FINANCIAL MANAGEMENT TOOLKIT

Transcription

1 FINANCIAL MANAGEMENT TOOLKIT Reissued: September 2015

2 Department of Treasury and Finance Level 6, State Administration Centre 200 Victoria Square ADELAIDE SOUTH AUSTRALIA 5000 AUSTRALIA Financial Management Team Telephone: Facsimile: Website: Published by the Department of Treasury and Finance Reissue date: 10 September 2015 State of South Australia The Financial Management Toolkit is a companion document to Treasurer s instructions. It has been developed to assist SA public authorities with the implementation of the requirements of these instructions. It contains guidance, examples and checklists. Reissue date: September

3 TABLE OF CONTENTS Framework for financial management in the SA Public Sector... 4 About the Toolkit... 6 Background... 7 Internal control environment... 8 Financial management compliance program Flowchart Framework for financial management compliance Financial management reporting Flowchart Framework for financial management reporting Guidance TI 5 Debt Recovery & Write offs Guidance TI 11 Payment of Creditors Accounts Guidance TI 13 Expenditure incurred by Ministers and Ministerial Staff Guidance TI 15 Grant Funding Guidance TI 25 Taxation Policies Guidance TI 28 Financial Management Compliance Programs Financial management compliance checklist Part 1 - Financial management accountability Part 2 - Financial accounting and budgeting Part 3 - Financial management reporting Financial reporting checklist Administrative restructure checklists Transferee entity Transferor entity Risk management policy statement issued by the Premier and Treasurer Bibliography Reissue date: September

4 FRAMEWORK FOR FINANCIAL MANAGEMENT IN THE SA PUBLIC SECTOR The Framework for Financial Management applying in the SA Public Sector has as its foundation the Public Finance and Audit Act The Act regulates the receipt and expenditure of public money and provides for auditing the receipt and expenditure of public money and for examination of the degree of efficiency and economy with which public resources are used. There are numerous other Acts of Parliament that address certain aspects of financial management in the State refer to page 16 for a listing of financial management and related legislation in SA. Treasurer s instructions issued pursuant to section 41 of the Public Finance and Audit Act 1987 deal with: requiring accounts to be maintained and records to be made and kept by the Treasurer and public authorities and setting out the form and content of those accounts and records; setting out the form and content of financial statements that must be prepared by the Treasurer and public authorities pursuant to the Public Finance and Audit Act 1987; requiring that procedures, set out in the instructions, be followed in the course of financial administration by the Treasurer and public authorities; requiring that procedures, set out in the instructions, be followed in the operation of special deposit accounts; setting out the procedures and processes with respect to the payment of certain debts by a public authority in connection with a scheme to provide for the payment of interest due to the late payment of specified classes of debts; and regulating matters related to the receipt, expenditure or investment of money, the acquisition or disposal of property, or the incurring of liabilities, by the Treasurer and public authorities. The Commissioner for Public Sector Employment and the State Procurement Board have also issued sub-ordinate legislation pursuant to their respective Acts. Refer to page 16 under sub-ordinate legislation for a listing of such instruments. In addition, policies are also issued by the Department of Treasury and Finance, the Department of the Premier and Cabinet and the Department of Planning, Transport and Infrastructure, which enhance the framework for financial management and other aspects of public sector management in South Australia. These are listed on page 16 under other financial management policies/requirements of the State. Public authorities should ensure compliance with all mandatory requirements of each element forming part of the overall framework for financial management. Treasurer s Instruction 28 Financial Management Compliance Program requires a financial management compliance program to provide assurances with respect to those elements of the above framework that specifically relate to financial Reissue date: September

5 management. The Financial Management Toolkit provides guidance in relation to implementing the requirements of Treasurer s instructions. Reissue date: September

6 ABOUT THE TOOLKIT Authority Statement The Financial Management Toolkit contains guidance for agencies. Its requirements are not mandatory. Objective The Financial Management Toolkit is intended to assist Chief Executives and responsible officers with their financial management responsibilities, through providing guidance on core financial management controls, procedures, and financial management compliance programs. It contains guidance and checklists in relation to internal controls, compliance programs, financial reporting and administrative restructures. It does not include all possible policies, procedures and systems that may be used to ensure compliance with Treasurer s instructions. Definitions Terms have the same meaning as contained in Treasurer s instructions. Reissue date: September

7 BACKGROUND The Treasurer issued the Financial Management Framework in 1998 to assist SA public authorities with establishing essential controls and processes for good financial management. Most SA public authorities have now established and documented these controls. In late 2006, the Department of Treasury and Finance commenced a comprehensive review of the Financial Management Framework. It was considered appropriate to review the Financial Management Framework at that time due to a number of factors including: since 1998, there had been significant changes in financial management practices and new or revised pronouncements have been issued by relevant authorities such as the Australian standard on Compliance Programs and Risk Management; and changes to Australian accounting and auditing (external and internal) standards, including those resulting from the international harmonisation program; and in 2006, the Department of Treasury and Finance undertook a review of Treasurer s instructions. As the Financial Management Framework was issued pursuant to a Treasurer s instruction, it was appropriate to review this document as part of that review. Following the completion of the review of the Financial Management Framework, the Financial Management Framework was withdrawn (effective 30 June 2008); and a revised Treasurer s Instruction 2 Financial Management and a new Treasurer s Instruction 28 Financial Management Compliance Program, were issued, effective 1 July The Department of Treasury and Finance has issued the Financial Management Toolkit to provide guidance to assist agencies with their financial management responsibilities. Acknowledgement The Financial Management Team within the Public Finance Branch of the Department of Treasury and Finance wishes to express gratitude to SA public authorities and officers of the Auditor-General s Department for their input into the development of the Financial Management Toolkit. Key references used in developing the Financial Management Toolkit were the Australian standard Compliance Programs and the Financial Management Framework (withdrawn). A full bibliography is included at pages 145 to 146. Reissue date: September

8 INTERNAL CONTROL ENVIRONMENT The Chief Executive has a responsibility to establish and maintain an appropriate internal control environment in accordance with Treasurer s Instruction 2 Financial Management. Internal controls are processes (including elements such as policies, procedures and systems) that are established, operated and monitored by officers responsible for governance and management of the public authority, to provide reasonable assurance regarding the achievement of the public authority s objectives. Internal controls are designed to provide reasonable assurance to the responsible Chief Executive / Governing Authority / management in relation to the: effectiveness and efficiency of operations; reliability of management, statutory, financial and taxation reporting; appropriate management and control of risk; and compliance with applicable legislation, sub-ordinate legislation and other financial management policies of the State. An effective internal control environment involves the systematic review, appraisal and reporting of financial (including management, statutory, taxation and budgetary) and operational control systems and their effectiveness, including (but not limited to) the: relevance of established plans, policies, and procedures and the extent to which the public authority is complying with these; review of committees, operations and programs and outcomes to ascertain whether results are consistent with established objectives and goals; economy and efficiency with which resources are employed; appropriateness of the public authority s personnel and supervision arrangements; integrity of information systems; extent to which assets are accounted for and safeguarded from losses (eg waste, extravagance, inefficient administration, fraud or poor value for money); appropriateness, reliability and integrity of financial and other management information, including the ability to identify, measure, classify, report and act upon that information; extent to which financial management, financial administration and financial reporting matters comply with applicable legislation, sub-ordinate legislation and other financial management policies of the State; and monitoring of information and appropriateness of action taken. Reissue date: September

9 Each public authority will develop an approach to assessing the design and effectiveness of controls that reflects their unique circumstances. Professional judgement It is anticipated that each Chief Executive and responsible officers in a public authority will exercise professional judgement in the: establishment and maintenance of an appropriate model for governance, risk and internal control management; determination and application of materiality; selection and scope of appropriate procedures and policies; assessment and evaluation of internal controls; and extent of documentation of procedures, communications, results, reviews and conclusions. Policies, Procedures and Systems Background Treasurer s Instruction 2 Financial Management requires policies, procedures and systems documentation to be reviewed on a regular basis, revised where necessary and be readily available to all relevant officers of the authority. The development, implementation and review of policies, procedures and systems is a continual process as can be seen from the diagram below. As part of this process, it is important to remember, each Chief Executive and the responsible officers exercise professional judgment in the establishment and maintenance of appropriate policies, procedures and systems documentation. Figure 1 Process of development and review of policies, procedures and system documentation Needs analysis and/or Gap identification Maintenance / Review Drafting/Development and/or Amendment Communication and/or Implementation Consultation and Finalisation Approval / Authorisation Reissue date: September

10 The significance of undertaking at critical points in time (eg annually, at times of organisational policy or system change) a needs or gap analysis cannot be understated. Such an analysis will facilitate effective planning and prioritisation for the timely development and/or amendment of policies, procedures and system documentation. Documentation of Policies, Procedures and Systems Documentation should: be written in plain English; be current, relevant and useful; have context; consider risks and opportunities; consider impact and implications; identify benefits (and any associated dis-benefits); where possible have results/outcomes/aspects that are measurable (old saying what gets measured gets done); identify an owner and/or an expert to assist with implementation issues; and provide for common sense to prevail. Review of Policies The Chief Executive and responsible officers exercise judgement in relation to the methodology and/or processes required to maintain agencies policies and procedures. Examples of such methodologies / processes which are consistent with the requirements of TI 2 include: 1. Monitoring via Policy and Procedure Review Log Agency A maintains a Policy and Procedure Review Log (Review Log). This document records potential amendments required to policy and procedure documentation. Items listed on the Review Log may have resulted from changes to/from legislation, mandatory requirements, central agency guidance, systems including enhancements, staff movements, business practises and/or processes and administrative changes. The Review Log is monitored and on a regular basis an assessment and evaluation of those issues identified is performed and the respective policies and procedures are revised where necessary. Every one or two years, if necessary, policy and procedure documentation is considered in its entirety. Considerations included at this time include but are not limited to environmental scan, business efficiencies, relevance, governance issues, need etc. Reissue date: September

11 2. Co-ordinated approach rolling basis All of Agency B s policies and procedures include a review date and a contact person on each policy and procedure. This review date (relates to a policy being considered in its entirety) is generally every two years but in some instances, it is more appropriate for the policy or procedure to be considered in its entirety on an annual or more regular basis. The review dates are structured such that policies and procedures are considered in their entirety on a rolling basis so that, in any given year, at least 50% of all policies and procedures are reviewed, in their entirety. All reviews are co-ordinated and managed by a nominated officer. The nominated officer forwards an to the respective contact person for the respective policy or procedure three months before the review date. At this time, the nominated officer also follows up with the respective contact person for those policies and procedures which are not due to be considered, in their entirety, until the following year. This follow up requests the contact person to look at the policy and/or procedure in relation to mandatory requirements, environmental matters and business activities and to advise whether, based on their evaluation and assessment, any ad-hoc amendments are requirement to the policy and/or procedure to ensure it remains current, relevant and useful. 3. Environmental scan On an annual basis, Agency C performs an environmental scan of changes in legislation and other mandatory requirements, central agency guidance, systems, staff movement, business practices etc. An assessment and evaluation of these changes is performed and where necessary, the respective policies are updated. The assessment and evaluation may result in certain policies being updated in the current year and other policies being updated in the following year. The assessment and evaluation considers the purpose, scope, nature and any risks and opportunities associated with the document and respective changes. Each branch/division within Agency C maintains a Procedures Register which records all documented procedures. On a regular basis, the owner of the procedures looks at the documents in relation to work instructions and where required, revises the documentation. Agency C also has a policy that requires a review of its policies and procedures, in their entirety, every two years, or earlier, if necessary. Consideration relate to improvements in business practices, efficiencies, whether policies and procedures are still needed, impact and implications, risks and opportunities etc. 4. Complete review Agency X is a small agency. It has only a few policies and procedures. All policies and procedures are reviewed in their entirety on an annual basis. 5. Approval of Policies and Procedures Policies and procedures need to be appropriately approved in accordance with the agency s delegations of authority. Reissue date: September

12 Availability of Policies and Procedures Policies and procedures should be available to relevant personnel at the point of use, because they are an integral part of operations, governance, accountability and financial administration. Policies and procedures need to be readily available to be used. This may adversely affect agency operations, the internal control environment, governance, financial management etc. Planning, operational, monitoring and financial management policies and procedures are fundamental to avoiding or minimising impact on an agency s operations, organisational structures and financial management arrangements and/or to reduce the time to recover from and/or manage events, matters or issues. Aspects to consider: Are there mechanisms for the introduction and promotion of new and/or modified policies and procedures within the agency eg , bulletins, briefings, training, meetings, internal websites etc? Do you use paper based or electronic format eg external web, intra sa or internal websites, CD rom etc? Sensitivity, confidentiality and operational access and use by appropriate and relevant employees. Functions or responsibilities under an outsourced service arrangement Certain financial management functions and responsibilities can be subject to an outsourced service arrangement, including an arrangement with Shared Services SA. Where this occurs, responsibilities will be defined in an agreement between the public authority and the service provider for key tasks, activities and controls associated with the outsourced financial management functions. Public authorities are to apply the requirements of Treasurer s Instruction 2 Financial Management to those allocated responsibilities agreed to be under the management control of the public authority. The requirement to develop, implement, document and maintain a robust and transparent financial management compliance program remains with the Chief Executive. Financial Management Compliance checklist The checklist provided on pages 53 to 76 will assist public authorities in assessing the effectiveness of their internal control environment. An effective internal control environment is critical to demonstrate: performance against public sector governance requirements, ethics and standards; that accountability requirements have been discharged; and that Parliamentary and community expectations have been met. Reissue date: September

13 Aspects of an internal control environment Treasurer s Instruction 2 Financial Management mandates that each SA public authority develop, implement, document and maintain policies, procedures, systems and internal controls which will assist the Chief Executive to discharge his or her financial management accountability. Treasurer s Instruction 2 Financial Management identifies the following areas of an internal control environment: Risk management Resource management Income management Expenditure management Asset and liability management Other areas include (but are not limited to): Governance matters Contract management Economy and efficiency of resources Information and communication system management Management of reporting arrangements Examples of financial management matters to be considered within these areas include (but are not limited to): Governance matters The Chief Executive should ensure that each board/committee has a code and/or charter. Each board/committee should undertake a regular review of it s performance in relation to meeting its code and/or charter and report the results of that review to the Chief Executive/ Board or Governing Body. The Chief Executive should ensure that personnel appointed 1 have the appropriate skills and knowledge to perform tasks required and that competence and training needs of personnel are identified and addressed to enable personnel to fulfil their compliance and performance obligations. The Chief Executive should ensure competence and training needs of personnel are identified and addressed to enable personnel to fulfil their compliance and performance obligations. 1 Note, pursuant to TI 7, the Treasurer may appoint a representative to attend Board meetings of a designated public corporation. TI 7 also prescribes the role and responsibilities of the Chair in relation to this representative. Reissue date: September

14 Contract management The Chief Executive should establish, document and maintain a contract register which will include details of all contracts that result in income to or expenditure by the public authority or that relate to any dealings with an asset or liability (other than in relation to employees) controlled or administered by the public authority. The Chief Executive should establish and document service level agreements for services rendered to or services to be received from all SA public authorities. Economy and efficiency of resources The Chief Executive should only incur expenditure when it is within the authorised budget (as maintained by the Department of Treasury and Finance) and for authorised purposes. The Chief Executive should manage the: - expenditure lifecycle to ensure that all expenditure incurred represents value for money and is for purposes that are consistent with the public authority s objectives. - asset lifecycle to ensure that all tangible and intangible assets are put to optimal use for purposes consistent with the public authority s objectives. - the liability lifecycle to ensure that all liabilities incurred and balances used are for purposes consistent with the public authority s objectives and that all undisputed liabilities are satisfied when due and payable. Information and communication system management The Chief Executive should develop, document and maintain policies and procedures relating to the management of information and communication technology, covering the following areas: - physical and logical security; - project management and system development, e.g. business case requirements; resource planning; programming and testing requirements; sign offs; - change management; - standard methodologies; - backup, disaster and other recovery and contingency planning; - delivery and support; and - security controls, integrity controls, project controls such as approvals, authorisations, verifications, control totals, segregation of duties etc. The Chief Executive should ensure that a register of licences is established, documented, maintained and reviewed on a regular basis. Reissue date: September

15 The Chief Executive should develop performance measures to provide assurance that business, information and communication systems are effective and delivering benefits to the public authority and/or community. The Chief Executive should establish and implement appropriate security over the information process/data flows by appropriate user controls, e.g. regularly review error logs and monitor access to and transactions processed through financial management systems. Management of reporting arrangements The Chief Executive should ensure that the content, format and timing of reporting are consistent with regulatory requirements. For example, annual reports should comply with the requirements outlined in the Department of the Premier and Cabinet Circular 013 Annual Reporting Requirements; general purpose financial statements should be consistent with the Model Financial Statements issued by the Department of Treasury and Finance. The Chief Executive should ensure that internal reporting arrangements: - set out appropriate reporting criteria and obligations; - establish timelines for regular reporting; - include exception reporting and/or ad-hoc reporting of emerging issues; - have systems and processes in place to ensure accuracy and completeness of information; - present reports in a style that is easy to understand and use, and can provide non-financial information where relevant; and - provide relevant, accurate and complete information to the correct user(s) to enable the appropriate information to be conveyed, actions to be taken or decisions to be made. The Chief Executive should ensure materiality assessments are undertaken that consider what the information is to be used for; which information is significant; and the extent to which amounts reported need to be free from error. The Chief Executive should ensure reporting of information is cost effective in its acquisition, preparation and dissemination. Reissue date: September

