PUBLIC GOVERNANCE, PERFORMANCE AND ACCOUNTABILITY RULE
A rule for the banking of relevant money by Ministers and officials to support
section 55 of the PGPA Act
Please note that this version of the rule for the banking of relevant money to operationalise
section 55 of the PGPA Act has been developed for consultation.
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Public Release 23 January 2014
1. Introduction
Section 55 of the PGPA Act (the Act) provides that Ministers and officials of Commonwealth entities
must bank relevant money promptly and in accordance with any rules or otherwise deal with the
relevant money in accordance with any rules.
2. Intent and Rationale for the proposed Rule
The draft rule reflects closely the provisions of regulations 17, 18 and 19 of the Financial Management
and Accountability Regulations 1997 (FMA Regulations) and the banking provisions in sections 18 and
19 of the Commonwealth Authorities and Companies Act 1997 (CAC Act).
The proposed rule sets out when an amount of relevant money is:
(a) required to be banked (under subsection 55(a) of the Act); and
(b) not required to be banked (under subsection 55(b) of the Act).
An explanation of the Rule is below:
When the received amount must be banked (subsection 55(a) of the Act)
It is envisaged that in almost all circumstances relevant money will be banked. Reflecting provisions
in FMA Regulation 17, the rule requires that money must be banked ‘promptly’ and sets out the
meaning of that phrase.
When the received amount is not required to be banked (subsection 55(b) of the Act)
Similar to FMA Regulations 18 and 19, the rule reflects three instances in which relevant money may
not be banked:
-
when the money will not be accepted by a bank in the place where the money is held;
when, in the opinion of the relevant accountable authority, banking the money would involve
significant costs or administrative difficulty; and
when the money has been withdrawn from a bank or retained for the purpose of making
payments.
The rule also provides a requirement that money which will not be accepted by a bank should be
treated as public resources. This is a less restrictive provision than that which currently exists in FMA
Regulation 18, which requires that ‘an official who receives public money in a non-bankable currency
must take reasonable steps to safeguard the money’, as it has been found, in order to meet this
requirement a number of agencies have had to take disproportionate action in relation to these funds
in terms of the degree of security around how the funds are held. By treating these funds as public
resources the accountable authority of the entity is responsible for the proper use and management
of public resources and has a duty to establish and maintain appropriate systems relating to risk and
control.
3. Comparable Existing Legislative Requirements
Regulations 17, 18 and 19 of the FMA Regulations, and sections 18 and 19 of the CAC Act (see
Attachment A).
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4.
Proposed rule for the banking of relevant money by Ministers and officials
Banking of relevant money by Ministers and officials
The purpose of this rule is to prescribe requirements that relate to the banking of relevant money by Ministers
and officials.
(1) This rule sets out:
(a) when an amount of relevant money that is received by a Commonwealth entity is required
to be banked, under subsection 55(a) of the Act; and
(b) when an amount of relevant money that is received by a Commonwealth entity is not
required to be banked, under subsection 55(b) of the Act.
When relevant money must be banked (subsection 55(a) of the Act)
(2) A Minister or an official of a Commonwealth entity who:
(a) receives relevant money; or
(b) receives money that becomes relevant money on receipt
must bank the money promptly, unless the money is of a kind described in subsection (5).
(3) “Promptly” means:
(a) the next banking day; or
(b) the next banking day on which it is feasible for the amount to be banked; or
(c) a banking day approved by the relevant accountable authority for the purposes of this rule.
(4) “Banking day” for a bank means a day on which the bank is open to the public for general
banking business, other than:
(a) a Saturday; or
(b) a Sunday; or
(c) a day that is a public holiday in the place where the money is held.
When relevant money is not required to be banked (subsection 55(b) of the Act)
(5) A Minister or an official of a Commonwealth entity who receives relevant money is not required
to bank the money, when:
(a) the money will not be accepted for banking by any bank in the place where the money is
held; or
(b) the banking of the money, in the opinion of the relevant accountable authority, is
uneconomical; or
(c) the money was withdrawn from a bank or retained for the purpose of making payments
(6) Relevant money as described in subsection (5)(a) should be treated as relevant property.
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5. Date of Effect
The substantive provisions of the PGPA Act will commence on 1 July 2014 and it is intended that this
rule will commence at the same time.
6. Guidance Material
Finance will ensure relevant guidance is updated or prepared as necessary for the PGPA Act and
Rules.
7. Linkages to other Elements of Reform
The proposed rule will operate in conjunction with the following element of the PGPA reform:


The entering into agreements with banks to conduct banking business (sections 53 and 54
PGPA Act), with requirements to be set out in the Finance Minister’s delegation to
Accountable Authorities.
Sections 58 and 59 provide the basis for investment by the Commonwealth and corporate
Commonwealth entities.
8. Impact
The proposed rule aligns closely with existing FMA regulations, which are considered appropriate,
and therefore, minimal impact is expected on existing non-corporate Commonwealth entities. For
corporate Commonwealth entities minimal impact is expected from the rule as it is consistent with
current CAC Act requirements and, we understand, reflects normal operating procedures.
9. Issues for consideration and feedback


Is the drafted rule appropriate?
Are there opportunities for reform that should be considered at this time?
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Public Release 23 January 2014
Attachment A
Financial Management and Accountability Regulations 1997
Part 6—Banking of public money etc
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.
