that recovery is not
economical to pursue.
12. How should I report breaches where a person outside the Commonwealth, who is
engaged under an authorised FMA Act section 12 arrangement, does not comply with
the requirements of the financial management framework?
If the arrangement with the person outside the Commonwealth is authorised under
section 12 of the FMA Act and, for example, the person did not comply with the
requirement to bank public money the next banking day, this would not be a breach of
the FMA Act.
The outsider is only required to operate within the requirements of section 12 and the
terms and conditions of the contact. There is no requirement for the outsider to comply
with the requirements of the financial management framework. While there is no
requirement for the outsider to comply with the requirements of the financial
management framework, staff members must still meet these requirements. For
example, staff members still require drawing rights when making payments or debiting
an appropriation.
That said, if there is no authorised section 12 arrangement in place, the outsider will
automatically become an allocated official of the agency when they are performing a
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Finance Circular 2011/07
Department of Finance and Deregulation
Part 5.1 – Frequently Asked Questions
financial task. Allocated officials are subject to the requirements of the financial
management framework.
If an allocated official has not complied with the requirements of the financial
management framework, this is reportable for the purposes of the Certificate. From the
example provided above, in relation to banking public money, a breach is reportable
against section 10 of the FMA Act each time the money is not banked.
13. How should I report breaches where the estimates update sign-off was not provided in
the required timeframe?
You should report a breach against Regulation 22D where the sign-off on the estimates
update has not been provided within the timeframe indicated in the relevant Estimates
Memorandum issued by Finance. Regulation 22D requires that a Chief Executive must
prepare budget estimates for each financial year, and for any other periods directed by
the Finance Chief Executive. The estimates must be prepared in the form specified by the
Finance Chief Executive.
14. How should I report the name of a Special Account in the Certificate?
You should report the name of the Special Account as shown on the Chart of Special
Accounts at http://www.finance.gov.au/financial-framework/financial-managementpolicy-guidance/docs/Chart-of-Special-Accounts.pdf.
15. How should I report a breach where Regulation 9 approval and Regulation 10
agreement have not been obtained before entering into an arrangement?
If you have entered into an arrangement (including a contract) without approval
under Regulation 9 and, if required, agreement under Regulation 10, it would result in
separate breaches with both Regulation 9 and 10. It would also result in a breach with
Regulation 8.
That said, you should not report the breach against Regulation 8, as it is considered to be
a consequential breach. If Regulation 9 approval was not obtained, this should be
reported as a breach against Regulation 9. If Regulation 10 agreement was not
obtained, this should be reported as a breach against Regulation 10.
16. How should I report a breach when there is a Machinery of Government (MOG) change
leading to a change in agency functions?
When there is a MOG change leading to a change in agency functions, the Chief
Executive should only report on the affected functions for the period those functions were
actually under his or her control.
Where an agency is abolished, as a result of the MOG change, the Chief Executive of the
successor agency is required to report for the entire reporting period, including the
functions of the abolished agency until the date of abolition.
Where a new agency is created, as a result of a MOG change, the Chief Executive must
report from the date the agency was created.
If a new FMA Act agency is created or a CAC Act body becomes an FMA Act Agency the
Chief Financial Officer of that agency should contact Financial Framework Policy Branch
at finframework@finance.gov.au to discuss the Certificate process.
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Finance Circular 2011/07
Department of Finance and Deregulation
Part 5.1 – Frequently Asked Questions
17. Can someone other than the Chief Executive sign-off the Certificate?
No. Only the Chief Executive (or acting Chief Executive) can sign-off the Certificate.
This responsibility cannot be delegated.
18. What should I report against in Appendix B (financial sustainability) to the Certificate,
for the “current financial year”?
You are required to report on the financial sustainability for the “current financial year”
(i.e. the year which is underway as at the date of signing). This is a different
requirement compared to the Certificate reporting period. For example, for compliance
reporting in October 2011, the compliance certification related to the 2010-11 financial
year. This year’s financial sustainability reporting related to the 2011-12 financial year.
19. When certifying financial sustainability, should I disclose that an operating loss has
been approved, or will be sought, for the current financial year?
Yes. If an operating loss has been approved by the Finance Minister, or you will be
seeking approval, this should be indicated in Appendix B to the Certificate with an
explanation.
20. Are individual agency Certificate results publicly available?
Finance provides an aggregate analysis of annual Certificate results to Parliament each
year. This analysis is at the portfolio group level and does not currently separately
identify agencies.
Agencies should consider the Certificate as a self-improvement process aimed at
identifying and improving compliance with the financial management framework.
Agencies may also wish to consider the implications of Freedom of Information
legislation.
21. What processes should my agency have in place to ensure compliance with the
financial management framework?
Each agency is different and your Chief Executive should consider the size, operations,
structure and activities of your agency when determining the appropriate processes,
systems and controls to put in place to promote compliance with the financial
management framework. That said, the Audit Report contains better practice
suggestions, such as:
-
Page 65 of 66
strengthening quality assurance over survey results reported by business areas
and officials;
use of targeted testing, focusing on higher risk, more significant or high volume
transactions in the agency’s context;
periodically testing key internal controls to determine if they are working as
expected; and
strengthening audit committee oversight of the Certificate process, including
follow-up on any remedial actions.
Finance Circular 2011/07
Department of Finance and Deregulation
Part 5.1 – Frequently Asked Questions
22. Should I survey all staff or undertake sample testing on compliance requirements?
Surveying staff and undertaking sample testing are appropriate methods to gather
Certificate information, and should be used in combination with other methods. You
should choose an appropriate mix of approaches to gather Certificate data and try to
avoid over-reliance on one information source. Potential options include:
self‐assessment surveys completed by office holders, delegates or other staff with
financial management responsibilities; provision of non‐compliance data captured by
business areas with specific financial management framework responsibilities; financial
or other system based checks; sample testing of financial transactions; and targeted
reviews of internal controls.
Once Certificate data has been gathered it is also important to quality assure it for
accuracy. Quality assurance processes should focus on transactions which traditionally
have been higher risk, more significant, or high volume in the agency’s context. You
should undertake selective quality assurance of information provided by business areas
or officials to help ensure its accuracy prior to completing the annual Certificate.
23. What remediation and education should I undertake?
Appropriate remediation and education will depend on the nature and size of your
agency. The Audit Report suggests that Chief Executives should:
–
–
–
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Page 66 of 66
review trends in non-compliance over time at agency-wide and business area
levels to inform remediation strategies. Understand and address the
underlying causes of non-compliance, including any systemic issues;
use analysis of Certificate results to identify staff knowledge gaps or business
areas experiencing particular difficulties, and focus staff training and
development in these areas;
monitor the areas from which staff take part in training and awareness
programs, and encourage participation where required. Consider mandating
tailored training or awareness programs to support staff commencing to
exercise a spending delegation, drawing rights delegation or responsibility for
cost centre management; and
review the implementation of remediation strategies, potentially as part of an
internal audit.
Finance Circular 2011/07
Department of Finance and Deregulation