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Legislative Assembly for the ACT: 2002 Week 9 Hansard (21 August) . . Page.. 2648 ..

MR QUINLAN (continuing):

Also, departmental chief executive officers provide detailed information of their cash funding needs, which Treasury monitors and reconciles with appropriation schedules. Warrants, on the other hand, are generally issued at the beginning of the financial year for the full amount of the appropriation in the appropriation act. In practical terms, therefore, warrant has existed only as a ceremonial process for many years, without providing any additional rigour in administrative controls that already exist for the disbursement of cash.

Amendments proposed in this bill provide for the removal of the requirement for a warrant to be signed in order to authorise a payment of money from the territory banking account. These amendments recognise that the use of warrant provides little effective additional value to other cash disbursement controls and remove a number of internal inconsistencies within the act. To ensure that there is an effective overall control mechanism for the disbursement of public money, the requirement will be retained that payments of public money from the territory banking account can be made only in accordance with an appropriation or other enabling provision of the Financial Management Act or other legislation.

Section 18A of the act allows for payments to be made in anticipation of appropriation. This section was introduced to allow departments to anticipate an approved appropriation and thereby meet contractual obligations that required payment in June to take advantage of any discounts. This section undermines the integrity of the budget process, whereby expenditures are closely evaluated, and the Legislative Assembly's role in scrutinising appropriations. Further, expenditure of the nature envisaged under this section could be appropriately authorised only either by a Treasurer's Advance or supplementary appropriation. Amendments proposed in this bill therefore provide for section 18A to be deleted from the act.

The act currently provides that, where a department has appropriated a repayable loan, the budget papers must include a statement that sets out the conditions under which a repayable loan is to be given, including the requirement regarding the time within which the loan must be repaid. The act is, however, silent on what the disclosure requirements are, should the conditions of a repayable loan change. This government believes it is appropriate that, where the conditions of an appropriated repayable loan are varied over the term of that loan, the act should provide for some mechanism of accountability to the Legislative Assembly.

Amendments proposed in this bill, therefore, provide that, where the Treasurer amends the conditions of an appropriated repayable loan, he must do so in writing and state the reasons for making the amendment. The amendments also provide that the Treasurer's written statement of reasons is a notifiable instrument and will therefore be available for scrutiny on the ACT Legislation Register. Further, the amendments provide that, where the conditions of an appropriated repayable loan have been varied over the year, the department's annual report must include a statement of the change and the reasons for the change. These amendments will ensure that this Assembly is constantly kept up to date on any changes to conditions applying to these types of repayable loans.

The act allows departments to establish their own departmental banking accounts. This is premised on the principle of devolution of cash management to individual departments. As members would be aware, it is into these departmental accounts that appropriated

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