16 FINANCIAL MANAGEMENT COMPLIANCE PROGRAM Treasurer s Instruction 28 Financial Management Compliance Program mandates that each Chief Executive must develop, implement, document and maintain a robust and transparent financial management compliance program. A public authority s financial management compliance program will include the monitoring and review of the internal control environment including ethical values and performance targets and indicators. Treasurer s Instruction 28 Financial Management Compliance Program identifies the following areas as a part of the financial management compliance program: compliance with applicable financial management legislation; sub-ordinate legislation and other mandatory requirements of the State. assessment of policies, procedures, systems and internal controls for income, expense, asset, liability, budgetary and reporting activities. Compliance with applicable financial management legislation, sub-ordinate legislation and other mandatory requirements of the State. An effective financial management compliance program will include an assessment of the public authorities compliance with financial management, financial administration and financial reporting matters contained within: Relevant legislation Public Finance and Audit Act 1987, Appropriation Act (annual act), Public Sector Act 2009, State Procurement Act 2004, Public Corporations Act 1993, South Australian Government Financing Authority Act, Statutory Authorities enabling legislation, and Commonwealth and State Taxation Legislation. Sub-ordinate legislation Treasurer s instructions (including accounting policy statements), Commissioner for Public Sector Employment s Standards and Code of Ethics for the SA Public Sector, and State Procurement Board Policies. Other financial management policies/requirements of the State Department of Treasury and Finance Circulars, Department of Premier and Cabinet Policies and Circulars, Leasing Guidelines, Cash Alignment Policy, Monthly Monitoring Requirements, Government endorsed contractual arrangements, Government endorsed Information System Management Framework including Information, Communication and Technology policies and standards, State Records requirements. The flowchart titled Framework for Financial Management Compliance on page 20 will assist SA public authorities in identifying applicable laws, regulations and other mandatory requirements. Reissue date: September

17 When meeting reporting obligations and strengthening internal control environments, the Chief Executive is required to comply with all of the requirements contained within the Treasurer s instructions, and accounting policy statements except where: the mandatory requirement is conditional and the condition is not present; or the Treasurer has approved a variation. When in rare and exceptional circumstances, factors outside a public authority s control prevent the public authority from complying with the requirements contained within the Treasurer s instructions and accounting policy statements, the Chief Executive will advise the Under Treasurer of: the requirement not complied with; the circumstances surrounding the inability to comply; the reasons for the inability to comply; and if possible, what compensating control/alternative procedure will be performed by the public authority. Other areas to be considered as part of the financial management compliance program Apart from an assessment of policies, procedures, systems and internal controls for income, expense, asset, liability, budgetary and reporting activities, other areas to be considered as part of the financial management compliance program include (but are not limited to): governance matters information and communication systems monitoring and reporting arrangements Examples of financial management compliance matters to be considered within these areas include (but are not limited to): Governance matters The Chief Executive is responsible for fostering an appropriate compliance culture that is consistent with the public authority s values, strategies, governance, and ethics. The Chief Executive should nominate a senior officer with authority and responsibility for the overall design, consistency and integrity of the financial management compliance program. The Chief Executive should ensure that the public authority s commitment to financial management compliance is ongoing. Reissue date: September

18 Information and communication systems The Chief Executive should ensure that strategic and business planning activities provide clear direction and guidance for information and communication technology (including the alignment/integration with other information and communication systems within the public authority and the SA public sector) and its future development. Information and communication technology developments and solutions should align with the Government s broader e-government and information and communication technology policy initiatives. The Chief Executive should articulate roles and responsibilities of system owners and other key stakeholders. The Chief Executive should perform a regular assessment of: - benefits delivered from business, information and communication technology systems. This will include the review of performance measures, comparisons of expected benefits with actual benefits and, where appropriate, the development of action plans. - the effect of information and communication technology that supports financial management not being available for an extended period. This will include the review and testing of disaster recovery and business continuity plans. - information and communication technology risks and their impact on financial management including information security risks. Public authorities should comply with the Australian Standard HB Information Security Risk Management Guidelines. -. the adequacy of security and control over financial management information, including an assessment of security policies; password controls (applications and operating platforms); segregation of incompatible duties and user access levels; and physical access to sensitive financial management information and communication technology assets. Monitoring and reporting arrangements The Chief Executive should implement appropriate systems to ensure he or she is informed on all relevant financial management compliance and governance matters. The Chief Executive should ensure that the compliance program and outcome/operational performance is regularly monitored and reviewed. Monitoring is the process of gathering data for the purpose of: - identifying and resolving problems; - ensuring that compliance obligations are met; - reviewing the integrity and effectiveness of the compliance program; - tracking progress on meeting policy commitments, objectives and targets; and Reissue date: September

19 - evaluating the effectiveness of internal and operational controls. Monitoring involves reviewing internal and external environments, monitoring performance against targets, challenging assumptions, reassessing information needs and systems, establishing follow-up procedures and assessing the effectiveness of controls. The Chief Executive should ensure the reporting of compliance matters is incorporated into standard operational reports. Separate reports should be prepared for major breaches and for urgent emerging issues. Note that Treasurer s Instruction 2 Financial Management requires Chief Executives to advise the Under Treasurer of a breach of any Treasurer s Instructions within 30 days that they become aware of that respective breach. The checklist titled Financial Management Compliance Checklist on pages 53 to 76 provides SA public authorities with guidance in assessing their compliance program/internal control environment. Reissue date: September

20 Reissue date: September

21 1. Public Sector Act This Act provides for the establishment of administrative units; the State s public service and its management eg all persons employed by or on behalf of the Crown must be employed under this Act; employees must act honestly; covers Chief Executive and other Executive appointment and responsibilities. The Act also provides for the functions of the Commissioner for Public Sector Employment such as developing and issuing directions and guidelines relating to personnel management matters. 2. Appropriation Act (annual act) - This Act provides for the appropriation of money from the Consolidated Account for each financial year. The schedule details the amounts proposed to be expended from the Consolidated Account during that financial year. 3. Public Corporations Act 1993 This Act provides for the control of public corporations. It covers management matters such as the performance and scope of operations; duties and liabilities of boards and directors; and financial provisions such as the payment of dividends. 4. Public Finance and Audit Act 1987 This Act regulates public finances; it establishes the Consolidated Account and deals with the receipt and application of public monies; public authorities ability to borrow; the Governor s Appropriation Fund. It provides for the audit of public authorities financial statements and for the Auditor-General to examine the degree of efficiency and economy with which public resources are used. Provides for the Treasurer to issue instructions. 5. State Procurement Act 2004 This Act establishes the State Procurement Board and regulates the procurement operations of public authorities. 6. Commonwealth Tax Legislation These Acts provide for the administration of FBT, GST and PAYG taxation and other related matters. 7. Australian Standards Standards Australia is an independent company (limited by guarantee), which prepares and publishes most of the voluntary technical and commercial standards used in Australia. Through a Memorandum of Understanding with the Commonwealth Government, Standards Australia is recognised as Australia s peak national standards body. These standards are developed through an open process of consultation and consensus, in which all interested parties are invited to participate. Reissue date: September

22 FINANCIAL MANAGEMENT REPORTING The ability to produce reports that assist with the planning, execution and monitoring of a public authority s performance is critical to the effectiveness of financial management. The Chief Executive of a public authority is accountable for meeting reporting obligations and strengthening internal control environments with an effective compliance program. Reporting for whole of Government purposes In some cases, public authorities form part of a Portfolio, which collates and summarises portfolio information for reporting to the Minister and identifies and assists with portfolio-wide compliance issues. The Department of Treasury and Finance: provides consolidated (whole of government) reporting to the Treasurer; provides guidance and assistance to public authorities and portfolios via whole of government training/information sessions and information systems; and manages the framework for public sector financial management. The flowchart titled Framework for Financial Management Reporting on page 24 presents the information and communication flow between public authorities, portfolios and the Department of Treasury and Finance for whole of government reporting purposes. Regulatory financial reporting Public authorities discharge accountability through regulatory financial reporting to various stakeholders. To enable Parliament to effectively hold the Government accountable for its performance in the use of resources and management of assets, clarity on the boundaries of the Government reporting entity is essential. Accountability can only be effective with the provision of complete and appropriate information. In large part, public authorities use their annual report to discharge accountability requirements to Parliament. The annual report includes the general purpose financial statements and non-financial information on operational activities. The Financial Reporting Checklist on pages 75 to 93 will assist public authorities with the preparation of their general purpose financial statements. At the end of each financial year, it is the Chief Executive s responsibility to perform an assessment of the effectiveness of the internal control environment and procedures over financial reporting. The Financial Management Compliance Checklist on pages 51 to 74 will assist public authorities in performing this assessment. Reissue date September

23 Evaluating the effectiveness of internal controls over regulatory financial reporting In addition to the Financial Management Compliance Checklist, the following points may be of assistance in assessing the effectiveness of the internal control environment over regulatory financial reporting: for each of the significant accounts and disclosures, identify risks of misstatement with reference to existence or occurrence; completeness; valuation or allocation; rights and obligations; presentation and disclosure. based on the risks identified, and with reference to accounting policies, procedures and processes, identify the key controls that reduce either the likelihood or impact of the risk occurring. consider whether internal controls identified are designed such that they provide reasonable assurance that material misstatements would be prevented or detected by management throughout the year. where deficiencies in the design of internal controls have been identified, develop and implement appropriate remedial action plans, and report details to the Audit Committee and/or the Chief Executive/Board or Governing Body. give attention to complex and or unusual transactions such as measurement and reporting of financial instruments, machinery of Government changes. The Administrative Restructure Checklists (from page 96) may assist public authorities with machinery of Government changes. The following points may also be of assistance in assessing systems: test the effectiveness of key control activities, ie that they were operating as intended throughout the course of the year and not just at a point in time. This may involve: - directly testing a sample of significant control activities; - risk and control self assessments by management and staff; and - management and staff representation. review the evaluation to determine whether deficiencies either individually or in aggregate represent material weakness. Where deficiencies are identified, develop and implement appropriate remedial action plans. prepare and provide representation to the Chief Executive/Board or Governing Body regarding any material control weaknesses identified. Reissue date: September

24 Reissue date: September

25 GUIDANCE: TI 5 DEBT RECOVERY AND WRITE OFFS Introduction and Disclaimer This document is intended to provide guidance as to the interpretation of the obligations imposed in Treasurer s Instruction 5 Debt Recovery and Write Offs. The document is not a substitute for specialised advice, i.e. from the Department of Treasury and Finance or legal advice from the Crown Solicitor s Office. Q1 Is my agency bound by TI 5? A1. If your agency is a public authority as defined in sec 4 of the Public Finance and Audit Act 1987 (PFAA), then yes, it is obliged to comply with T I5 (and other Treasurer s Instructions). Treasurer s instructions are issued pursuant to section 41 of the PFAA and apply to all public authorities. A public authority is defined in section 4 of the PFAA to mean (a) (b) (c) a government department; a Minister; a statutory authority (i) (ii) that is an instrumentality of the Crown; or the accounts of which the Auditor-General is required by law to audit; (d) such other body or person as is prescribed, but, subject to any other provision of the Public Finance and Audit Act 1987, does not include a statutory authority where the Act by or under which the authority is appointed or established provides for the auditing of the accounts of the authority by a person other than the Auditor-General. Note: TI 1 provides an exemption for the University of Adelaide; Flinders University of South Australia; and the University of South Australia to comply with TI 5. Q2 What is a debt for the purposes of TI 5? A2. A debt, for the purposes of TI 5, in general terms, is an obligation to pay. TI 5 defines a debt quite broadly to mean a sum of money owed by a person or an entity to a public authority. It includes an obligation due to the authority and/or the right to receive and enforce payment (e.g. a loan receivable, claim, salary overpayment, loss, theft and deficiency of public assets, money owed for goods sold or services provided). For the purposes of this instruction, debt excludes sums of money owed by entities within the same reporting entity. Reissue date: September

26 For example: A Minister is entitled to a payment from a party arising under an agreement/contract. This includes a situation where a party has not fulfilled its contractual obligations; and the failure to meet certain conditions/obligations entitles the South Australian Government to recover certain amounts previously paid. Note: In the scenario above, where the parties then negotiate a Deed of Settlement in which, they agree the amount of repayment to be less than what the South Australian Government is owed under the original agreement/contract, then the reduced value of the debt being agreed under the Deed of Settlement would be subject to TI 5. Q3. Is it possible for there to be a debt, for the purposes of TI 5, even when it is not recognised/recorded in the public authority s accounts (financial statements/general ledger/debtors ledger)? A3. Yes. As indicated, TI 5 defines a debt quite broadly. A debt is a chose in action it is a right which a creditor has to enforce by taking action in a court of law against the person who owes the money. If a chose in action exists, there is a debt irrespective of whether the debt has been recorded in the accounts. For example: An overpayment of wages has occurred due to an administrative processing error by an outsourced service provider. The outsourced service provider discusses the situation with the public authority concerned and an agreement is reached not to reflect the overpaid salary in the accounts. Even though the debt is not recorded in the accounts of the agency, the overpayment of wages (i.e. debt) would still be subject to TI 5. Q4. TI 5 says a debt is not be written off where the debtor is a South Australian Government employee: who is a South Australian Government (public sector) employee for the purposes of clause 5.15 of TI 5? A4. A current South Australian Government (public sector) employee is one employed in and/or receiving income from the South Australian public sector. TI 5 stipulates that debts are not to be written off where the debtor is a current South Australian Government (public sector) employee and that current employees are to be pursued for prompt repayment. The exception to this rule is where the amount does not exceed $20, then the Chief Executive or agency head may at his or her discretion waive the amount. An employee is a person who is subject to a contract of service between them and an employing authority on behalf of the Crown. This includes employees who are absent from duty on leave of any kind. It clearly does not include persons who are deceased or whose employment has otherwise been terminated, for any reason. It is important to note that despite a person no longer being an employee, there is still an obligation on public authorities to seek to recover debts owed by the person. This includes attempted recovery from the estates of deceased persons. The fact that it is possible to write off a debt owed by former employees does not mean the obligation to seek recovery is diminished. Writing off of debts may only occur pursuant to TI 5 (see Q6). Reissue date: September

27 Q5. TI 5 says a Chief Executive may exercise discretion to waive an amount not exceeding $20 owed by a current South Australian Government (public sector) employee is the $20 an annual maximum amount? A5. No, the $20 means a total amount. For example: During the current year, a payroll processing error was identified. The error had re-occurred in each of the four preceding years. This has resulted in a salary overpayment of $12 in each year, with a total salary overpayment of $48. The question becomes can TI 5 be interpreted such that a chief executive or agency head or delegate can exercise discretion to waive the total amount of $48 because each year the amount overpaid was less than $20 and the Chief Executive could have exercised discretion in each year, if he or she was aware of the overpayment? The provisions of TI 5 clause are clear and refer to a total amount. In this case, the total amount ($48) exceeds the $20 threshold in clause and accordingly the debtor, being a current South Australian Government (public sector) employee would be pursued for prompt repayment. Q6. The Chief Executive or agency head or a delegate in my agency wants to write off a debt. What is the process? A6. A debt may be written off only once a public authority s debt recovery policies and procedures have been followed and the approvals in TI 5 obtained. Where a Chief Executive or nominated employee s approval is required, public authorities are to follow internal policies and procedures. Where the Treasurer s approval is required: either the public authority s Minister may write to the Treasurer directly or alternatively the public authority s Chief Executive may write to the Under Treasurer, requesting a submission be forwarded to the Treasurer on his/her behalf. the correspondence to Treasury should clearly articulate: - whether the public authority s debt recovery policies and procedures have been followed or not. If they have not been followed, why not; - whether the Crown Solicitor s Office has provided advice. Where the Crown Solicitor s Office has provided advice, this should be attached; - the name of the debtor; the amount of the debt; background to the creation of the debt (including date); steps/processes undertaken by the public authority to recover the debt; and why it is asserted it cannot be or should not be recovered*; - where the debtor is a current South Australian Government employee, the debt relates to salary overpayment, and the public authority is subject to Determination 6 - why a public authority cannot recover the debt via unilateral deductions from an employee s salary (ie reliance upon section 70 Reissue date: September