Note:
Section 10 of the Act provides that money includes cheques and similar instruments.
(2)
The official must bank the money as soon as practicable, but in any case not later than:
(a) the next banking day; or
(b) a banking day approved by the Chief Executive for this paragraph.
Note 1: Section 10 of the Act imposes a penalty for a failure to bank public money as required by
these Regulations.
Note 2: Section 11 of the Act provides that an official must not deposit public money in any
account other than an official account.
Note 3: Chief Executives may approve other banking days for particular kinds of money (for
example, specified cash). The days may be determined in the Chief Executive Instructions.
(3)
A banking day for a bank is a day on which the bank is open to the public for general
banking business, other than:
(a) a Saturday; or
(b) a Sunday; or
(c) a day that is a public holiday in the place where the money is received.
18 Public money in non-bankable currency (Act s 10)
(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-bankable currency means:
(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.
Note 1: Section 10 of the Act imposes a penalty for a failure to bank public money as required by
these Regulations.
Note 2: Section 10 of the Act provides that money includes cheques and similar instruments.
19 Withdrawals involving internal transfers (Act s 13)
(1)
For section 13 of the Act, an official may withdraw an amount from an official account for
the purpose of depositing the amount into another official account if no appropriation and drawing
right is relied on in relation to the transfer.
(2)
For section 13 of the Act, an official may withdraw an amount from an official account for
the purpose of establishing or reimbursing a cash advance established for a purpose, and
maintained in a manner, approved by the Chief Executive.
(3) In subregulation (2):
cash advance means public money, in the custody or control of an official, and held outside an
official account, for a purpose of making payments of public money in cash.
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Note 1: Subregulations (1) and (2) authorise officials to make internal transfers (including within
an Agency) of public money, in circumstances in which no real or notional payment is being made
and no appropriation is required, for example, where an Agency transfers money from one of its
own official accounts to another (or to the custody of an official), or money is transferred from the
Official Public Account to an Agency’s account.
Note 2: Section 13 of the Act provides that a withdrawal of money from an official account that is
not authorised by these Regulations carries a penalty.
19A Withdrawals for payments or notional payments involving drawing rights (Act s 13)
(1)
For section 13 of the Act, an official may withdraw an amount from an official account for
the purpose of spending the amount under an appropriation if the official has been issued with a
relevant drawing right under paragraph 27(1)(a) of the Act.
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Commonwealth Authorities and Corporations Act 1997
Division 3—Banking, investment etc.
18 Banking and investment (authorities other than GBEs and SMAs)
(1)
This section applies to a Commonwealth authority that is not a GBE or SMA.
(2)
bank.
(3)
The authority must pay all money received by it into an account maintained by it with a
The authority may invest surplus money:
(a)
on deposit with a bank; or
(b)
in securities of the Commonwealth or of a State or Territory; or
(c)
in securities guaranteed by the Commonwealth, a State or a Territory; or
(d)
in any other manner approved by the Finance Minister.
(4)
A provision in the authority’s enabling legislation to the effect that the authority must not
enter into a contract involving the expenditure or payment of more than a specified amount of
money without the approval of a specified person does not apply to a contract for the investment of
money under subsection (3), unless the provision expressly states that it applies to such a
contract.
(5) In this section:
surplus money means money of the authority that is not immediately required for the purposes of
the authority.
19 Banking and investment (GBEs and SMAs)
(1)
This section applies to a Commonwealth authority that is a GBE or SMA.
(2)
bank.
The authority must pay all money received by it into an account maintained by it with a
(3) The authority may invest surplus money:
(a)
on deposit with any bank; or
(b)
in securities of the Commonwealth or of a State or Territory; or
(c)
in securities guaranteed by the Commonwealth, a State or a Territory; or
(d)
in any other manner that is consistent with sound commercial practice.
(4)
A provision in the authority’s enabling legislation to the effect that the authority must not
enter into a contract involving the expenditure or payment of more than a specified amount of
money without the approval of a specified person does not apply to a contract for the
investment of money under subsection (3), unless the provision expressly states that it
applies to such a contract.
(5) In this section:
surplus money means money of the authority that is not immediately required for the
purposes of the authority.
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Public Release 23 January 2014
Attachment B
Public Governance Performance and Accountability Act 2013
Division 3—Banking
53
Banking by the Commonwealth
(1)The Finance Minister may, on behalf of the Commonwealth, enter into an agreement with a
bank relating to the conduct of the banking business of the Commonwealth, including in relation to opening
and maintaining bank accounts.
(2)The agreement:
(a)
must not provide for overdraft drawings by the Commonwealth unless it provides
for each drawing to be repaid within 30 days; and
(b)
must be in accordance with any requirements prescribed by the rules.
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 balance.
(3)The Finance Minister must, on behalf of the Commonwealth, open and maintain a central bank
account with the Reserve Bank of Australia.
(4) The rules may prescribe matters relating to banking by the Commonwealth, except in relation
to the central bank account referred to in subsection (3).
54
Banking by corporate Commonwealth entities
The rules may prescribe matters relating to banking by corporate Commonwealth entities.
55 Banking of relevant money by Ministers and officials
A Minister, or an official of a Commonwealth entity, who receives relevant money (including money
that becomes relevant money upon receipt) must:
(a) cause the money to be banked promptly and in accordance with any requirements
prescribed by the rules; or
(b) otherwise deal with it in accordance with the rules.
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Public Release 23 January 2014