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Legislative Assembly for the ACT: 2002 Week 1 Hansard (11 December) . . Page.. 92 ..

MR QUINLAN (continuing):

Today I present the Financial Management Amendment Bill 2001 (No 4). This bill provides for a number of amendments to the Financial Management Act 1996.

As has previously been stated in this chamber, the Financial Management Act is the cornerstone upon which the effective financial management of the territory rests. For this reason, it is essential that the provisions of the act clearly and unambiguously convey their requirements and obligations and also that the act imposes obligations and requirements that result in effective and efficient financial management practices.

The Auditor-General, in his report on the audit of the 2000-01 financial statements, raised concerns regarding the use of the Treasurer's Advance by the previous government, possibly resulting in breaches of the act. The concerns of the Auditor-General were raised before the life of this present government. This government views the remedy of any known or potential weakness to the territory's financial management framework to be important and has moved promptly to address these concerns with the tabling of this bill. The amendments contained in the bill will also clarify the information required to be presented in supplementary budget papers. This government believes the current provisions are unclear.

I would like now to deal with the detail of each of these amendments. Section 13 of the act provides that supplementary budget papers are required to accompany the presentation of a supplementary appropriation bill. The act requires these supplementary budget papers to provide details of the variations proposed to be made to the budget of each department for which the bill provides an appropriation.

The act is however silent on what details need to be provided. The current provisions are also silent on the need to include the impact of any other approved variation, such as transfers of appropriations resulting from changes in administrative arrangement orders, or the ability to update financial statements of other variables, such as revised economic forecasts.

The proposed amendments will remedy this situation by specifying that the variation to appropriations caused by the supplementary appropriation will show the impact of the proposed variation and that a table reconciling the original appropriation to the revised appropriation will be included. This reconciliation table will, as well as including details of variations resulting from the supplementary appropriation, include the impact of any other variation to appropriations approved under other provisions of the Financial Management Act 1996.

There may, however, be occasions when it will not be possible to incorporate an estimate of the impact of Administrative Arrangement Order changes into the supplementary budget papers' financial statements. These would be cases where, because of the timing of changes to appropriations occurring because of changes to administrative arrangement orders and a supplementary appropriation bill, affected agencies may not yet have completed negotiations in respect of changes under the arrangement orders. It is not always simple and it happens with changes of government.

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