28 of the PS Act). e.g. why an agency has not commenced recovery within 6 years of the debt being created; and - what changes/amendments, if any, will be made to the public authority s policies and procedures and/or contractual arrangements. * for example, whilst there is a prima facie obligation to repay debts arising from an overpayment, the obligation may be displaced in certain specific circumstances e.g. detrimental reliance on the amounts received in good faith. If any debtor asserts they have no obligation to repay based on this legal principle, advice should be sought from the Crown Solicitor s Office as the principle is extremely hard to demonstrate/make out. Q7 to Q11 relate in part to the interaction between the Commissioner for Public Sector Employment s Determination 6 Recovery of Overpayment and TI 5 Debt Recovery and Write Offs. Specifically in relation to the following statement which appears on page 5 of the Determination: The Commissioner for Public Sector Employment determines that where an agency relies upon section 70 of the PS Act to recover a debt owed by an employee created by an overpayment, the agency may only commence recovery of the debt within six (6) years of the debt being created. The above statement first appeared in the Determination that was reissued on 1 October Q7 Is my agency bound by the Determination of the Commissioner for Public Sector No. 6? Determination 6 applies to employees and public sector agencies covered by Part 7 of the Public Sector Act 2009 (PS Act). In the context of a public authority for the purposes of the PFAA - this largely includes: all administrative units (departments and attached office); certain statutory authorities where the Statute Amendments Act changed the employing authority to a Chief Executive of an administrative unit; and certain other identified/declared statutory authorities such as: the Courts Administration Authority; Urban Renewal Authority; Lifetime Support Authority; Education and Early Childhood Services Registration and Standards Board; and the Legal Professional Conduct Commissioner. Where your agency is not bound by Determination 6, the Office for the Public Sector. is encouraging agencies to adopt Determination 6 as policy. If there is any doubt as to whether or not your agency must or should follow the Determination, contact the Office for the Public Sector or the Crown Solicitor s Office. Reissue date: September

29 Q8. Does the abovementioned Determination/statement by the Commissioner for Public Sector Employment override an instruction issued by the Treasurer? A8. No. TI 5 requires that where a debtor is a current South Australian Government (public sector) employee, the employee is to be pursued for prompt repayment. (Note, this requirement is subject to a situation where the total debt is $20 or less and the Chief Executive has exercised discretion to waive the debt.) Repayment or recovery may be: via entering into a written agreement with the employee to repay the debt in one lump sum or via weekly/fortnightly/monthly deductions or from leave payouts etc; or via unilateral deductions from an employee s salary pursuant to section 70 of the PS Act. Public authorities will rely upon section 70, largely where agreement with an employee for repayment of the debt is not reached; or via action in the civil jurisdiction of a common law court or under the Fair Work Act in the South Australian Industrial Relations Court. The Determination/statement made by the Commissioner for Public Sector Employment is limited to reliance upon section 70 of the PS Act (i.e. the second dot point). Q 9. Does the abovementioned Determination/statement only apply to debts created and/or discovered post 1 October 2014 i.e. the date Determination 6 was issued? A9 No. Determination 6 (re-issued on 1 October 2014) affects only the time period within which the debt can be recovered pursuant to section 70 of the PS Act. Accordingly: if a debt was created prior to 1 October 14, and recovery action had not commenced for a period of more than 6 years - the agency could not seek (after 1 Oct 14) to rely upon sec 70 of the PS Act to recover the debt (or to otherwise seek to recover it); or if a debt was created and identified/discovered prior to 1 October 14, and recovery action had not commenced for a period of more than 6 years - the agency could not seek (after 1 Oct 14) to rely upon sec 70 of the PS Act to recover the debt (or otherwise seek to recover it i.e. via action in a common law Court or the South Australian Industrial Relations Court). Reissue date: September

30 Q10. Does the abovementioned Determination/statement mean that, from 1 October 2014, my agency is no longer required to pursue employees for salary overpayments where the debt is greater than 6 years old? A10. Not necessarily. It depends on the specific facts and circumstances. An agency will not be able to take action to seek to recover a debt created by an overpayment (i.e. civil action in a common law court or under the Fair Work Act) or otherwise recover the debt (i.e. unilaterally by reliance on section 70 of the PS Act) unless action has commenced to recover said debt within six years of the debt arising. The concept of commencing action to recover a debt should be given its ordinary and natural meaning. To commence means to begin; to take the first steps in a process or course of action; to set in motion; to cause a start. The first step in a recovery process will almost always be notification to the employee/debtor of the debt. Example 1: A debt was created on 28 Feb On 26 November 2014 (5 years and 9 months later), the public authority notified the employee of the debt created by the overpayment and proposed an agreed repayment plan. This notification would constitute the first step in the recovery process, for the purposes of Determination 6. Accordingly the public authority has met the requirements in Determination 6 and can rely upon section 70 of the PS Act to recover the debt owed. (Note the use of section 70 assumes an agreement for repayment of the debt was not reached.) In addition, as required by TI 5, as the debtor is a current South Australian Government employee, the debt would not be written off but rather the employee would be pursued for prompt repayment. Note: the debt may be waived, where the total debt is $20 or less and the Chief Executive has exercised her/her discretion. Example 2: A debt was created on 28 Feb On 26 November 2014 (5 years and 9 months later), the public authority notified the employee of the debt created by the overpayment. The public authority and the agency did not reach agreement about the repayment of the debt until 28 April 2015 (6 years and 2 months later). The notification would constitute the first step in the recovery process, and accordingly the public authority can rely upon section 70 of the PS Act to make unilateral deductions from the employee s salary even though the deductions commenced more than 6 years since the debt was created. (Note the reliance on section 70 of the PS Act assumes the agreed repayment plan did not continue and/or further agreement could not be reached). In addition, as required by TI 5, as the debtor is a current South Australian Government employee the debt would not be written off but rather the employee would be pursued for prompt repayment. Note: the debt may be waived, where the total debt is $20 or less and the Chief Executive has exercised her/her discretion. Example 3: On 26 November 2014, a reconciliation of payroll data identified a previously unknown payroll processing error in Based on known information, it was determined that the debt was created on 28 Feb 2004 (10 years and 10 months earlier). As the processing error was unknown until Nov 14, the public authority did not at any time notify the employee of the debt. Reissue date: September

31 In accordance with Determination 6, the public authority cannot rely upon section 70 of the PS Act to make unilateral deductions from the current employee s salary as the public authority had not commenced recovery within six years of the debt being created. The public authority is otherwise prohibited from seeking to recover the debt pursuant to the Limitations of Actions Act and/or Fair Work Act. Where the public authority is an administrative unit, the Treasurer s approval is required to write off the debt. Where the public authority is a statutory authority or public corporation, the Board, Governing Body or Treasurer s approval is required. Q 11 What if action towards recovery had commenced within six years of the debt s creation but the debt remains outstanding? A11. There remains a prima facie obligation on the public authority to seek to recover the debt and on the employee or ex-employee to repay it. Example: A debt created by an overpayment was identified and action commenced towards recovery within six years of the creation of the debt. An employee/former employee had entered an agreement with a public authority authorising periodic automatic deductions from a financial institution but had caused the deductions to cease after paying only a proportion of the debt. The public authority remains obliged to seek to recover the debt. In the case of a current South Australian Government (public sector) employee, this would be by attempting to reaching a new agreement with them or utilising section 70 of the PS Act as necessary. In the case of a former employee, by attempting to reach a new agreement with them or commencing proceedings in a common law court or in the South Australian Industrial Relations Court. Q 12 What about overpayments that are discovered when a person is no longer a South Australian (public sector) employee? A12. Where a debt created by an overpayment at a time when the debtor is no longer an employee in the South Australian Government (public sector), public authorities should actively attempt to recover the debt, including by action in the civil jurisdiction of a common law court or under the Fair Work Act as appropriate. As indicated, whilst write off of a debt owed by a former employee is possible, this can only occur in the circumstances provided in TI 5 (see Q6) and any view that the obligation to seek to recover the debt is diminished is wrong. Reissue date: September

32 GUIDANCE - TI 11 PAYMENT OF CREDITORS ACCOUNTS Treasurer s Instruction 11 Payment of Creditors Accounts, requires (amongst other things): public authorities to report account payment performance to DTF. This information will be published on DTF s website. DTF is often asked What types of payments should be included in these reports? The guidance below may assist public authorities with identifying payments that should or shouldn t be included in these reports*. Subject to clause and public authorities must not make payments in advance for goods that have not been received or for services not yet rendered. One of the exceptions is that payments are made in the ordinary course of business DTF is often asked What does the term in the ordinary course of business mean? The guidance below may assist public authorities in determining whether a payment is being made in the ordinary course of business. *In May 2015, the Treasurer approved amendments to TI 11 which removed the requirement for agencies to report monthly account payment information to their Minister/Governing Body. It is important to note that the withdrawal of this requirement does not alter the fact that agencies are required to pay undisputed accounts promptly; and must ensure they have policies, procedures, systems and internal controls in place relating to the payment of creditors accounts. This may include for example regular internal reporting on account payment performance. What types of payments should be included in the account payment performance reports to DTF? Not all payments are payments to creditors. The following lists may assist public authorities with identifying which payments are payments to creditors and included in the account payment performance report and which are not. Examples of items included: Accommodation / Rental fees Auditor fees Communication costs Contractors expenses Information technology expenses Insurance renewals Lease expenses Marketing and promotional costs Motor vehicles expenses Professional fees for accounting advice, legal advice, tax advice etc Repairs and maintenance / Building service costs Travel expenses Utilities expenses Examples of items not included: Payroll / Salaries and wages Payroll deductions eg superannuation payments, health benefit payments Reissue date September

33 Salary sacrifice payments PAYG payments Payroll tax payments Workcover payments BAS payments Appropriation transfers between public authorities Grant payments between public authorities Other payments which are internal payments within the public authority What is in the ordinary course of business? In broad terms, in the ordinary course of business means the usual transactions, manner, customs and practises of business/industry in selling goods and/or services of that kind. The following points may assist in considering whether the ordinary course of business test has been met: supplier s commercial customs and practices are similar, though not necessarily identical, to others in the industry. supplier s commercial transactions, terms and practices are similar, though not necessarily identical, for all customers (government, non-government organisations and general public). In addition, consider the following questions: What is the industry s commercial customs and practices? Consider commercial customs and practises of other businesses selling goods/services of that kind. e.g. if you are looking to engage a specific presenter or facilitator that demands full payment before he or she presents or facilitates consider terms of other presenters. If it was your personal/household expenditure, would you pay for it in advance? e.g. would you pay a lawyer for legal advice prior to the advice being given; an electrician for electrical works prior to the service being performed. Examples of payments for goods not received and services not yet rendered that are considered to be in the ordinary course of business include: Insurance Membership Motor vehicle registration fees Subscriptions Telephone rental Utility rates Warranties Annual Software licences Fees to attend a professional development and/or training course such as sessions run by IPAA, CPA Flights % payment to ETSA and Telstra for service head works ie augmentations, substation upgrades, fibre connections etc Reissue date: September

34 It is the usual transaction, manner, custom and practise within the respective industry to pay for these goods/services in advance. The treatment is consistent for government, non-government entities and the general public. Examples of payments for goods not received and services not rendered that are not considered to be in the ordinary course of business. Services provided by consultants/contractors Non-current asset purchases Inventory purchases Fit-outs Facilitators, catering, venue hire etc Communication costs Marketing, advertising and promotional expenditure Maintenance services Cleaning services Note: In relation to rental and lease contracts - some rental/lease contracts require the lease/rent to be paid in arrears and others require one month s rent in advance where the contract requires one month in advance, for the purposes of TI 11, this is considered to be within the ordinary course of business. If the contract required for example, a year s rent/lease payment in advance this would not normally be in the ordinary course of business. It is the usual transaction, manner, custom and practise within the respective industry to pay when these goods are received or these services are rendered. This treatment is consistent for government, non-government entities and the general public. Note TI 11 clause and also provides for: The Under Treasurer or Under Treasurer s delegate to deem a payment as being in the ordinary course of business. The Treasurer can provide express approval for the payment in advance to be made. The Chief Executive, where he or she considers it to be in the best interest of the SA Government to make a payment in advance for goods that have not been received or for services not yet rendered, where the payment does not exceed $25,000 (inclusive of GST). Reissue date: September

35 GUIDANCE - TI 13 EXPENDITURE INCURRED BY MINISTERS AND MINISTERIAL STAFF What does intrastate mean for the purposes of TI 13? TI 13 clause 13.9 provides for ministerial officers employed as Chiefs of Staff, Ministerial Advisers, Policy Advisers and/or Media Advisers to be issued with a purchase card only when they are accompanying Ministers on intrastate, interstate and/or overseas travel. The purchase card must be surrendered immediately upon return to Adelaide. In broad terms, intrastate means Regional SA and includes all towns that are 100kms or more from the Adelaide GPO. Reissue date: September

36 GUIDANCE TI 15 GRANT FUNDING 1 Decision Tree Is the grant 2 more or less than $10,000 (excl GST)? Less (or equal) More Is the grant non-recourse 3? Is the grant non-recourse 3? No Yes No Yes No Is the grant one-off? Yes TI 8 approvals apply 4. Documentation requirements in para Application of para TI 8 approvals apply 4. Documentation requirements in para apply. The Treasurer s approval required para Application of para TI 8 approvals apply 4. Documentation requirements in para apply. TI 8 approvals apply 4. Documentation requirements in para 15.9 apply. 1. Applies to administrative units where grants are provided to non-sa government entities. Does not apply where administrative units are acting as an agent or administrator of funding provided by the Commonwealth government or to the procurement of goods and services. 2. A grant is defined as money given by an administrative unit, including subsidiaries, to an entity in order to fund or to assist with the funding of any program or project. A grant does not include the procurement of goods and services that meet the definition of procurement operations as defined in the State Procurement Act A non-recourse grant is defined as a grant for a specified purpose, and with specified objectives that may or may not have a series of conditions attached. Failure to meet any or all of the conditions does not entitle the Government to recover the grant. 4. Approvals and authorisations required for SA government employees to enter into contracts/incur expenditure, as set out in Treasurer s Instruction 8 Financial Authorisations apply. 5. Chief Executives need to be satisfied that any non-recourse grants are justified by the particular circumstances and are in the public interest. Reissue date September

37 GUIDANCE - TI 25 TAXATION POLICIES The taxation policies outlined in TI 25 Taxation Policies are intended primarily to ensure full compliance and consistent application of Commonwealth and State Taxation Legislation by public authorities. The following guidance is provided to assist with the interpretation and application of those taxation policies. TAX EXEMPT BODY ENTERTAINMENT In relation to TI 25 Taxation Policies clause , the following guidance is provided. Generally, a tax exempt body entertainment benefit arises where an employer, who is wholly exempt from Australian income tax, provides entertainment (meal, recreation etc) to an employee or an associate of an employee. The provision of entertainment within/by the SA Government mainly takes the form of lunches, meetings, seminars, conferences, Christmas parties etc. A distinction needs to be made between meal entertainment and other forms of entertainment to ensure that the correct FBT treatment is applied. Meal entertainment The provision of meal entertainment by an employer to a recipient (an employee, an associate of an employee or another person not being an employee or an associate) is the provision of: entertainment by way of food or drink; or accommodation or travel in connection with the provision of meal entertainment; or payment or re-imbursement of expenses incurred (in relation to the 2 points above). Meal entertainment is not a reportable fringe benefit, i.e. it is not included on employees payment summaries. Meal entertainment is exempt from FBT for a Public Benevolent Institution or a Public Hospital. Non-meal entertainment The provision of non-meal entertainment includes all entertainment except meal entertainment, eg recreation. Generally non-meal entertainment is a reportable fringe benefit, i.e. it is to be included on employees payment summaries. Subject to the cap, non-meal entertainment provided by a Public Benevolent Institution or a Public Hospital is an exempt benefit. Reissue date: September

38 When to record tax exempt body meal entertainment? Meal entertainment To determine when the provision of food or drink to a recipient results in entertainment, the employer should consider: Why the food or drink is being provided? This test is a purpose test. For example, food or drink provided for the purposes of refreshment does not generally have the character of entertainment, whereas food or drink provided in a social situation where the purpose for the function is for employees to enjoy themselves has the character of entertainment. What food and drink is being provided? As noted in the attached table, morning and afternoon tea and light meals are generally not considered to be entertainment. The more elaborate the meal the more likely the meal will take on the characteristic of entertainment. As a general rule if alcohol is provided, this constitutes entertainment. When is the food or drink being provided? Food or drink provided during work time, overtime or while an employee is travelling for work is less likely to have the characteristic of entertainment. However, it does depend upon the intention of the function. For example, a staff social function held during work time still has the characteristic of entertainment. Where is the food or drink being provided? Food or drink provided on the employer s business premises or at the usual place of work of the employee is less likely to have the characteristic of entertainment. However, food or drink provided in a function room, hotel, restaurant and café is more likely to have the characteristic of entertainment. Not one of the above questions will be determinative; however, the ATO has stated that the first two questions are considered to be more important. Given the broad nature of the circumstances in which entertainment may be provided, a reference table is attached to assist agencies to determine whether the food or drink provided is meal entertainment. What method to use to value tax exempt body entertainment? Meal entertainment The Actual method must be used for determining the taxable value of a tax exempt body entertainment fringe benefit to minimise the complex administration requirements and to ensure that the total FBT liability for SA Government will be met under the associate provisions. Under this method, the public authority will pay FBT on the proportion of meal entertainment that relates to any SA Government employee(s) and their associate(s). Where meal entertainment relates to a mixture of SA Government and non-government employees the expenditure should be apportioned between the number of government employees and non-government employees. Reissue date: September

