The Treasury

Global Navigation

Personal tools

Treasury
Publication

A Guide to the Public Finance Act (2005)

Departmental Financial Management and Reporting

Key Points

  • Chief executives are responsible for the financial management and financial performance of a department and for ensuring that the department complies with legislative reporting requirements.

Financial management and financial performance

  • A chief executive’s key financial management responsibilities are to establish a system of internal control and ensure that the department’s accounting system can produce reliable information.
  • A range of other financial management responsibilities exist. These responsibilities are established in a variety of ways including the Act itself, delegations, Treasury Instructions, Minister of Finance Instructions, regulations and decisions made by, or under the authority of, Cabinet. These responsibilities include responding to Treasury requests for information, risk management, complying with financial delegations, managing trust money and operating bank accounts.

Reporting requirements

  • Departments are required to produce financial statements and other information about their operations prior to and at the end of each financial year. Currently this information is provided in statements of intent and annual reports. Chief executives are required, in an explicit statement of responsibility, to acknowledge their responsibility for the financial and non-financial information in these reports.
  • Modified reporting requirements apply to security and intelligence agencies, Offices of Parliament and newly established, disestablished or changed agencies.
  • In common with appropriations and whole-of-government financial statements, departmental financial statements are prepared using the accrual basis of accounting and in accordance with generally accepted accounting practice (GAAP).
  • The Auditor-General is responsible for providing an independent opinion on the annual financial statements and statement of service performance.

Responsibilities beyond the departmental boundary

  • A departmental chief executive may also have financial management and reporting responsibilities that extend beyond the departmental boundary. For example, the department may have delegated authority to administer or manage specific non-departmental revenues, expenses, assets and/or liabilities on behalf of the Government and any appropriations for expenses or capital expenditure related to such items.

Introduction

This Chapter covers departmental financial management and reporting obligations, which are found primarily in Parts 4 and 5 of the Public Finance Act. It includes discussion of:

  • the chief executive’s responsibility for the financial management and reporting obligations of a department
  • the nature of those obligations, including the key requirements to report publicly at the start and end of each financial year on a department’s intended and actual performance
  • determining the boundaries of the departmental reporting entity, and
  • how these obligations have been modified for application to Offices of Parliament, intelligence and security departments, and for entities being established, disestablished or restructured.
Page top