Financial Accountability Act and subordinate legislation - 1 July 2009 commencement
Legislation Update
With the expiration of the Financial Management Standard 1997 (FMS) on 1 September 2007, Queensland Treasury took the opportunity to review and modernise the Financial Administration and Audit Act 1977 and its subordinate legislation (Financial Management Standard 1997 and Financial Administration and Audit Regulation 1995).
The review has been completed and resulted in the introduction of the Financial Accountability Bill 2009 into Parliament on 22 April 2009. The Bill was passed on 19 May 2009.
The Act will commence by proclamation on 1 July 2009. A copy of the Financial Accountability Bill is available on the Legislation website.
The subordinate legislation, consisting of the Financial and Performance Management Standard and the Financial Accountability Regulation, have now also been approved, and will commence operation on 1 July 2009. Copies of the new subordinate legislation are also available on the Legislation website.
Implementation of new Legislation, Standard and Regulation
The following information is provided to clarify a number of issues that have been raised by agencies in connection with the pending legislative and regulatory changes.
1. Annual Reports and Financial Statements
With the new legislation scheduled to commence on 1 July 2009, there has been some debate as to whether the financial statements and annual reports will be prepared under the new legislation. The new Standard contains a transitional provision allowing agency annual reports and financial statements for the financial year ended 30th June 2009 to be prepared under the provisions of the Financial Administration and Audit Act and subordinate legislation, NOT the new Financial Accountability Act. In the interests of best practice reporting, agencies are strongly encouraged to strive to publish quality annual reports as early as possible.
2. Chief Finance Officer and Head of Internal Audit
Qualifications
The Act and subordinate legislation introduces new provisions relating to mandatory qualifications for the positions of Chief Finance Officer (CFO) and head of internal audit (HIA). The minimum responsibilities for these roles are contained in Sections 77 and 78 of the Act, which is available from the link above. The Regulation provides the minimum qualifications for the officers in these roles.
Chief Finance Officer:
- Certified Practicing Accountant (CPA Australia), or
- Chartered Accountant (Institute of Chartered Accountants in Australia), or
- Professional National Accountant (National Institute of Accountants), or
- Another qualification from an overseas accounting body that is recognised by at least 2 of the above organisations.
Head of Internal Audit:
- Ordinary membership of the Institute of Internal Auditors in Australia , or
- Certified Practicing Accountant (CPA Australia), or
- Chartered Accountant (Institute of Chartered Accountants in Australia), or
- Professional National Accountant (National Institute of Accountants), or
- Another qualification from an overseas accounting body that is recognised by at least 2 of the above organisations.
Transitional provisions
The Regulation provides transitional provisions for current CFOs or HIAs who do not hold the qualifications mandated under Act and subordinate legislation - to undertake the required study to obtain those qualifications. Use of these transitional periods is conditional on the nominated officers enrolling in and actively working towards obtaining the required qualifications.
Chief Finance Officer:
- Where the employee has the qualifications that will allow for enrolment in one of the above professional bodies, up to 5 years from 1 July 2009.
- Where the employee does NOT have the required qualifications, a period not exceeding 10 years from 1 July 2009.
Head of Internal Audit:
- 5 years from 1 July 2009.
3. Systems appraisals
In the drafting of the new Act and subordinate legislation, the requirement under s72 of the Financial Management Standard 1997 relating to 3 yearly systems appraisals has been removed. It has been replaced by s77 of the new Act, where the CFO is required to provide an annual statement to the accountable officer as to whether the internal controls of the agency are operating efficiently, effectively and economically. While the contents of this statement will not be prescribed, the Standard provides, as a minimum, that the statement must include reference to the keeping of financial records, compliance and control systems, system changes since balance date and assurances from external service providers.
4. Exemptions from Financial Management Standard
Agencies should note that exemptions approved by the Treasurer under section 46LC of the Financial Administration and Audit Act 1977 will lapse with the commencement of the new Act and subordinate legislation on 1 July 2009. Those agencies which have been granted an exemption under the old legislation will need to apply to the Treasurer under section 59 of the new Act for approval of a new exemption, if an exemption is still considered necessary.
Transition to the new Act - Assistance
1. Financial Accountability Handbook
To assist agencies in the transition to the new legislative and regulatory framework, Financial Management Branch is developing the Financial Accountability Handbook that will be available to all agencies as a point of reference during the transition to the new legislative environment. The initial version of the Handbook is due for release mid to late June 2009.
2. Financial Management Information Sessions
Financial Management Branch is holding two FMIS (Financial Management Information Sessions) on 24 and 25 June 2009. These sessions will focus on the new Act, its subordinate legislation and the Financial Accountability Handbook. Information about the FMIS can be obtained by emailing fmbregistrations@treasury.qld.gov.au.
Schedule – Consultation Papers
Consultation papers seeking feedback from interested parties were released as part of the review of the previous Act and its subordinate legislation, and many of the suggestions received were incorporated into the new legislative and regulatory framework. The attached link has been provided to the consultation papers for reference purposes.
Contacts
If agencies have any questions in relation to the review of the FAA Act and FMS, please contact:
- Lee Clayton, Principal Accountant, Financial Management Branch
Telephone: (07) 3224 2922 - David Ryan, Senior Accountant, Financial Management Branch
Telephone: (07) 3224 6058.
Related links
Last reviewed 25 June 2009
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