39 Guidance papers on tax exempt body entertainment and determining whether an individual is a government employee or not are available separately on the FMT secure website. That is, the public authority that pays for the meal entertainment will pay the FBT. The advantages in using this method for determining the FBT liability is that: Administratively, it is easier to deal with. No need to advise the associate employer of meal entertainment provided to their employees. There is no risk of associate employers not including the advised amounts in their FBT return. Tax leakage is minimised. There are no reportable fringe benefit implications, as the identity of the employee is not required. Payroll tax is not paid on tax exempt body entertainment. Input tax credits can be claimed in respect of meal entertainment provided to employees of associate employers. Non-meal entertainment The Actual method must be used for determining the taxable value of a tax exempt body entertainment fringe benefit (this includes recreational entertainment fringe benefits) that relates to SA government employee(s) and their associate(s). In addition the public authority will, where required provide notification to the SA government employee(s) employer to enable the employer to pay the FBT and report the benefit on the employee(s) payment summary. Table 1 - Entertainment for Tax Exempt Bodies Circumstances In Which Food and Drink Provided Provided to Meal Entert. Sustena nce (a)(i) Consumed by employees on employer's business premises 1) at a social function Employee Yes No Yes Yes 2) in an in-house dining facility - not at a party, etc. Employee Yes/No No/Yes No Yes 3) in an in-house dining facility - at a party etc. Employee Yes No Yes Yes 4) morning and afternoon teas and light lunches Employee No Yes No Yes (a)(ii) Consumed by associates of employees on the employer's business premises 1) at a social function Assoc Yes No Yes Yes 2) in an in-house dining facility - not at a party, etc. Assoc Yes/No No/Yes Yes Yes 3) in an in-house dining facility - at a party, etc. Assoc Yes No Yes Yes 4) morning and afternoon teas and light lunches Assoc No Yes Yes Yes (a)(iii) Consumed by clients on the employer's business premises 1) at a social function Clients Yes No No No FBT ITC Reissue date: September

40 Circumstances In Which Food and Drink Provided Provided to Meal Entert. Sustena nce 2) in an in-house dining facility - not at a party, etc. Clients Yes/No No/Yes No No/Yes 3) in an in-house dining facility - at a party, etc. Clients Yes No No No 4) morning and afternoon teas and light lunches Clients No Yes No Yes (b) Food and drink consumed off the employer's premises 1) at a social function or business lunch Employees Client Assoc (c) Consumed by employees while travelling for work 1) employee travels and dines alone Employee No Yes No Yes 2) two or more travelling employees dine together Employees No Yes No Yes 3) travelling with client and dine together Employees No Yes No Yes 4) travelling with client and dine together and employer pays for all meals Employee Client 5) employee dines with client who is travelling separately Employee No Yes No Yes 6) employee dines with employee not travelling - travelling employee s meal provided - both employee s meals provided. travelling employee s meal. non-travelling employee s meal 7) employee dines with client who is not travelling - only employee s meal provided - employee s and client s meal provided (d) Employees dining with other employees of the same employer or with employees of associates of the employer 1) employee entertains another employee and is subsequently reimbursed by the employer 2) employee (A) entertains an employee (B) of an associated entity of the employer and is subsequently reimbursed (e) Meal consumed by employees while attending a seminar 1) provided incidental to a seminar that satisfies section and is not held on the employer's premises 2) light breakfast at a CPD seminar that does not satisfy section ) light refreshments including moderate amount of alcohol provided immediately after a CPD seminar that does not satisfy section (f) Consumed by employees at promotions 1) function not held on employer s premises and open to general public (g) Meals provided under an arrangement 1) employer does not facilitate or promote an arrangement where its employee is taken to lunch by another employer (h) Use of corporate credit card 1) employees dine together at a restaurant and the meal is paid for with the credit card (i) Restaurant discount cards 1) employee who holds a restaurant discount card entertains a client Employee Employee Employee Employee Employee Client Yes Yes Yes No No No No Yes No No Yes No No No Yes Yes Yes Yes No Yes Yes No FBT Yes No Yes No No No No Yes No No No ITC Yes No Yes Yes Yes Yes Yes Yes Yes Yes No Employees Yes No Yes Yes Employee A Employee B Employee Employee Yes Yes Yes No No No No Yes Yes Yes No No Yes Yes Yes Yes Employee No Yes No Yes Employee No Yes No Yes Employee Yes No Yes Yes Employee No No No No Employees Yes No Yes Yes Employee Client Yes Yes No No Yes No Yes No Reissue date: September

41 Circumstances In Which Food and Drink Provided Provided to Meal Entert. Sustena nce FBT ITC (j) Accompanying spouses 1) with employee travelling on business and employer pays for all meals Employee Spouse No Yes Yes No No Yes Yes Yes This table reflects the contents of ATO ruling TR 97/17 and subsequent addendum and should only be used as a guide for tax exempt body meal entertainment (i.e. actual method). Where the employer is a Public Benevolent Institution (PBI) or a public hospital, the entitlement to claim ITCs as outlined in the table above may differ. As set out in the table, where entertainment is provided by way of a fringe benefit, the provision in the GST legislation that specifically denies ITCs on acquisitions associated with the provision of entertainment does not apply. However, where the entertainment provided is an exempt benefit (eg PBI or public hospital), no ITC arises. Certain substantiation requirements exists for employees travelling in the course of their employment, regardless of whether the expenditure is a tax exempt body meal entertainment, and are set out in the decision tree. Reissue date: September

42 Yes Is the travel by the employee within Australia? No Was the travel undertaken exclusively in the course of performing employment duties? Is the employee away from his/her usual place of residence for more than 5 nights? Yes No Yes No Is the employee away from his/her usual place of residence for more than 5 nights? Yes Travel diary required Is any part of the expenditure in respect of accommodation? Yes No Declaration No Documentary evidence required (e.g. receipts) No Is the nature of compensation reasonable? Yes Declaration Separate rules apply for travelling allowances paid to employees. Reissue date: September

43 The following definitions are provided Entertainment means: entertainment by way of food, drink or recreation; or accommodation or travel to do with providing entertainment by way of food, drink or recreation. An employer may be taken to provide entertainment even if business discussions or transactions occur. Recreation includes amusement, sport or similar leisure-time pursuits. It can also include recreation or amusement provided on, or by means or, a vehicle, vessel or aircraft, which would include flights, sightseeing tours and cruises. Reissue date: September

44 PRIVATE TAXATION RULINGS To assist agencies with the interpretation and application of TI 25 Taxation Policies clause 25.9, the following guidance is provided. What is a Private Taxation Ruling? A private taxation ruling is a written expression of opinion by the Commissioner about the way in which a tax law or tax laws would apply to a person (the rulee) in relation to an arrangement in respect of a specified year of income. A person is not defined for the purposes of Part IVAA of the Taxation Assessment Act 1953 (TAA). Consequently, the meaning of the word in that Part is determined by reference to the Acts Interpretation Act 1901 (AIA). Section 22 of the AIA defines person to include a body politic or corporate as well as an individual, unless the contrary intention appears. A private tax ruling can apply to arrangements that are proposed, in course, or completed, as long as those arrangements began to be carried out after 30 June Further information can be obtained from TR 2006/11 Income tax fringe benefits tax and product grants and benefits: Private Rulings. Who may apply for a ruling? The private tax ruling provisions are contained within the TAA. Section 14ZAF of the TAA provides that a person may apply for a private ruling on the way in which a tax law applies to that person in respect of an arrangement. What is the process for applying for a ruling? Public authorities must forward applications (hard and soft copy) to the Department of Treasury and Finance for approval by the Under Treasurer or Under Treasurer s delegate prior to lodgement with the Australian Taxation Office. Private taxation ruling submissions may be made by the Chief Finance Officer to the Executive Director, Public Finance Branch. The submission will include information required by TI 25 Taxation Policies clause 25.10: a certification by the Chief Executive that all information contained in the ruling request and any attached documents are true and correct; certification by the Chief Executive that the appropriate taxation provisions of the relevant taxation law and interpretative decisions of the Commissioner of Taxation (eg rulings and determinations) have been considered; and the relevant taxation provisions and interpretative decisions have been referred to in the ruling request; a hard and soft copy of the ruling request and all attachments; details on whether the: - matter is currently the subject of an Australian Taxation Office audit or the public authority is engaged in a dispute with the Australian Taxation Office; Reissue date: September

45 - whether the public authority has previously received a ruling on the matter; and - whether the public authority is aware of a private taxation ruling issued to an entity on a matter similar to the ruling being sought.; and - that the correct taxation law has been applied to the matter. Why is the Under Treasurer s or Under Treasurer s delegate approval required? Requiring agencies to seek the Under Treasurer s approval will enable DTF to maintain a central repository of private FBT and GST tax rulings. This will: assist with considering the impacts on other agencies, as one agency s FBT private tax ruling may bind other SA agencies; and save agencies the unnecessary expense of requesting a private ruling where a ruling has already been obtained on a similar matter by another agency. Fringe Benefits Tax (FBT) For the purposes of the Fringe Benefits Tax Assessment Act 1986 (FBTAA), agencies are not a body politic in their own right. A government agency is a nominated state body under Part XIC of the FBTAA and is a component of the Crown that is a person. When a nominated body applies for a private FBT tax ruling using its Tax File Number (TFN) it does so in the capacity of a representative of the Crown. Goods and Services Tax (GST) The GST legislation applies to entities. The definition of an entity includes a body politic. For South Australia, the Crown is the body politic; therefore the GST legislation applies to all activities of the Crown. An entity can only register under the GST legislation if it is carrying on an enterprise. The GST legislation defines all activities of the South Australian public sector as an enterprise. Each entity can apply for GST private rulings. The provision of written advice by the ATO is covered by the procedures in Practice Statement Law Administration PS LA 2008/3. Can a GST private ruling issued to one Government agency apply equally to another Government agency? GST rulings are fact based. If a given set of facts apply to multiple entities then the application of the GST law to those facts will be the same for all the entities. Where the facts don't change and the only change is the entity's name, if a new private ruling was to be requested the ATO would provide the same response as given to the previous private ruling request. This is true for machinery of government changes (MoG) as well. If, as a result of a Government decision or MoG changes - functions were transferred from agency A to agency B; a gazettal notice also moved the staff associated from agency A to B; the functions undertaken remain unchanged; and agency A has received a private ruling from the ATO in relation to these particular functions, then although the previous Reissue date: September

46 private ruling applied to agency A and not to agency B, if the material facts remain unchanged when agency B takes over the functions, the ATO will be administratively bound to follow their original ruling. The effect is as if agency B had received the ruling itself. Reissue date: September

47 TI 25 GUIDANCE - Alternative Dispute Resolution Process TI 25 clause provides that a Chief Executive must inform the Department of Treasury and Finance of any disputes which may lead to litigation or other processes with the ATO. Reissue date: September

48 ABATEMENT GUIDANCE - TI 28 SA Public Private Partnership (PPP) ABATEMENT POLICY 1. Effective contract management is critical to ensuring that the State receives the level of service it has contracted for in a PPP, and therefore achieving value for money. 2. Agencies responsible for managing PPP contracts (Responsible Agencies) must have clear, well developed contract management policies and procedures in place. 3. An important role for Responsibility Agencies is to enforce the PPP Abatement Regime which underpins the agreed risk allocation, and is a key driver of Project Co performance. 4. To ensure that the Abatement Regime operates as intended, Responsible Agencies must actively monitor the delivery of the Services by Project Co against the requirements of the contract and Services Specification, and have clear and robust processes in place to assist and guide them in doing so. 5. It is therefore important that Responsible Agencies take appropriate steps to ensure that facility users (as well as contract administrators) are made familiar with those requirements, and that appropriate hand-over and knowledge management procedures are in place to deal with staff changes. 6. Responsible Agencies should pay particular attention to ensuring that Project Co complies with the detailed Performance Monitoring and Reporting requirements contained in the Services Specification. As PPP s rely heavily on Project Co self-reporting it is imperative that Responsible Agencies perform regular checks to satisfy themselves that they are receiving timely, accurate, reliable and complete performance data. This is critical to ensuring that the State receives the level and quality of service that it has contracted for. 7. To assist in this task, it is recommended that regular, random inspections of PPP facilities be undertaken and that Project Co is notified that these will occur as a matter of course. The results of these inspections can then be cross checked against Project Co Performance Reports. 8. Responsible Agencies should conduct (minimum) yearly formal Performance Monitoring Audits. Audit results should be tabled at the relevant inter-agency PPP steering committee meeting (if one exists), or otherwise be provided to DTF on an annual basis. 9. The Abatement Regime must be the primary mechanism used when responding to Project Co failures. 10. Where an abatable failure occurs the Responsible Agency must promptly abate in accordance with the PPP contract. A Responsible Agency must not delay the application of abatements. This includes in cases where an extracontractual arrangement (e.g. a negotiated agreement between the Responsible Agency and Project Co for abatements to be traded-off in return Reissue date: September

49 for other benefits such as additional scope) has been proposed by Project Co as an alternative to abatement. 11. Consistent with standard PPP contract terms, abatements must be applied at the first Quarterly Service Payment (QSP) invoice to be served after the abatable failure is identified. 12. The abatement should be for failures that occur within the relevant invoice period. Recovering historical abatements can pose legal difficulties. 13. Delaying the application of abatements in order to gain future negotiating leverage over Project Co is not permitted. 14. The value of the abatement must be quantified by the Responsible Agency in accordance with the Payment Mechanism and Services Specification. If the contract provides for the accumulation of abatement points, then the Responsible Agency must allow points to tally so that the default consequences are felt by Project Co. 15. If agency staff are uncertain about any aspect of the Abatement Regime, including its application to a particular fact situation, CSO advice should be sought and followed. It is not acceptable to ignore CSO advice on the interpretation of the contract. 16. Only in a minority of cases where exceptional circumstances exist should any form of extra-contractual arrangement such as trade-offs be considered. Where they are considered it must be strictly in accordance with this policy. 17. In cases where: (a) an abatement is applied; and (b) the value of the abatement has been withheld from the relevant invoice; and (c) Project Co disputes the abatement in accordance with the contract; and (d) an extra-contractual resolution of the dispute is subsequently proposed by Project Co (for example involving a trade-off of the abatement in return for other benefits such as additional scope); and (e) the Responsible Agency wishes to accept the extra-contractual arrangement; then: A meeting must be convened as soon as practicable between senior officers from the Responsible Agency, CSO and DTF (Senior Officers Group). The Responsible Agency would then need to put a strong case to the Senior Officers Group as to why it believes the extra-contractual arrangement is in the best interests of the State. Note that in relation to some PPP projects such a group may already exist in the form of an executive steering or project committee on which DTF and CSO are represented. In such cases it will not be necessary to convene a special purpose Senior Officers Group to deal with the proposal. Responsibility for deciding whether the extra-contractual arrangement is accepted by the State will rest with the Senior Officers Group (or equivalent), subject only to paragraph 23 below. Reissue date: September

50 18. Each of the steps in 17 (a), (b) and (c) above must be followed before the extra-contractual arrangement may be put to the Senior Officers Group. 19. Relevant considerations when assessing any proposal would include: The reasons advanced by Project Co for disputing the abatement; The State s assessment of the prospects of winning a dispute in light of those reasons. Note that the fact that CSO does not provide a guarantee of success is not on its own sufficient reason to accept an extra-contractual arrangement; The cost/benefit to the State including the impact of the extracontractual arrangement on the value for money premise on which the PPP was selected; The impact (actual and potential) of the defect on users of the facility and whether a negotiated solution might provide a more efficacious way of dealing with these impacts than strict application of the contract; The impact that any extra-contractual arrangement with Project Co will have on the respective rights and obligations of the parties, and incentive structures under the PPP contract; The length of time the matter has been known to each party whether there has been previous opportunities to resolve; Whether the consortium has abided by the terms of any previous extra-contractual arrangement such that the State can have confidence that any agreement would be honoured; Whether any previously agreed extra-contractual arrangement attempted to deal with the defect in question (i.e. no second chances should be granted); and General PPP policy considerations including ensuing compliance with the Infrastructure Australia National PPP Policy and Guidelines to which S.A. is a signatory. 20. Any extra-contractual arrangement must relate specifically to the disputed abatement and must not draw in unrelated abatements or failures. Accordingly, any such arrangement should be without prejudice to the State s ability to pursue unrelated abatements, or future abatements in respect of the same failures should they recur. 21. The possibility of incurring interest costs in the event that a disputed abatement is lost by the State is not a relevant factor in making a decision whether or not to accept an extra-contractual arrangement. 22. It is envisaged that approval for such arrangements will only be granted in exceptional circumstances, but the policy acknowledges that some limited flexibility needs to be retained. 23. If the Senior Officers Group (or equivalent) cannot agree on the proposal it should be referred to the Chief Executive of Treasury and Finance with appropriate advice. This advice should include the reasons why the Senior Reissue date: September

