The Financial Management and Accountability Act 1997 (FMA Act) and its associated Regulations, the Financial Management and Accountability Regulations (FMAR) apply to Departments of State, Departments of the Parliament and agencies prescribed by the FMA Regulations.
Section 44 of the FMA Act requires Chief Executives to promote the efficient, effective and ethical use of the Commonwealth resources for which they are responsible.
Regulation 7 of the FMAR11 provides for the Minister for Finance and Administration to issue Commonwealth Procurement Guidelines (CPGs). The CPGs establish the core procurement policy framework. Regulation 8(1) of the FMAR requires officials to have regard to the CPGs when performing duties related to procurement. Other applicable Regulations are:
• FMA Regulation 6 allows Chief Executives to issue instructions (CEIs) on purchasing that focus on the entity's needs. CEIs provide primary operational instructions to acquiring entity officials and are aimed at assisting the officials in carrying out their duties in accordance with legislation and policies in the context of the entity's circumstances and needs
• FMA Regulation 7(3) provides that the CPGs can stipulate requirements relating to the publishing of procurement related information
• FMA Regulation 8(2) requires officials to document their reasons where they do not act in accordance with the CPGs
• FMA Regulation 9(1) requires any persons approving proposals to spend public money to ensure the expenditure is in accordance with the policies of the Commonwealth and will make efficient and effective use of the money and, if the proposal is one to spend special public money12, is consistent with the terms under which the money is held
• FMA Regulation 10 requires written authorisation from the Finance Minister before approving a proposal to spend public money where there is not sufficient available funds in the current appropriation
• FMA Regulation 12 requires approval for expenditure to be documented as soon as possible after the approval is given, and
• FMA Regulation 13 requires that a person must not enter into a contract, agreement or arrangement involving public money unless a spending proposal has been approved in accordance with Regulations 9 and 10.
The Commonwealth Authorities and Companies Act 1997 (CAC Act) and associated regulations and Ministerial Orders establish the financial framework for the corporate governance, financial management, reporting, accountability and audit operations of the Australian Government statutory authorities and corporate entities, incorporated under the Corporations Act 2001, in which the Australian Government has a controlling interest. These CAC Act obligations are in addition to the requirements of the Corporations Law. Many CAC Act bodies are established under specific Commonwealth legislation and their operational activities are regulated by that legislation in conjunction with other relevant Commonwealth statutes.
The CAC Act applies to those Australian Government entities that are legal entities (such as bodies corporate) that:
• are separate from the legal personality of the Commonwealth
• are established for a public purpose by legislation, and
• hold money on their own account.
In the context of procurement and contracting, CAC Act bodies are generally not subject to the CPGs. However, CAC Act bodies listed in the CAC Regulations as subject to section 47A of the CAC Act (relevant CAC Act bodies) can be directed by the Finance Minister to apply the CPGs and the Minister has done so through the Finance Minister's (CAC Act Procurement) Directions 2004.
In circumstances where the CPGs are not a requirement, these and other policies provide useful guidance to all CAC bodies on conducting procurement activities.
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11 The FMARs contain a section, Part Three, that relates to commitments to spend public money
12 Section 16 of the FMA Act defines special public money as public money that is not held on account of the Commonwealth or for the use and benefit of the Commonwealth.