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9  Parliamentary Review

Parliamentary scrutiny of the Government's performance and the way it updates over the year the authority it gave the Government

Introduction

Members of Parliament are informed in the Budget documentation, SOIs and period-end financial reports about:

  • what the Government is aiming to achieve (outcomes)
  • the goods and services the Government purchases to achieve these aims (outputs)
  • the cost of producing these outputs
  • the financial performance expected from departments, SOEs and Crown entities
  • the actual service and financial performance achieved.

There are several mechanisms by which Parliament scrutinises this information and authorises the use of public resources.

Select Committee Review

Parliamentary select committees carry out the following reviews:

  • Estimates examinations: the Estimates (see Chapter Four) are presented at the time of the Budget. The FEC may elect to examine any Vote or refer it to another select committee for examination. Select committees must report to the House on their examinations of Votes within two months of the presentation of the Budget. Each Minister responsible for an appropriation is asked to respond to a standard Estimates questionnaire
  • Examinations of Supplementary Estimates: Following the introduction of an Appropriation (Supplementary Estimates) Bill, the Supplementary Estimates (see Chapter Three) stand referred to the FEC. The FEC itself generally elects to examine Votes contained in the Supplementary Estimates but it may refer them to another select committee for examination
  • Financial reviews of the performance and current operations of departments and Offices of Parliament: Select committees review each department's annual report and responses to a financial review questionnaire that may be based on a standard questionnaire produced by the FEC. Each select committee is required to report to the House within one week of the first sitting day in each calendar year
  • Financial reviews of the performance and current operations of Crown entities, SOEs and certain other public organisations: Each select committee is required to report back to the House on a financial and operational review of Crown entities and/or SOEs allocated to that committee, within six months of the relevant annual report having been presented to the House.

Unappropriated Expenses and Capital Expenditure

Earlier chapters have outlined how Parliament makes appropriations to Ministers to purchase outputs or pay welfare benefits. Unappropriated expenditure occurs when expenditure against an individual appropriation exceeds the maximum level set in the Appropriation Acts for that financial year, or is outside the scope of an appropriation.

One goal of the financial management system is to forecast appropriations accurately, allowing these to be exceeded only where any excess is reasonable and outside the control of a department.

Section 26A of the Public Finance Act empowers the Governor-General to direct the transfer of resources between output expense appropriations in a Vote once a year, provided this increases no appropriation by more than 5%, and the total amount appropriated for all output expenses for that year is not exceeded.

Section 26B allows the Minister of Finance to approve unappropriated expenses or capital expenditure, provided that it is within the scope of an existing appropriation, and does not exceed $10,000 or two percent of the total amount appropriated (whichever is greater).

Orders in Council under section 26A and approvals under section 26Bmust then be included within an Appropriation Bill that applies to that financial year for confirmation by Parliament.

Unappropriated expenses and capital expenditure beyond the section 26B limits, or outside the scope of any appropriation in an Appropriation Act, require validation by Parliament.

Statements of all excess or unappropriated expenditure must be included in the Government and departmental financial statements.

Imprest Supply

Imprest Supply provides interim Parliamentary authority for a government to incur expenses and capital expenditure for any purpose, in advance of receiving an appropriation, so long as this is later appropriated by an Appropriation Act. Every Imprest Supply Act therefore contains a provision requiring all expenses and capital expenditure incurred under its authority to be charged in the manner specified in an Appropriation Act for the same year.

The first Imprest Supply Act for a financial year is passed before the start of that year, normally when Supplementary Estimates for the previous year are passed. The second is passed when the first Appropriation Act for the new financial year is passed.

The main provisions of the first Imprest Supply Act are repealed when the first Appropriation Act comes into force. The second is repealed on the close of the financial year (30 June).

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