51 Officers Group was unable to reach consensus. The Chief Executive will then determine the proposal in consultation with CSO. In either case there must be a clear documented process that leads to the acceptance or rejection of the alternative proposal and sets out the State s reasons for arriving at a final position. These reasons should be tabled at the next Senior Officers Group meeting. 24. The final terms of any extra-contractual arrangement must be reviewed by the Senior Officers Group (or equivalent) prior to the Responsible Agency communicating the State s position to Project Co. 25. Care should be taken to ensure that those terms are clear and enforceable and minimise to the greatest extent possible the prospect of further argument or dispute about what was agreed between the parties. 26. Only when Project Co satisfies all conditions that have been imposed by the State as part of the extra-contractual arrangement should the Responsible Agency pay the withheld abatement. 27. In the ordinary course it will be the responsibility of either the Project Director or Contract Administrator to certify that all conditions imposed in relation to the trade-off have been met by Project Co to his or her reasonable satisfaction. The Senior Officers Group (or equivalent) should also be informed when this occurs. Note 28. This policy is based on general principles and is not intended to replace or override the specific requirements and provisions of each PPP Project Agreement as they relate to performance management, the operation of the Payment Mechanism and the Abatement Regime. These provisions, while broadly similar across PPP contracts, will necessarily differ on occasion to reflect the particular operational context and service delivery requirements of each project and Responsible Agencies should take time to familiarise themselves with them. For this reason the Contract Management Manual (operating phase) for each PPP must reflect the particular requirements of the PPP contract relating to the aforementioned matters, as well as the general requirements of this Abatement Policy. Reissue date: September

52 FINANCIAL MANAGEMENT COMPLIANCE CHECKLIST A compliance program/internal control system is not a stand-alone activity - it must be integrated into all aspects of how SA public sector authorities operate (e.g. into operational requirements; procedures; and information, financial, risk, tax and health and safety management systems). This checklist provides public sector entities with guidance in assessing their compliance program/internal control system. This checklist is simply one part of a continuous assurance framework. The checklist is structured in three parts and draws on the requirements of the Australian Standard AS Compliance Programs: Part 1: Financial management accountability Part 2: Financial accounting and budget Part 3: Financial management reporting The checklist is illustrative and not exhaustive. The contents of the checklist may need to be modified depending on the size, structure and nature of activities undertaken by public sector entities. For example, in a large public authority, certain parts of the checklist may be distributed to various branches/divisions/sections for completion whereas in a small public authority, the checklist may be completed by a single branch/division/section. Part 1: Financial management accountability (attributes: responsibility; commitment; resources; risks and information) 1 = Not effective 5 = Highly effective Details of items or responsibility to be Area/Person Assessment of Action Plan to attended to: responsible performance improve level of performance Responsibility 1.1 A compliance program exists, is overseen by senior management and is monitored regularly. Breaches are dealt with appropriately Y N NA Note the requirement within TI 2 for the Chief Executive to notify the Under Treasurer of any breach to Treasurer s Instructions within 30 days of them becoming aware of that breach. Reissue date: September

53 1.2 A charter and/or performance statement exists covering applicable legislation, Cabinet/ERBCC requirements, SA Government policies and other standards Y N NA 1.3 Compliance with the applicable legislation, Cabinet/ERBCC requirements, SA Government policies and other standards (refer to the Framework for Financial Management Compliance (page 20) is monitored and non-compliance is reported Y N NA 1.4 Executive/Governing Body responsible for the governance and oversight of financial management meets in accordance with its terms of reference Y N NA 1.5 A code and/or charter exist for each committee (for example Audit and Risk Management Committee) Y N NA 1.6 A regular review of each committee s performance in relation to meeting its code and/or charter is performed and the results of that review are forwarded to the Executive/Governing Body Y N NA 1.7 Internal policies and procedures on fraud and corruption control are established and reviewed at least annually.. Note, the Commissioner for Public Sector Employment will issue an all-purpose Public Sector Fraud and Corruption Policy (refer to TI 2) Y N NA Reissue date: September

54 Commitment 1.7 A compliance culture exists. The culture fostered by Executive/Governing body is consistent with the entity s values, strategies, governance and ethical and community standards Y N NA 1.9 A senior officer has been assigned responsibility for the financial management compliance program Y N NA Resources 1.10 Resources are appropriately allocated to achieve the entity s objectives Systems that allow timely communication of accurate internal and external information to relevant personnel exist and are maintained Y N NA Y N NA 1.12 Appointed personnel have the appropriate qualifications, skills and knowledge to perform tasks required Y N NA 1.13 Appointed personnel receive appropriate training to discharge their responsibilities effectively Y N NA 1.14 Personnel are aware of acceptable actions and behaviour Y N NA Reissue date: September

55 1.15 A system to monitor compliance with the Office of the Public Sector Code of Ethics for the South Australian Public Sector exists and action is taken, where necessary Y N NA Risk 1.16 Risk is managed by identifying, analysing, evaluating and treating material risks. Material risks are continually monitored and reviewed Y N NA 1.17 Risk management systems meet minimum requirements in Australian standard - AS/NZS ISO 31000: Y N NA 1.18 The entity has adequate insurance coverage Annual SAICORP insurance and risk management questionnaire is completed Y N NA Y N NA Information 1.20 Internal and external communication protocols are promulgated and followed Y N NA 1.21 Records are maintained that demonstrate compliance with applicable legislation, Cabinet/ERBCC requirements, SA Government policies and other standards - refer to the Framework for Financial Management Compliance in the SA Public Sector (page 20) Y N NA Reissue date: September

56 1.22 Generally, contracts are in writing and clarify requirements such as contract deliverables, price, performance standards, confidentiality and intellectual property Y N NA 1.23 Procedures exist to keep contracts up to date to assist the entity to operate with greater certainty and to effectively manage the contract Contract registers are maintained. Records demonstrate compliance with contractual terms Y N NA Y N NA 1.25 Access to financial and human resource information is restricted to authorised personnel. Confidentiality of financial and human resource information is maintained Y N NA Part 1: Financial management accountability Examples of procedures/policies/systems: Resources - Systems record personnel qualifications, skills, experience and membership of relevant industry, professional and trade associations. - Staff retention and succession plans. - Breakdowns in internal controls are monitored. - Personnel performance is evaluated consistent with the entity s performance appraisal system. Risk - All accidents or other incidents that could give rise to an insurance claim are reported to appropriate personnel. Reissue date: September

57 Information - Communication protocols (down, up and across). - Executive management reporting system. - Information systems, communication protocols, directions and priorities are reviewed to ensure they still meet the entity s needs. - Management are aware of requirements in relevant legislation, Cabinet/ERBCC requirements, SA Government policies and other standards (refer to the Framework for Financial Management Compliance page 20). - Policies and procedures are reviewed regularly for compliance with applicable legislation, ERBCC/Cabinet requirements, SA Government policies and other standards (refer to the Framework for Financial Management Compliance page 20). - Appropriate tools (e.g. logs, checklists) are used to ensure records are received and retained for appropriate periods and access is restricted to authorised personnel. - Procedures are established for handling and storing hazardous materials; occupational health and safety etc. Reissue date: September

58 Part 2: Financial accounting and budgeting (Attributes: plans, systems; structures; policies and procedures) 1 = Not effective 5 = Highly effective Details of items or responsibility to Area/Person Assessment of Action Plan to be attended to: responsible performance improve level of performance Plans 2.1 Planning processes that reflect the entity s strategic directions exist. 2.2 Budgets and plans are in accordance with the entity's strategic plans. The entity s strategic plan aligns with the State s strategic plan Y N NA 2.3 Systems have been developed to ensure that the entity operates within agreed resource allocations. Management strategies have been developed for all known risks that may affect the financial sustainability of the entity Y N NA 2.4 A fraud and corruption control plan exists and is reviewed/amended at least every two years. This is in addition to the annual review of fraud policies Y N NA Reissue date: September

59 General 2.5 Appropriate segregation of duties is maintained. Generally, the following types of responsibilities would be segregated: - Transaction initiation - Transaction authorisation (including disposal) - Transaction recording - Custody of assets - Reconciliation of assets and liabilities to records Y N NA e.g. processing cash receipting is separated from the maintenance of accounts receivable balances; non-current tangible asset acquisition is separated from the recording of the disposal function; preparation of payroll is separated from the disbursements and human resource function. 2.6 Delegations of authority are reviewed at least annually. 2.7 Procedures for the review of all non-standard contracts and/or terms exist and are maintained Y N NA Y N NA 2.8 Project management methodologies are used to ensure projects (identified in the strategic plan) are delivered efficiently and effectively Y N NA Reissue date: September

60 2.9 Processes exist that ensure complete and accurate processing to the general ledger and subsidiary systems (eg payroll, accounts payable, accounts receivable, asset register) Y N NA 2.10 Reconciliations are performed on a regular basis, eg general ledger to subsidiary systems, bank accounts and source documents Y N NA Ensure movements and reconciling items are appropriately explained and actioned Processes exist that accurately record the effect of all tax transactions completed Y N NA Expenditure 2.12 Procurement, payment and accounts payable procedures and policies exist and are regularly reviewed Y N NA 2.13 All goods ordered/purchased and services requested/provided are in accordance with applicable legislation, regulations, Treasurer s instructions, entity s delegations of authority, entity contracts and/or whole of government contracts Y N NA 2.14 Only goods ordered or services requested that meet appropriate specifications or business requirements are accepted Y N NA Reissue date: September

61 2.15 All goods ordered/purchased and services requested/provided are completely and accurately recorded in a timely manner Y N NA 2.16 Resources are purchased in appropriate quantities at appropriate times for appropriate amounts to meet the entity s objectives Y N NA 2.17 Goods received and related information are processed in a timely manner and are transferred to the appropriate sections and stores promptly and completely and accurately recorded Y N NA 2.18 Goods ordered but not received or contracted services not provided are investigated on a timely basis Y N NA 2.19 All credits / discounts and goods returned are completely and accurately recorded in a timely manner Y N NA 2.20 Mechanisms to prevent the unauthorised use of purchase orders, credit cards, cheques etc exist and are maintained Y N NA 2.21 Cheque control procedures exist and are maintained Y N NA Reissue date: September

62 2.22 Authorisations for the de-recognition of, or adjustments to, amounts previously recognised (eg correcting journals for amounts in dispute, credit notes received) exist and are maintained Y N NA 2.23 Appropriate processes are in place to review new vendors Financial authorisations for the incurring, approval and payment of expenses are set at the right level, to the right people and strictly enforced Y N NA Y N NA 2.25 Approvers (as well as the initiators) are appropriately aware of the needs and requirements of the public authority and can readily determine if purchases being made are overpriced and/or not required Y N NA 2.26 Expenditure is in accordance with the agency s budget and quantities reflect normal usage patterns Y N NA 2.27 Staff with financial delegations understand their role in ensuring compliance with procurement and financial policies and practices and diligently exercise their delegations Y N NA 2.28 Adequate attention is given to the preparation and review of management reports, which may highlight inappropriate transactions early, including procurement irregularities Y N NA Reissue date: September

63 Payroll 2.29 Payroll procedures and policies exist and are regularly reviewed Employees are paid in accordance with wage enterprise agreement contracts, awards and other established policies Payroll is calculated and recorded accurately and completely (including payroll deductions) and only for approved services that are actually performed Y N NA Y N NA Y N NA 2.32 Bona fide reports exist and are regularly reviewed/checked, and discrepancies actioned. Income 2.33 Income recognition, income de-recognition, accounts receivable and debt write off procedures and policies exist and are regularly reviewed Y N NA Y N NA 2.34 Requests for invoices and raised invoices are in accordance with applicable legislation, regulations, entity s delegations of authority, entity contracts and/or service level agreements etc Invoices and request for invoices are authorised and completely and accurately recorded in a timely manner Y N NA Y N NA Reissue date: September

64 2.36 Credit notes are authorised and completely and accurately recorded in a timely manner Accounts receivable balances are monitored to ensure amounts are recovered in a timely manner Debts written off and/or provisions for bad debts are in accordance with applicable laws, regulations, Treasurer s instructions, and the entity s delegations Processes / mechanisms exists to review performance against contracts, service level agreements etc Service level agreements are established and documented for all services rendered to other SA Government entities Authorisations for the de-recognition of, or adjustments to, amounts previously recognised (eg correcting journals for amounts in dispute, credit notes given) exist and are maintained Y N NA Y N NA Y N NA Y N NA Y N NA Y N NA Assets 2.42 Tangible and intangible asset accounting procedures and policies exist and are maintained Y N NA Reissue date: September

65 2.43 Bank and deposit accounts and their operations are managed in accordance with applicable legislation, regulations, Treasurer s instructions and whole of government contracts Cash balances are regularly reviewed to ensure compliance with the Cash Alignment Policy Financial assets are managed in accordance with the entity s investment policies and to avoid cash shortfalls Cash receipts and cash disbursements are completely and accurately recorded All receipts are deposited/banked daily Y N NA Y N NA Y N NA Y N NA Y N NA 2.48 Capital expenditure is only undertaken in accordance with strategic and capital budgets Y N NA 2.49 Tangible asset acquisitions, revaluations, transfers, disposals, write offs, adjustments, de-recognitions and depreciation are completely and accurately recorded, in accordance with policies and procedures Y N NA Reissue date: September

66 2.50 Regular asset stocktakes are conducted. Stocktake records are reconciled to the asset register. Differences are investigated and resolved Y N NA 2.51 Regular inventory stocktakes are conducted. Stocktake records are reconciled to inventory records. Differences are investigated and resolved Inventory levels are reviewed on a regular basis to ensure optimal levels are carried Intangible assets are protected by intellectual property rights (where appropriate) and are completely and accurately recorded, including the associated amortisation Y N NA Y N NA Y N NA 2.54 Verification procedures exist to enable the existence and condition/impairment (where applicable) of all assets (including intangible assets) and liabilities on an annual basis All assets are safeguarded Y N NA Y N NA Liabilities 2.56 Personnel s leave balances are monitored and actively managed to ensure the employee benefit liability is kept to a minimum Y N NA Reissue date: September

67 2.57 Leave taken is certified by an appropriate senior officer and reconciled to payroll records Obligations entered into are in line with the entity s strategic and capital plan; in accordance with applicable legislation, Cabinet/ERBCC requirements, SA Government policies and other standards Borrowings (where entered into) are in accordance with Public Finance and Audit Act 1987 and Treasurer s instructions (eg TI 8) and DTF Leasing Guidelines Y N NA Y N NA Y N NA 2.60 Contingent liabilities and assets and guarantees are completely and accurately recorded and in accordance with Treasurer s instructions/accounting policy frameworks Y N NA 2.61 Contracts and service level agreement requirements are articulated clearly, understood by personnel and legally enforceable Y N NA 2.62 Contracts are disclosed in accordance with the Department of the Premier and Cabinet s Circular Y N NA Reissue date: September

68 Compliance Part 2: Financial accounting and budgeting Examples of actions/procedures/policies/systems: Plans - Strategic plan aligns with the State s strategic plan and reflects the governing body s/ce s strategic objectives. Planning process (e.g. planning day) uses the entity s objectives as the foundation and appropriate staff are involved in developing plans. General - Appropriate evaluation mechanisms are in place to report on the extent to which, once a project is completed, the outcomes and benefits delivered meet expectations. - Ensure staff with delegations of authority are aware of their responsibilities and requirements under Treasurer s instructions, State Procurement Board Policies and Internal policies etc. Expenditure - Use standard contract terms. - Ensure competitive bids are obtained for major acquisitions and regularly review ongoing contracts. - Investigate, maintain and regularly review vendor information, service delivery, product quality, price, lead-time requirements and financial stability. - Establish and maintain protocols for notification of potential vendor performance problems, appropriate investigation and resolution. - Maintain appropriate procedures for inspecting the results of services provided or items received. - Match invoice, receiving and purchase order information and follow up on missing or inconsistent information. - Ensure information is being entered into the accounts payable, job cost and purchase order system on a timely basis. - Ensure accurate input of data via reconciling accounts payable records with vendor statements, use of control totals, validity checks and independent reasonableness checks. - All changes to vendor files relating to expenditure activities are independently checked to source documentation and approved by an authorised officer. - Policies, procedures, systems and internal controls exist for all types of expenditure activities, including but not limited to grants, payroll, gifts, personal expenditure, reimbursements and other recurrent expenditure. - Maintain accurate inventory/store records. - Reconcile accounts payable subsidiary ledger with general ledger and purchase and cash disbursement transactions and reconcile daily cheque run with system reports. Reissue date: September

69 - Cancel all incorrect cheques. - Pre-number, account for and maintain physical security over purchase orders and cheques. Investigate missing documents. - Maintain physical security over mechanical cheque signers and signature plates. - Expenditure is authorised, and payments are made/disbursed, in accordance with applicable requirements (e.g. enabling legislation, Treasurer s Instructions 8, 14, 15 etc) - Reconciliations are provided to the Department of Treasury and Finance in accordance with Treasurer s Instruction 6. - Grant payments/agreements/supporting documentation are in accordance with Treasurer s Instruction Have pre-determined authorisation limits on how much employees can authorise and develop an exceptions report that includes all large purchases, write-offs and derecognitions. - Annual Accounts Payable Performance Reports are provided to the Department of Treasury and Finance in accordance with Treasurer s Instruction 11. Payroll - Ensure payroll system correctly records agreed terms of payment and accurately processes this information. - Ensure pay rates/deductions are properly authorised and accurately processed. - Maintain logs or other documentation supporting or tracking changes to payroll database. - Establish and maintain bona fide reports and/or perform random sightings of employees in remote locations. - Maintain reconciliations of the employee subsidiary ledger to the general ledger control accounts and investigate and resolve any differences. Compare total hours and number of employees with totals in the payroll register. - Scan source documents and maintain backups. - Ensure pay goes to different bank account numbers. If different employees use the same bank account number, ensure there is a good reason. Revenue - Reconcile accounts receivable subsidiary ledger with general ledger and revenue and cash receipt transactions and reconcile daily banking s with system reports. Follow up and resolve differences. - Reconcile physical performance of services or delivery of goods to invoice date. - Ensure accurate input of data via reconciling accounts receivable records with customer statements, use of control totals, validity checks and independent reasonableness checks. - All changes to customer master files relating to income activities are independently Reissue date: September

