Federal Register of Legislation - Australian Government

Primary content

Orders/Other as made
This instrument amends the Finance Minister's Orders (Financial Statements for reporting periods ending on or after 1 July 2011) to mandate financial reporting obligations for Commonwealth entities’ annual financial statements.
Administered by: Finance
Registered 15 May 2013
Tabling HistoryDate
Tabled HR27-May-2013
Tabled Senate17-Jun-2013
Date of repeal 16 May 2013
Repealed by Division 1 of Part 5A of the Legislative Instruments Act 2003

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997 and Commonwealth Authorities and Companies Act 1997

Finance Minister’s Amendment Orders (Financial Statements for reporting periods ending on or after 1 July 2012)

 

Financial Management and Accountability Act 1997 (FMA Act)

Subsection 63(1) of the FMA Act provides that Orders may be made on any matter on which the FMA Act requires or permits Orders to be made and on any matter on which regulations under the FMA Act may be made. Section 49 of the FMA Act provides that the Chief Executive of an Australian Government Agency must prepare financial statements in accordance with Finance Minister’s Orders.  These requirements are currently specified in Schedule 1 to the Finance Minister’s Orders (Financial Statements for reporting periods ending on or after 1 July 2011) (FMOs).

Commonwealth Authorities and Companies Act 1997 (CAC Act)

Subsection 48(1) of the CAC Act provides that Orders may be made on any matter on which the CAC Act requires or permits Orders to be made.  Section 9 of the CAC Act requires the directors of a Commonwealth authority to prepare an annual report in accordance with Schedule 1 to the CAC Act.  Part 1 of Schedule 1 to the CAC Act provides that the annual report must include financial statements prepared by the directors in accordance with the FMOs. These requirements are currently specified in Schedule 1 to the Finance Minister’s Orders (Financial Statements for reporting periods ending on or after 1 July 2011).

Other legislative provisions

The Finance Minister’s Orders are also made under the relevant provisions as set out below:

·          subsection 47(1) of the High Court of Australia Act 1979 in relation to how financial statements must be prepared by the High Court of Australia;

·          subsection 193H(1) of the Aboriginal and Torres Strait Islander Act 2005 in relation to how the accounts and financial statements must be prepared for the Land Account;

·          subsections 50B(2) and (4) of the Defence Service Homes Act 1918 in relation to how financial statements must be prepared by the Defence Service Homes Corporation; and

·          subsection 43(1) and (3) of the Natural Heritage Trust of Australia Act 1997 in relation to how financial statements must be prepared for the Natural Heritage Trust of Australia Account.

The Finance Minister’s Amendment Orders (Amendment Orders) amend existing financial statement reporting requirements set out in the FMOs for Australian Government entities for reporting periods ending on or after 1 July 2012.  

Specifics in relation to the Amendment Orders are as follows:

Finance Minister’s Amendment Orders (Financial Statements for reporting periods ending on or after 1 July 2012)

Clause 1 of the Orders deals with naming of the Amendment Orders.

Clause 2 of the Amendment Orders deals with commencement of the Amendment Orders.

Clause 3 inserts Schedule 1, which amends the requirements for the preparation of annual financial statements for reporting periods ending on or after 1 July 2012, and specifies the legislation to which it applies.

2012-13                       Amendments

The proposed amendments are minor in nature and do not represent new policy or changes to existing policy.

 

Retrospectivity

The retrospective commencement date of this legislative instrument does not adversely affect the rights of persons or otherwise impose liabilities, other than onto the Commonwealth, and as such, does not contravene subsection 12 (2) of the Legislative Instruments Act 2003.

A retrospective commencement date has always been used as this ensures that changes are applicable in the same period in which the amendments are made.

 

Consultation

In accordance with section 17 of the Legislative Instruments Act 2003, all Commonwealth entities required to apply the Amendment Orders, including the Australian National Audit Office, have been consulted on the exposure draft and provided with the opportunity to submit comments.

 

All feedback has been considered and amendments made where appropriate.

 

Attachments

Details of the main amendments to reporting requirements for the reporting periods ending on or after 1 July 2012, are provided in Attachment A.

 

The Statement of Compatibility with Human Rights as required by the Human Rights (Parliamentary Scrutiny) Act 2011 is provided in Attachment B.

 

 

 

 


Explanatory Statement – Attachment A

 

This attachment summarises the main amendments to the FMOs required in the preparation of financial statements for reporting periods ending on or after 1 July 2012 for Australian Government entities.

 

New provisions

1.      Division 4 Definitions

 

A definition for Standard Parameters has been added to enable the term to be referenced in other Divisions within the FMOs.       

 

2.      Division 8 Authoritative Requirements

 

The Standard Parameters document has been given specific reference within the “other government accounting policy and guidance” provisions of section 8.2(b). The specific reference does not represent a change in authority as the Standard Parameters was always captured by the general provisions of this section. The specific reference reflects the increasingly significant role of this document and provides for easier referencing and searching by entities. The Standard Parameters document is available on Finance’s website.

 

Amendments to existing provisions

 

1.      Division 23 Director/Senior Executive Remuneration 

 

The executive remuneration threshold amount has been removed from the FMOs and replaced with a reference to the Standard Parameters document. Moving the threshold to the Standard Parameters document enables Finance to maintain and update the threshold using a process that does not involve legislative amendments. This approach is consistent with that used to disclose other variables used in preparing financial statements such as the rates for market sensitivity analysis and the probability factors used in the long service leave shorthand method.

 

Consequential amendments have been made to the FMOs to reflect the above amendment and some additional housekeeping amendments have been made to maintain a consistent and coherent suite of disclosures.

 


 

Explanatory Statement – Attachment B

 

Statement of Compatibility with Human Rights

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

 

Finance Minister’s Amendment Orders (Financial Statements for reporting periods ending on or after 1 July 2012)

1.      The proposed amendments do not engage any of the applicable rights or freedoms outlined in the Human Rights (Parliamentary Scrutiny) Act 2011, such as encompassed in the International Covenant on Civil and Political Rights.

2.      The proposed amendments do not limit any human rights, nor propose any offences or penalties. 

3.      This legislative instrument is therefore compatible with the human rights and freedoms recognised or declared in the international instruments listed in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Penelope Ying Yen Wong, Minister for Finance and Deregulation