8.  Approval process

Financial Management and Accountability Act 1997

The FMA Act and associated Financial Management and Accountability Regulations 1997 (FMA Regulations) set down a number of legal obligations which must be followed by officials involved in procuring any property and services for the Australian Government, including via PPPs.

FMA Regulation 8(1) requires officials to have regard to the Commonwealth Procurement Guidelines (CPGs) when conducting procurement processes.

FMA Regulation 9 requires an approver (an official with the delegated power to do so) to be satisfied amongst other things that the proposed expenditure is in accordance with the policies of the Australian Government and will make efficient and effective use of public money.

FMA Regulation 10 prohibits the approval of a spending proposal that is not fully supported by an available appropriation (either in an Act or proposed in a Bill before the Parliament), unless the finance minister has given written authorisation for the approval. FMA Regulation 10 approval will, as a rule, be required for PPP arrangements due to their long duration.

PPP approvals

In addition to meeting the FMA approval requirements that relate to any procurement, there is the obligation to adhere to the approval requirements that apply to PPP projects.

Where a project is less than $20 million, but has the potential to significantly limit or impact on an agency's future activity or the government's fiscal position, approval by the Finance Minister is required.

PPP project development cycle

The following diagram presents the three stages of development in an Australian Government PPP project:

Figure One: PPP project development cycle

Further information on the process and requirements for Australian Government approval of PPP projects is available in FMG No. 17: Public Private Partnerships: Business Case Development available at www.finance.gov.au/publications/fmg-series.