70 checked to source documentation and approved by an authorised officer. - Mail accounts receivable invoices or statements periodically and investigate and resolve disputes or inquiries by personnel that are independent of the invoicing function. - Monitor number of debtor complaints regarding improper invoices or statements. - Authorise credit memos by personnel independent of accounts receivable function. - Debts are only written off in accordance with the provisions of Treasurer s Instruction 5. - Periodically follow up accounts that are not paid in a reasonable time frame. - Check sales figures with invoices and reconcile sales with takings and purchase card receipts. Ensure all sales match documents such as delivery receipts. Assets - Segregate custodial and record keeping functions. - Physical controls are established and maintained over access to and use of assets. - Reconcile the asset register and bank account with the general ledger. - Information systems should identify all sources of cash and dates cash is due (budget allocations, debtor collections, sales of assets etc) and cash requirements and date cash is needed (accounts payable, loan payments, payroll etc). - Relevant personnel are aware of the Cash Alignment Policy. - Cancel cash disbursement supporting documents to prevent their resubmission for payment. - Establish clear definitions of asset categories/classes. - Appropriate approvals are obtained before property, plant and equipment is disposed of/written off. - Ensure non-current asset revaluations and useful life assessments are performed in accordance with Accounting Standards and Accounting Policy Framework requirements. - Record and monitor use of tangible and intangible assets for non-entity related activities (eg motor vehicles, internet, photocopiers). Liabilities - Involve the Crown Solicitors Office at the planning stage of all significant contracts and agreements or have significant contracts reviewed by Crown Solicitors Office before execution. - Establish and maintain a contract register that articulates obligations; renewal requirements; tax issues etc. - Reconcile payments made under a Service Level Agreement or Contract to the Service Level Agreement or Contract. Reissue date: September

71 - Appropriate personnel with appropriate delegation authorise/execute contracts/agreements and appropriate approvals are obtained for contract variations/extensions. - Ensure relevant staff are aware of the Public Finance and Audit Act 1987, Treasurer s instructions, Treasurer s mandate to use services provided by the South Australian Government Financing Authority s and DTF Leasing Guideline requirements in relation to borrowings. - Establish and maintain a Contingent Liability/Asset and Guarantees register. - Establish a leave policy that encourages personnel to take leave on a regular basis. Supervisors/Managers conduct a regular review of leave to ensure balances are within policy requirements. Reissue date: September

72 Part 3: Financial management reporting (Attributes: reports, monitoring and information and communication systems) 1 = Not effective 5 = Highly effective Details of items or responsibility to Area/Person be attended to: responsible Reports Assessment of performance Action Plan to improve level of performance 3.1 Systems and processes exist to provide timely, accurate and complete information needed by management, central agencies and others Y N NA 3.2 Compliance reporting is incorporated into standard operational reports. 3.3 Budget reports are prepared on a timely basis and in compliance with applicable legislation and Treasury requirements Y N NA Y N NA 3.4 Regular meetings are held between personnel and Treasury personnel to discuss key budget issues Y N NA 3.5 External financial statements are prepared on a timely basis and in compliance with applicable legislation and regulations, Treasurer s instructions, accounting policy framework and accounting standards Y N NA Reissue date: September

73 3.6 Taxation reports are prepared on a timely basis and in compliance with applicable legislation and regulations, Treasurer s Instruction 25 Taxation Policies and taxation manuals Y N NA 3.7 Statutory and other external reporting is complete and accurately prepared. 3.8 Where uncertainty exists, the entity obtains advice on the interpretation of requirements from DTF; ATO; consultant etc Y N NA Y N NA Monitoring 3.9 A process exists to regularly monitor, measure and report on the compliance program. Note TI 28 requires agencies to ensure it addresses within a reasonable time or in a reasonable manner an irregularity or internal control / governance failure identified by the Auditor- General Y N NA 3.10 Internal reporting mechanisms exist that allow the executive / governing body to measure the entity s performance and make effective decisions on a timely basis Y N NA 3.11 Records are maintained that demonstrate compliance with applicable legislation, Cabinet/ERBCC requirements, SA Government policies and other standards Y N NA Reissue date: September

74 3.12 A process of monitoring expenditure against budget exists, including meaningful explanations for material variances Risk assessment and management plans are prepared and regularly monitored. Information and Communication Systems 3.14 Plans that optimise an entity s investment in, and use of, IT exist and are maintained. Users are involved with the development of IT initiatives Y N NA Y N NA Y N NA 3.15 Processes exist that ensure information systems are available when needed Y N NA 3.16 A disaster recovery / business continuity plan exists and an information security risk assessment has been performed Y N NA 3.17 A data security policy and compliance criteria exists. An information classification scheme including security categories and security levels also exists and is reviewed Y N NA Reissue date: September

75 Information and Communication Systems - Use project management procedures/tools for the management/development of IT solutions. - System and program change procedures are maintained, e.g. change request approvals; all changes subject to appropriate testing and approvals. - Maintain production job schedules; job set up and execution procedures. - Procedures exist for identifying, reporting and approving various IT actions such as initial loading of software; system failures; emergency situations; back up and recovery. - Maintain physical security over information systems and appropriate system software change procedures/controls. - Regular system audits are conducted. - Establish information systems that present information accurately and in a manner that is consistent with internal and external requirements. - Passwords should be changed frequently and kept secure (e.g. not written near or accessible at employee workstations). - Assess staff access to media copiers and USB ports. - With departing employees, take a forensic-grade copy of hard drives and do not shut down mobile accounts immediately. Reissue date: September

76 FINANCIAL REPORTING CHECKLIST An effective financial reporting plan/checklist is critical to demonstrate the entity has developed and implemented policies and procedures to meet its regulatory financial reporting requirements. This financial reporting checklist will assist in ensuring the efficient and effective preparation and audit of financial statements and that associated accountability requirements have been discharged. This checklist is structured in five parts: Part 1: Preliminary Part 2: Statement of Financial Position Part 3: Statement of Comprehensive Income Part 4: Other matters relating to financial statement preparation Part 6: Quality assurance The checklist is illustrative, not exhaustive. The form and content of the checklist may need to be modified depending on the size, structure and nature of activities undertaken by public authorities. Item/Responsibility Responsible Officer Completed Part 1: Preliminary 1.1 Attend Government Accounting and Taxation Information Forums for developments in public sector reporting. 1.2 Review Australian Accounting Standards, Accounting Policy Frameworks and Model Financial Statements for changes in reporting requirements etc. 1.3 Consider whether the Chart of Accounts should be amended as a result of changes in Australian Accounting Standards and/or Accounting Policy Frameworks. Reissue date: September

77 Item/Responsibility Responsible Officer Completed 1.4 Consider whether the reporting entity has changed, eg machinery of government changes and/or whether controlled items are still controlled and administered items are still administered. Note where an entity is abolished, entities are encouraged to prepare financial statements as early as practicable after the date that the entity ceases to exist. 1.5 Consider/assess whether the carrying amount of non-current tangible assets is materially different from its fair value. Where the carrying amount is materially different to fair value, perform a revaluation (a revaluation can be performed either internally or externally, however an external revaluation must be performed every 5 years). 1.6 Consider/assess the remaining useful life and residual value of non-current depreciable assets. 1.7 Consider/assess whether there are any indicators of impairment for non-current tangible assets, intangible assets and financial assets. 1.8 Identify remote locations/business units/divisions from which information may be required to prepare financial statements. 1.9 Develop a collection system to source information from remote locations/business units/divisions on: cash on hand and in transit; debtors and amounts that may be uncollectible; employee information, eg bona fides; inventory stock-takes; non-current assets verification/stock-take; work in progress; material commitments; Reissue date: September

78 Item/Responsibility Responsible Officer Completed lease arrangements; contingent assets and liabilities; indemnities and guarantees; and legal advice obtained may impact on the preparation of financial statements Maintain a register of remote location/business units/divisions from which financial reporting information was requested, to ensure all responses are received on a timely basis Draft and forward letters to external information providers to source financial reporting information, such as confirmations where income is collected on behalf of the entity, bank account confirmations and loan balances etc Consider the Financial Management Compliance Checklist prepared by the Department of Treasury and Finance for agency-specific details and circulate to corporate head office and remote locations/business units/divisions as required Maintain a register of internal control sign-offs issued to ensure all responses are received on a timely basis Ensure all reconciliations are prepared for each month-end up to and including 30 June, e.g. bank account, subsidiary ledgers. Ensure movements and reconciling items are appropriately explained and actioned Ensure all reconciliations performed are dated and certified by the preparer and reviewer Reverse prior year year-end journals where auto reverse journals have not been used or where year-end journals were not reversed in Period One. Reissue date: September

79 Part 2: Statement of Financial Position Current Assets 2.1 Cash and cash equivalents Prepare a schedule detailing bank account information, eg type of account (section 8, section 21, accrual appropriation, surplus cash etc), whether the deposits are with the Treasurer or not, the branch and domicile of bank accounts Review bank account reconciliation prepared as at 31 May to identify unusual and/or long-outstanding reconciling items for adjustment prior to year-end Combine/aggregate cash on hand information and cash in transit information received from remote locations/divisions/business units. Reconcile cash in transit to bankings made subsequent to year-end Reconcile cash on hand, deposit accounts, special deposit accounts, accrual appropriation account and surplus cash working account to balances held in the general ledger. Ensure movements and reconciling items are appropriately explained and actioned Reconcile agency s records to the Department of Treasury and Finance records for deposit accounts, special deposit accounts, accrual appropriations and surplus cash working account. Ensure movements and reconciling items are appropriately explained and actioned Ensure required amounts are transferred into the accrual appropriation account and surplus cash working account in accordance with Department of Treasury and Finance directives and/or Cash Alignment Policy Where administered and controlled transactions use the same bank account, prepare journal entries to recognise the cash split for administered/controlled accounts in the general ledger. Reissue date: September

80 2.1.8 Prepare bank account reconciliation as at 30 June for Controlled Deposit accounts, eg collections, disbursements, administered deposit accounts. Ensure movements and reconciling items are appropriately explained and actioned. Forward reconciliations to the Department of Treasury and Finance Record funds transferred from the surplus cash working account to the Consolidated Account in accordance with the Cash Alignment Policy File bank account confirmations and loan balance advices received from Department of Treasury and Finance, Westpac etc for audit review. 2.2 Receivables Prepare a schedule detailing receivable information (e.g. trade debtors from various sources, prepayments), classified into: amounts expected to be realised within 12 months and beyond 12 months; related party transactions; and receivables with other SA government entities Review receivables reconciliation prepared as at 31 May to identify unusual and/or long-outstanding reconciling items for adjustments prior to year-end Combine/aggregate debtor and doubtful debt information sourced from remote locations/business units/divisions Raise journals to recognise debtors and provisions for doubtful debts as advised by remote locations/business units/divisions Reconcile accounts receivable subsidiary ledgers to general ledger at 30 June. Ensure movements and reconciling items are appropriately explained and actioned Ensure tax receivables (e.g. GST, payroll tax, income tax equivalents) at 30 June agree to July returns and appropriate reconciliation (e.g. BAS, payroll tax, STER schedules) and all variances are accounted for. Reissue date: September

81 2.2.7 Classify receivables as with SA Government or non-sa Government (the controlled entities listing for SA Government, available from the Budget Monitoring System, may be of assistance) Review debts outstanding and identify debts that a provision should be raised for; written off; or waived requires approval as per Treasurer s Instruction 5 Debt Recovery and Write Offs Update the register for debts written off and/or waived, and ensure the register is complete (maintained in accordance with Treasurer s Instruction 5 Debt Recovery and Write Offs). 2.3 Interest Accrual Calculate accrual interest on bank deposit accounts and/or special deposit account as at 30 June File confirmations received from the Department of Treasury and Finance. 2.4 Prepayments In April/May, discuss with Accounts Payable staff year-end processes for the collection of prepayment information, including the appropriate mechanism to capture this information, e.g. flag the account; photocopying; reviewing May/June batches for material accounts paid Identify prepayments at 30 June: aggregate amounts sourced from remote locations/business units/divisions; and review the normal prepaid items, i.e. subscriptions, insurance, lease payments, registrations, accommodation, maintenance Raise journals to reflect the identified prepayments, as appropriate Classify prepayments as with SA Government or non-sa Government entities. (the controlled entities listing for SA Government, available from the Budget Monitoring System, may be of assistance). Reissue date: September

82 2.5 Work in progress Combine/aggregate amounts sourced from remote locations/business units/divisions relating to services performed and/or goods supplied but not yet invoiced Where appropriate, reconcile job cost system to general ledger Raise journals to reflect work in progress identified. 2.6 Working accounts Where an entity uses working accounts and/or clearing accounts, ensure these are reconciled, eg payroll clearing account, various project working accounts. 2.7 Inventories Prepare a schedule detailing location, physical number and dollar amount of inventories; and the type of inventory held, i.e. held for distribution; at no or nominal amount; or other Perform an inventory stock-take as at 30 June. Ensure movements and reconciling items are appropriately explained and actioned. Ensure the stock-take is dated and certified by the preparer and reviewer Assess inventory for write-downs, and raise journals to write down the cost of inventory where required. File supporting documents Reconcile inventories held to general ledger balance for 30 June. Ensure movements and reconciling items are appropriately explained and actioned. Reissue date: September

83 2.8 Financial Assets Prepare a schedule detailing: the form, type and classification of financial assets (note: derivatives are to be measured at fair value, interest-free loans for a very long period of time have a carrying value of zero); and for each investment, prepare a schedule showing the face value; the cost of the investment; interest rate; date of maturity; and market value. Where applicable, obtain details of investments acquired during the year, including the date and cost of acquisition; and details of investments sold during the year, including the date of disposal and consideration received. Source documentation supporting these schedules should be available Consider/assess whether there are any indicators of impairment Reconcile investments held to the general ledger for 30 June. Ensure movements and reconciling items are appropriately explained and actioned File confirmation documents from banks, SAFA, Public Trustee, etc. 2.9 Other Current Assets Prepare a schedule of the assets included within the category Other Current Assets, supported with appropriate documentation. Non-current assets 2.10 Tangible Assets Review reconciliation of general ledger and asset register prepared as at 31 May to identify unusual and/or long-outstanding reconciling items for adjustment prior to yearend. Reissue date: September

84 Review stock-takes of non-current tangible assets including attractive items and follow up discrepancies. Ensure all stock-takes are dated and are certified by the preparer and reviewer Consider/assess: assets remaining useful lives and residual balances; any indicators of impairment; and carrying amount is not materially different from fair value. Raise journals to reflect revaluations, estimate revisions and impairment in the general ledger, and update the fixed asset register accordingly Obtain reports from the fixed asset register as at 30 June to provide the following information for each class of assets: additions made throughout the year; disposals made throughout the year, including the details of proceeds from asset disposals; transfers made throughout the year; and depreciation and amortisation by class of asset Reconcile opening and closing balances of non-current tangible assets. Prepare a non-current tangible asset movements schedule. Ensure movements and reconciling items are appropriately explained and actioned Reconcile balances held in the fixed asset register to the general ledger as at 30 June. Reconcile balances in fixed asset register to stock-take. Ensure movements and reconciling items are appropriately explained and actioned Reconcile depreciation expense as calculated by fixed asset register to the amount identified in the general ledger. Ensure movements and reconciling items are appropriately explained and actioned. Reissue date: September

85 Reconcile gain/loss on sale/disposal of non-current tangible assets. (Note: ensure gain/loss on disposal is disclosed on a net basis on the face of the Statement of Comprehensive Income). Ensure movements and reconciling items are appropriately explained and actioned Where applicable, file valuation reports received from valuers. Ensure the basis of valuation, the date of valuation and name and qualification of the valuer have been documented. (Note: consider componentisation thresholds when engaging valuers) Intangibles Reconcile opening and closing balances of intangible assets. Prepare an intangible asset movement schedule, separately identifying internally generated intangible assets and other intangibles. Reconcile intangibles identified in the asset register to the general ledger (note: intangible assets are carried at cost). Ensure movements and reconciling items are appropriately explained and actioned Reconcile amortisation expense as calculated by the fixed asset register to the amount identified in the general ledger. Ensure movements and reconciling items are appropriately explained and actioned Ensure enhancements and modifications to intangible assets are expensed where there is no increase in service potential Consider/assess assets remaining useful lives and residual balances, and any indicators of impairment. Liabilities 2.12 Payables In April/May, discuss with Accounts Payable staff the year-end processes for the collection of payable information. For example, these could be captured in a spreadsheet that would show sufficient details to identify the invoice, e.g. creditors name, invoice number, amounts paid and the nature of services/goods. Reissue date: September

86 Consider keeping the general ledger open for 14 days to allow the bulk of creditors to be processed in June Reconcile creditors subsidiary ledger to general ledger as at 30 June. Ensure movements and reconciling items are appropriately explained and actioned Ensure tax payable at 30 June agrees to July tax returns and reconciliation, with all variances accounted for, e.g. GST, payroll tax, income tax equivalent payments Classify payables as with SA Government or non-sa Government entities (the controlled entities listing for SA Government, available from the Budget Monitoring System, may be of assistance) Determine the amount expected to be realised within 12 months and beyond 12 months Accruals In April/May, discuss with Accounts Payable staff the year-end processes for the collection of accrual information. These could be captured in a spreadsheet that would show sufficient details to identify the source documents, e.g. vendor name, unique identifiers, amounts paid and the nature of goods/services Identify accruals by reviewing items such as interest, on-costs, administration expenses and audit fees Classify accruals as with SA Government or non-sa Government entities (the controlled entities listing for SA Government, available from the Budget Monitoring System, may be of assistance) Determine the amount expected to be realised within 12 months and beyond 12 months Employee Benefits - Accrual for Salary and Wages Liaise with payroll staff to determine when the last pay will be processed, and Reissue date: September

87 determine how many days remain up to 30 June. Request a report detailing the salary accrual by employee for each cost centre (note: salary accrual will be a short-term employee benefit and will be measured at nominal amounts and classified as a current liability) Refer to APF IV Financial Asset and Liability Framework to identify the on-cost rates to be applied Raise journals as required to recognise the salary and wages accrual and associated on-costs (note: on-costs are recognised as a payable) Employee Benefits - Long Service Leave & Annual Leave Refer to APF IV Financial Asset and Liability Framework to identify the rates and percentages to be used in calculating employee benefits Request from payroll staff a report showing the annual leave liability and long service leave liability by employee for each cost centre (payroll reports should show employee s entitlement to leave, number of days owed and remuneration rate) Ensure short-term employee benefits are measured at nominal amounts (unless agencies have substantial excess leave balances) and long-term employee benefits at net present value Determine the current and non-current split for employee benefits Raise journals to recognise employee benefit and on-cost amounts as calculated (note: on-costs are recognised as a payable) Provisions - Worker s Compensation Contact the Office for the Public Sector (Workers Compensation Performance unit) within the Department of the Premier and Cabinet for a copy of the worker s compensation assessment performed by actuaries. File a copy of the advice received for audit purposes Raise journal to reflect the change in the provision for worker s compensation. Reissue date: September

88 Reconcile opening and closing balances and prepare a movement schedule. Ensure movements and reconciling items are appropriately explained and actioned Unearned Revenue Prepare a schedule detailing items included Combine/aggregate unearned revenue information collected from remote locations/business units/divisions Identify unearned revenues by reviewing items such as rental income, premiums etc Raise journals for unearned revenue, where required Leases Liaise with the section responsible for the management of assets to identify any new leases, lease incentives and terminated leases Combine/aggregate lease information collected from remote locations/business units/divisions Update relevant lease calculation spreadsheets and lease liability schedules to reflect payments made during the year and new leases commenced. Prepare any required reconciliations Raise journals to update the general ledger accordingly Determine the split between current and non-current liabilities. Equity Prepare a movement schedule, including a reconciliation of opening and closing balances for the asset revaluation reserve, other reserves, retained earnings and contributed capital. Ensure movements and reconciling items are appropriately explained and actioned. Reissue date: September

89 Part 3: Statement of Comprehensive Income Income 3.1 Prepare a schedule of income items and substantiate the material income items with relevant source documents or worksheets. Request confirmation of the total appropriation drawn down from the Department of Treasury and Finance. Reconcile the annual appropriation amount to the general ledger. Ensure movements and reconciling items are appropriately explained and actioned. 3.2 Reconcile interest revenues as detailed in bank accounts and accrual interest journals to the general ledger. Ensure movements and reconciling items are appropriately explained and actioned. 3.3 Reconcile the grant funding to the grant agreement register. Ensure movements and reconciling items are appropriately explained and actioned. 3.4 Compare actual amounts to budget amounts and provide explanations of major variances. Expenses 3.5 Request from payroll a year-to-date employee payments report. Reconcile payments made to employees in the general ledger to payroll report and accrual journals. Ensure movements and reconciling items are appropriately explained and actioned. 3.6 Substantiate the material expense items with worksheets or relevant source documents. 3.7 Compare actual amounts to budget and provide explanations of major variances. Reissue date: September

90 Part 4: Other matters relating to financial statement preparation Format of the Financial Statements 4.1 Prepare the Statement of Comprehensive Income using the template in the Model Financial Statements. 4.2 Prepare the Statement of Financial Position using the template in the Model Financial Statements. 4.3 Prepare the Statement of Changes in Equity using the template in the Model Financial Statements. 4.4 Prepare the Statement of Cash Flows using the template in the Model Financial Statements. 4.5 Reconcile the following line items in the Statement of Cash Flows to previous reconciliations or external data as follows: recurrent appropriations agree to cash records capital appropriations agree to cash records proceeds from sale of non-current assets reconcile to fixed asset register reports payments for property, plant and equipment reconcile to fixed asset register reports principal repayments under financing activities reconcile to analysis previously prepared. 4.6 Reconcile Net Cash from Operating Activities to Net Cost of Services for inclusion in the notes accompanying the financial statements. Disaggregated Disclosures 4.7 Liaise with the management accountant to understand the program budget costing methodology. Reissue date: September

91 4.8 Ensure the totals for each activity sum to the total in the Statement of Financial Position and the Statement of Comprehensive Income for the agency as a whole. Dissect income, expenses, assets and liabilities via budget allocation methodology. Notes to accompany the financial statements 4.9 Review the Model Financial Statements for illustrative examples of notes accompanying the financial statements Consultants disclosure note Prepare the consultants note disclosure. Using the guidance in APF II General Purpose Financial Statements Framework, objectively review both the general ledger object codes for consultants and contractors and assess each engagement to identify whether payments are to consultants or contractors Allocate consultancy expenditure to bandwidths as illustrated in the Model Financial Statements Fees paid / payable to Auditors disclosure note Determine the costs of other services and audit fees provided by the Auditor. Obtain written documentation from Audit regarding the accrual for the current year s audit fee Employee remuneration disclosure note Request appropriate reports from payroll. Request a copy of the recent FBT return from the tax accountant to identify those employees receiving non-monetary benefits. Refer to APF II General Purpose Financial Statements Framework and APF VI Definitions to assist with identifying whether items are remuneration or/and normal remuneration. Reissue date: September

92 4.14 Board members remuneration disclosure note Scan the whole of government board and committee register maintained by the Department of the Premier and Cabinet to identify all boards and committee that the entity is responsible for. Refer to APF II General Purpose Financial Statements Framework for details of the note disclosure Budgetary Reporting Scan Budget Paper 4 to identify if your entity is captured. All entities reporting a budgeted Statement of Comprehensive Income and Total Investing Expenditure Information (for controlled and/or administered) in Budget Paper 4 are captured by APF II. Original budget amounts are reported and not adjusted to reflect revised budgets, administrative restructures etc. In aligning budget information with financial statements start from the BMS data that underlies the Portfolio Statements. Where there are budget reallocations between line items, prepare reconciliations between the BMS data that generated the Portfolio Statements and the line items in the Budgetary Reporting Note. Note: where mapping issues have caused immaterial differences, based on a cost/benefit analysis, consider not pursuing reallocation amendments. Where financial statement preparation are subject to an outsourced service arrangement, liaise with the outsourced service provider (eg Shared Services SA) as a large part of the variance explanations between budget and actual may be sourced from within the agency. Refer to APF II General Purpose Financial Statements Framework and the Not-for- Profit Model Financial Statements for details of the note disclosure and guidance TVSP disclosure note Liaise with Human Resources section to obtain TVSP information. Reconcile information obtained to DTF confirmation document. File DTF confirmation for audit purposes. Refer to APF II General Purpose Financial Statements Framework for details of the note disclosure. Reissue date: September

93 4.16 Contingencies, Obligations etc disclosure notes Combine/aggregate information obtained from remote locations/business units/divisions regarding contingent assets and liabilities, obligations, guarantees and indemnities. In addition, consider contingencies, obligations, guarantees and indemnities at a head office/corporate level. Obtain correspondence where relevant and file Commitment disclosure notes Other Information Prepare schedules and supporting documentation for all material commitments, e.g. leases. Refer to the Model Financial Statements for illustrative examples Consider any after-balance date events and the associated impact on the financial statements, if any Where a machinery of government change/administrative restructure has occurred, consider using the Administrative Restructure Checklists developed by the Department of Treasury and Finance Ensure all voluntary changes in accounting policies are accounted for retrospectively, unless it is impracticable to do so. Ensure all prior period errors are accounted for retrospectively (via re-stating prior period information) unless it is impracticable to do so. Ensure all changes in accounting estimates are accounted for prospectively. Part 5: Quality Assurance Peer Review 5.1 Arrange for the financial statements to be peer reviewed via another officer/audit committee. Reissue date: September

94 5.2 Forward to the Auditor-General s Department: the general purpose financial statements, by 11 August each year; the annual management representation by [ ]; details of contingent obligations by [ ]; statements of private interest and/or declarations of related party transactions for senior officers by [ ]; and an assessment on certain matters relating to fraud by [ ]. 5.3 Have on hand to provide to Audit: board and committee meeting minutes; any legal opinions that relate to financial representation matters; and details of establishment of partnerships, body corporates or trusts to carry out any functions of a public authority. Reissue date: September

95 ADMINISTRATIVE RESTRUCTURE CHECKLIST FOR THE TRANSFEREE ENTITY This checklist/guidance is primarily aimed at administrative units established under the Public Sector Act 2009 but may also assist statutory authorities in the implementation of administrative restructure/machinery of government changes. This checklist is illustrative and is not exhaustive. A transferee entity is an entity that receives a part of or full function/activity from another entity. The checklist is structured via the following main headings: External financial reporting Internal financial reporting Taxation Funding Deposit accounts and banking Other matters such as contractual matters; employees; and other information requirements. Reference External Financial Reporting Responsible Officer Completed Public Sector Act 2009 sec 26 and 9 Obtain a copy of the proclamation made by the Governor or notice made by the Premier (published in the Government Gazette) or agreement between Chief Executives. APF II para APS 5.8 & APS 5.10 Determine the date control effectively passes, i.e. where functions are transferred between entities. (The deemed date in the Government Gazette shall be recorded as the date that control passes. This is usually the first day of the following month.) If no date is deemed in the Government Gazette the date will be that of the Gazette. In the unusual event that there is clear evidence that control passed on a date other than the dates specified above and where adoption of the dates specified would result in a material misstatement of financial performance or position - the date of transfer shall be the date control actually passed). Reissue date: September

96 Reference External Financial Reporting Responsible Officer Completed APF II para APS 3.4, 5.2 & 5.4 Obtain a copy of the audited financial statements for reporting entities and/or significant/material functions transferred (for opening balances) and where applicable: recognise a contribution by owners in the Statement of Changes in Equity where a transfer of net assets arises; or recognise a distribution to owners in the Statement of Changes in Equity where a transfer of net liabilities arises. APF II para APS 5.5 and APF III para APS 2.12 Assets acquired and liabilities assumed as a consequence of the administrative restructure are recognised at the amounts recorded by the transferor entity immediately prior to the restructure. APF II para 5.7.1, APS 5.10 The notes accompanying the transferee entity s general purpose financial statements will reflect the: income and expenses attributable to the transferred activities for the reporting period, showing separately the income and expenses recognised by the transferor government entity during the reporting period; the assets recognised and liabilities assumed as a result of the restructure of administrative arrangements during the reporting period by class; and the identity of the transferor; a brief statement of functions transferred; the date of effective transfer and the authority for the transfer e.g. Cabinet, Government Gazette. APF II para APS 5.12 Where an entity is abolished, the Chief Executive of the transferee entity acquiring the majority value of net assets from the abolished entity will prepare the financial statements/report of the abolished entity for its final reporting period. The transferee entity shall comply with section 23 of the Public Finance and Audit Act 1987 in respect of the certification and audit of the financial statements of the abolished entity. Note where an entity is abolished, entities are encouraged to prepare financial statements as early as practicable after the date that the entity ceases to exist. Reissue date: September

97 Reference External Financial Reporting Responsible Officer Completed Obtain copies of supporting documents and associated schedules/registers to the transferor entity s financial statements/reports eg debts written off; contingent assets/liabilities; guarantees and indemnities, relevant non-current asset records (such as stocktake and valuation details) etc. Also consider whether functions transferred are controlled or administered for the purposes of the transferee s reporting entity. TI 19 clause to Provide all information requested by the Minister, Treasurer, Under Treasurer or authorised delegate relating to the restructure, in a timely manner and on such a basis as directed. Reference Internal Financial Reporting Responsible Officer Completed Obtain a copy of the transferor entity s comprehensive chart of accounts listing and consider the impact of the administrative restructure on account mappings/upstream codes. Liaise with transferor entity to identify any specific internal reporting requirements for the transferred entity/functions. Discuss with the appropriate DTF staff to assess whether any adjustments are required to the following areas: Monthly financial monitoring budget (including profiles) and actuals (Budget branch) Capital, budget initiative and consultancy monitoring returns (Budget branch) Mid-year review, budget and carryover request returns (Budget branch) Mapping for end of year actual results (Public Finance branch) Reissue date: September

98 Reference Internal Financial Reporting Responsible Officer Completed Where applicable, obtain from the transferor entity a list / register of any items being investigated for fraud. Liaise with the transferor entity to agree on cut off dates for transaction processing, e.g. accounts payable, accounts receivable, payroll. Ideally this date will be as close as possible to the date control passes. Liaise with the transferor entity regarding corporate account bills that will require transfer (e.g. mobile phone accounts, cab charge vouchers, accommodation charges) and for information on any other expenses such as IT and payroll processing. Reference Taxation Responsible Officer Completed NAT Advise, in writing, the Department of Treasury and Finance, Australian Taxation Office and Revenue SA of changes to authorised contact officers for taxation matters (names, phone numbers, and mailing addresses). (Note: The Privacy Act 1988 protects the privacy of information. It is an offence for a tax officer to give information to anyone other than the authorised contact officer). TI 22 clause 22.8 Tax Equivalent Payments Obtain a copy of the current year s returns for tax equivalent payments and associated supporting documentation from the transferor entity. TI 25 clause Payroll Tax All personnel transferred have been included in the transferee entity s payroll tax return from the deemed date that control effectively passes. The payroll tax return has been lodged with the Commissioner of State Taxation within seven days of the end of the tax period. Reissue date: September

99 Reference Taxation Responsible Officer Completed PAYG Manual, sec 8.4 PAYG and administrative restructures GST Manual sec. 3 to Pay As You Go Tax Consider whether Tax File Number Declaration Forms are required for all transferred employees. Consider whether there is an impact on existing PAYG registrations. Goods and Services Tax Consider whether there is an impact on your existing ABN and GST registration and grouping. (Example 1: If a unit that was individually registered and grouped with Dept A is transferred to Dept B, Dept B will advise the ATO of the additional unit within Dept B s group Example 2: If one entity is split into two, the simplest registration arrangement is to transfer the ABN of the existing entity to one of the new entities and separately register the other entity Example 3: If two or more existing entities amalgamate to form one entity ie the two entities cease to exist, their GST registrations would be cancelled* and the new entity would be separately registered.) *Completed cancellation forms (Nat 2955) should be forwarded to the Department of Treasury and Finance. In addition completed ABN registration forms (Nat 2946) should be forward to the Department of Treasury and Finance for Proof of Identity requirements. GST Manual sec & Where there is a change to the formation of a GST group, the representative member is to notify the formation to the Commissioner in the approved form on or before the day by which the entities are required to give the Commissioner their BAS for the tax period in which the formation takes place Reissue date: September

100 Reference Taxation Responsible Officer Completed GST Manual sec GST Manual sec Private Taxation Ruling GST Manual sec Consider whether any of the required information on issued tax invoices need to be amended. (Tax invoices must have sufficient information to determine the suplier s identity and ABN, any machinery of government change that involves an entity being abolished, created, name changed or a part or division being transferred generally will require changes to be made to tax invoices. The SA Government has a three month period during which tax invoices showing incorrect details as a result of machinery of government changes will be accepted for GST purposes.) Advise your suppliers of recipient changes to be made to tax invoices. (To be able to claim ITC, the entity needs to hold a valid tax invoice at the time it lodges its BAS. If the value of goods or services to which the tax invoice relates is $1,000 or more, the supplier is required to show sufficient information to determine the recipient s identity or ABN. If the machinery of govt change impacts on any of these then the supplier needs to be advised.) Develop a mechanism to ensure all partially completed transactions are finalised within three months. (The SA Government has a three month period during which tax invoices showing incorrect details as a result of machinery of government changes will be accepted for GST purposes. An example of a partially completed transaction is where an order is issued by the transferor entity and because of the machinery of government change, the goods or services are supplied to and paid for by the transferee agency; and the supplier issues a tax invoice that contains the details of the ordering entity as recipient.) Consider whether any of the required information on recipient-created tax invoices needs to be amended. (For some acquisitions eg grants, the transferee entity may not hold a valid tax invoice and therefore may issue a recipient created tax invoice to the supplier.) Reissue date: September

101 Reference Taxation Responsible Officer Completed GST manual sec GST manual sec 3.6.1, TI 25 clause AUSkey FAQ s on GST Manual sec 5.3 Consider the GST treatment of transferred assets and transferred leave entitlements between entities. Generally speaking, at the time the administrative restructure takes effect, the proclamation would operate to, amongst other things: transfer any property, assets, rights, debts, liabilities and obligations held by the transferor to the transferee agency. There are no GST consequences if assets and liabilities are transferred by way of gazettal. No taxable supplies are being made by the transferor agency. (Refer to ATO ID 2004/362 GST and the transfer of annual leave, annual leave loading, flexitime and sick leave entitlements; ATO ID 2003/1182 GST and the transfer of long service leave entitlements; and ATO ID 2002/1052 GST and reimbursement of salary. Generally, GST will not be included when the transferor entity makes a payment to the transferee entity in respect of annual leave, leave loading, long service leave, flexitime and sick leave.) Transferred functions and activities have been included in the transferee entity s Business Activity Statement (BAS) from the deemed date control effectively passes. Consider whether the entity needs to make changes to existing AUSkey s (digital certificates), cancel certificates, or to be issued new certificates from the Australian Taxation Office. Consider whether there is any impact on taxes, fees and charges from a Division 81 perspective. This will largely be due to changes in legislation imposing the fee or charge or a change in nature of the fee or charge. Agencies are required to re self-assess when the legislation (or subordinate legislation) that imposes the fee or charge changes; or a private sector entity starts to provide the same supply as the Government; or the nature of the fee changes; or the GST Act (in particular Division 81 or associated regulations) changes. Agencies can self-assess via using the template on the FMT secure website. Reissue date: September

102 Reference Taxation Responsible Officer Completed Fringe Benefits Tax FBT Manual, sec. 1.1, TI 25 clause Consider whether there is an impact on your existing ABN and FBT registration. (Example 1: If a unit that was individually nominated and included with Dept A is transferred to Dept B, Dept B will advise the Department of Treasury and Finance of the additional unit to include with Dept B s group. The unit can be included in Dept A s FBT return (where Dept A has the unit for the majority of the FBT year) or Dept B s return). Example 2: If new entities are formed after the cut off date of 21 May, the Department of Treasury and Finance will need to nominate the entity as an employer for FBT purposes and the responsibility for the FBT return preparation reverts to the Crown for all new entities until the following March. DTF requires advice by no later than 20 May. Example 3: If two or more entities amalgamate to form one entity ie the two entities cease to exist, their FBT registration is cancelled* and FBT returns would be prepared at the deemed date control has effectively passed. The Department of Treasury and Finance will need to nominate the entities as an employer for FBT purposes and the responsibility for the FBT return preparation reverts to the Crown for all new entities until the following March.) *Remember to tick the no further FBT return will be prepared box on the last FBT return FBT Manual sec.1.1 FBT Manual, sec. 1.2 FBT returns Register new entities or groups for FBT, where appropriate. Where a new registration is required, forward the entity s ABN, TFN and notional tax amount for the coming FBT year to the Department of Treasury and Finance. (To enable a new entity to lodge an FBT return, the Department of Treasury and Finance needs to nominate your entity as an employer for FBT purposes and requires advice before 20 May.) Where required, a request for an extension to lodge the FBT return (as a result of a restructure) has been made in writing and this has been received by the ATO before Reissue date: September

103 Reference Taxation Responsible Officer Completed 20 May. The following information has been included in the request for an extension: employer details (name, address, TFN); details of the circumstances that prevent the FBT return being lodged by the due date; proposed lodgement date; and contact details. FBT Assessment Act 1986, sec.135x Consider benefits provided to employees and associates and the relevant record keeping requirements for this transitional event. Record keeping examples include car log books, car parking registers and reoccurring fringe benefit declarations. Where required, advise the Department of Treasury and Finance for inclusion in the sec. 135X agreement. FBT Manual, sec. 1.7 Payment summaries (Where the Department of Treasury and Finance has nominated an entity as a new employer, there is a variation to the current nomination, the nomination is revoked or the nominated entity ceases to exist, this may affect the calculation of the taxable value of certain fringe benefits, or change the character of certain benefits. Section 135X of the Fringe Benefits Tax Assessment Act 1986 enables the Commissioner to enter into a written agreement with a State or Territory to: ensure the calculation of the taxable value of certain fringe benefits is not affected as a result of a break in the continuity of certain record keeping requirements solely because of a transitional event, and preserve the character of certain benefits where the character would otherwise be lost solely because of a transitional event.) Payment Summaries Consider reportable fringe benefit amounts disclosed on payment summaries for transferred employees. (An employee will have a reportable fringe benefit amount in relation to each employer; therefore, where an employee has more than one employer, the employee is entitled to two separate $2,000 reportable fringe benefit thresholds (eg one for the transferor entity and Reissue date: September

104 Reference Taxation Responsible Officer Completed another for the transferee entity.) NAT Consider reportable superannuation contribution amounts required to be disclosed on payment summaries for transferred employees. Salary Sacrifice Service Providers Consider notification requirements to providers for transferred employees. TI 25 clause 25.9 Private Tax Rulings Obtain a copy of the register of private tax rulings and copies of private tax rulings issued to the transferor entity that relate to units/functions transferred. Consider whether these private tax rulings can continue to be relied upon and/or whether private tax rulings are required in implementing machinery of government changes. Where required, all private taxation ruling applications are to be forwarded to the Department of Treasury and Finance for approval by the Under Treasurer prior to being lodged with the ATO. (Where a private tax ruling was originally issued to the transferor entity, this ruling may apply to the transferee entity if the material facts remain unchanged when the transferee takes over the functions. That is: - functions were transferred from transferor to transferee; - a government gazettal notice also moved the associated staff from transferor to transferee; - the functions undertaken remain unchanged; and - transferor has received a private ruling from the ATO in relation to these particular functions.) Reissue date: September

105 Reference Funding Responsible Officer Completed Budget/Forward estimates Determine and agree on the amount of appropriation that needs to be transferred and consider the budget and forward estimates, including: expenditure authority; revenue; assets and liabilities; cash balances; and administered items. It is important that there is agreement between the Transferor and Transferee entities. In addition, DTF account managers should be engaged early to agree the necessary adjustments and to assist to process the adjustment journals. Annual Appropriation Act sec. 5 The Department of Treasury and Finance has been notified of an adjustment to appropriation as a result of an administrative restructure/machinery of government changes. (The Treasurer may apply part or all of the appropriation to enable the responsible agency to carry out the transferred functions or duties). Where funding for Special Act payments is provided in arrears based on agency advice to DTF, ensure that both the transferee and transferor entity agree the scope and timing of the transfer and advise DTF so that payments can be monitored. PFA Act sec.13 Governor s approval has been sought to adjust the levels of appropriation between departments where necessary. Discuss with your DTF Budget branch account manager whether programs / sub-programs information will need to be updated and/or back cast to all years for presentation in the Budget Portfolio Statements. Reissue date: September

106 Reference Funding Responsible Officer Completed Obtain information relating to the transferred entities or transferred functions on: TI 25 clause 25.14, GST Manual sec. 5.1 programs, sub-programs and a financial break-down with reference to the budget portfolio statements; unspent funds at the date control passes via the Budget Monitoring System; any intra government transfers or other grants (receivable or payable) Consider the GST treatment of: funding transfers (eg appropriation from consolidated accounts, funds from the Governor s Appropriation Account, Commonwealth funds etc); reimbursement of expenditure made by one entity that is the responsibility of another entity; and collection of income that has to be transferred to the transferee entity because that entity is now responsible for the area that generates that income. (In general, all payments from the consolidated account to a government related entity s operating account will not be subject to GST. Where the transferee receives a transfer of appropriation (originally intended for the transferor), this payment will not generally be subject to GST, as the payment will not be for a supply. Where the transferor agency has claimed ITC in respect of goods and services and seeks only to recover the net amount for these goods and services from the transferee entity, this transaction will not generally be subject to GST, as there is no supply. Where revenue relates to activities undertaken prior to the restructure, the transferor entity should retain the income and remit GST to the ATO. Where revenue relates to activities undertaken after the restructure, the transferor entity should forward the income to the transferee entity. The transferee entity should remit GST on this income). Reissue date: September

107 Reference Funding Responsible Officer Completed Budget and Financial Management The budgets to be transferred from the transferor entity to the transferee entity should be agreed before the date of transfer. In the majority of cases this will be by way of sign offs by Chief Executives. Where budgets and appropriation have not been formally transferred prior to the date of transfer (as specified in Gazette), the transferee entity will spend money previously appropriated to the transferor entity (or otherwise held) for the purpose of funding the staff and functions transferred. Thus, the transferor entity is spending their currently approved appropriation and expenditure authority in performing what are not (from the date of transfer) its own functions. No delegation from the Chief Executive of the transferor entity is required. The transferee entity can proceed on the basis that in due course budgets will be transferred from the transferor entity to cover expenditures from the date of transfer. Budget transfers can occur through the intervention of the MoG Steering Committee if agreement has not been reached in a reasonable period of time. This will satisfy the requirements of TI 8 clause 8.7.2, whereby a Chief Executive needs to have a reasonable expectation that sufficient financial resources will be available to meet commitments as they fall due. For larger function transfers, which are not able to be managed within the existing appropriation and expenditure authority limits of the transferee entity, while budget transfers are being finalised, an interim transfer of appropriation and expenditure authority (base on a reasonable estimate of funds to be transferred) can be organised if necessary. This will require approval of the Treasurer under section 5 of the Appropriation Act. The transferee entity is the financial reporting entity from the date of transfer. Where the formal transfer of budgets has not occurred as at the date of transfer, the transferor entity should provide financial reports on the activities of the transferred functions to the transferee entity from the date of transfer to the time that budgets are actually transferred. This will enable the transferee entity to undertake continued financial management of the activities associated with the functions being Reissue date: September

108 Reference Funding Responsible Officer Completed transferred. There may be some lag in ensuring that payments etc are recorded against the transferee entity s special deposit account. In this instance the transferor entity should be capturing any costs associated with the transferred functions that are charged to its special deposit account from the date of transfer specified in the gazette, and in due course recharge those amounts to the transferee entity, such that all costs are reflected in the account of the transferee entity from that date. Reference Deposit Accounts and Banking Responsible Officer Completed TI 6 clause 6.5 to 6.8 Deposit accounts The Treasurer s approval has been sought where additional special deposit accounts or deposit accounts are required or where the purpose of a special deposit account needs to be amended. The appropriate policies and procedures have been updated for transferred functions/activities to ensure that the relevant special deposit account or deposit account is operated according to the approved purpose and any terms and conditions. Note: The transferor entity should continue to reconcile and advise DTF of the balance of deposit accounts until both the transferor and transferee entities agree on the transfer of responsibilities. DTF should be advised once an agreement has been reached, so that DTF can monitor and ensure correct reporting in the Treasurer s ledger. TI 6 Bank accounts Consider appropriateness of maintaining existing bank accounts. Do bank account names or department names/contact details need to be changed? Gazette notice to be provided to bank. Do authorities and/or signatories need to change? Reissue date: September

109 Reference Deposit Accounts and Banking Responsible Officer Completed Can bank accounts be rationalised? Opening new bank accounts refer to Treasurer s Instruction 6 May require changes to cheques and/or billing stationery liaise with banking/revenue collection suppliers. Review Transaction Negotiation Authority limits to determine whether current limits remain appropriate. Note: Where changes are required to bank account names, the entity should deal directly with the Bank. The Bank will require a copy of the Gazette advising of the changes and a new account authority to reflect any signatory changes recorded on the bank accounts. TI 4 clause 4.6 to 4.10 & 4.13 to 4.14 Establishment of merchant facilities Where the transferee entity does not have merchant facilities in place and the functions/activities transferred are currently using merchant facilities, or it may be an advantage to establish merchant facilities, the following shall be considered: an analysis of the costs and benefits of establishing a merchant facility; the economic or other advantage to the Government of establishing a merchant facility; establishing and maintaining appropriate systems, controls, processes and procedures for the operation and security of the merchant facility; appropriate approvals and delegations are sought; the Treasurer s approval is sought for the acceptance of payments credited to the Consolidated Account eg taxation, fines, licences; and establishing and maintaining appropriate policies and procedures to ensure compliance with the terms of any agreement for the provision of whole of government services. Reissue date: September

110 Reference Deposit Accounts and Banking Responsible Officer Completed Government Purchase Cards Where transferred personnel require purchase cards, ensure: purchase cards are only issued to SA Government employees; TI 12 clause & you liaise with ANZ to request a new card; only one purchase card is issued to an approved cardholder (must be approved by the Chief Executive or delegate prior to the purchase card being issued to the relevant cardholder); each cardholder signs an agreement and acknowledgment by cardholder (substantially in the form of Schedule 1 to TI 12) and appropriate records are maintained for financial management purposes; each cardholder s individual transaction limit is the lower of the cardholder s contract delegation or $10,000; and personnel have appropriate authorisation to use a purchase card. That is the transferee entity has established necessary authorisations as per TI 8 and TI 12 for the personnel transferred to it, effective from the date of transfer as specified in the gazettal. Note that a CarsonWagonLit virtual travel card issued via the whole of government purchase card arrangement is not a purchase card for the purposes of TI 12. Stored Value Cards TI 12 clause Where stored value cards are used by a transferred function, ensure: the responsibility for the distribution, use and management of stored value cards is documented and assigned to appropriate senior officers; stored value cards are only distributed for official purposes; and appropriate arrangements are in place to ensure the CE is informed on all relevant stored value card compliance and governance matters. Reissue date: September

111 Reference Deposit Accounts and Banking Responsible Officer Completed SAFA requirements For transferred functions, where required: Advise SAFA of any change to bank account details and standard settlement instructions. Provide SAFA with a new list of authorised officers, contacts and reporting arrangements. Establish new Client Service agreements where needed (enables new entities to borrow from SAFA). Liaise with SAFA on the mechanics of administrative changes impacting on investments or derivative transactions. Resolve debt arrangements with SAFA (i.e. a combination of borrowings from SAFA and through Treasurer; all through the Treasurer; or all from SAFA). (Note: The Treasurer has mandated the following services be provided by SAFA to public sector agencies: fundraising/public sector borrowings, leasing, debt management, debt advise, cash/liquidity management and foreign exchange hedging). Insurance Review the agreement between SAFA and the entity for insurance coverage. As a general rule, the existing agreement will still cover the cited business units until the end of the respective financial year. It is recommended that the transferee entity contact SAFA s insurance division for further information. Reissue date: September

112 Reference Other matters Financial and Contractual Responsible Officer Completed TI 5 clause, 5.20 & 5.25 Debt recovery and write offs For transferred functions: obtain a copy of all documented recovery action for doubtful debts (this documentation is retained in accordance with the State Records General Disposal Schedule); obtain a copy of the transferor entity s debts written off and/or waived register; and where appropriate, seek approval to write debts off (where the transferor entity has not done so). TI 8 clause Financial authorisations Where appropriate, establish contract, payment and procurement authorisations for transferred personnel and update the delegations of authority register. These authorisations are to be effective from the date of transfer, as specified in the gazettal, to permit decision making in relation to the transferred functions. Other delegations Review other delegations, e.g. Human Resources, TI 2, TI 5, operating procedures etc to ensure they are appropriate. These authorisations are to be effective from the date of transfer, as specified in the gazettal, to permit decision making in relation to the transferred functions. TI 2 clause 2.14 Unclaimed Money Obtain a copy of the unclaimed money register relevant to the function being transferred. TI 20 clause Guarantees and indemnities Obtain a copy of the register of guarantees/indemnities entered into pursuant to any Act of Parliament, from the transferor entity (where such a register exists). Reissue date: September

113 Reference Other matters Financial and Contractual Responsible Officer Completed TI 23 clause 23.5 Management of foreign currency exposures All foreign currency risks and exposures arising from the transferor s operations, including any that are contemplated, have been recognised and are managed. Contracts Obtain a copy of the contracts register that relates to the transferred functions. Review major contracts transferring to the entity to check ability to assign the contract. In addition, consider the wording of the contract ie is it worded in general terms and therefore does not require any formal change? If in doubt, liaise with Crown Solicitor s Office. Consider whether any new seals are required. Consider the impact upon existing Service Level Agreements or whether new Service Level Agreements need to be prepared. (Note: Major contracts should may be able to be transferred by a proclamation under the Administrative Arrangements Act 1994). Government Guarantee Fee Liaise with SAFA and the transferor entity regarding the payment of any Government Guarantee fee (will it be split or will it remain with transferor entity) and the transferring of any debt. Contractor Staff Consider contractual staff arrangements on transfer of functions: the need for contractors going forward (based on the workload and surplus Public Sector Act 2009 staff that might be utilised in the first instance). ascertain if transferred contractors wish to work under the revised arrangements. Reissue date: September

114 Reference Other matters Financial and Contractual Responsible Officer Completed where appropriate, re-engage contractors from transferred entity/function. Register of Lost or Stolen Public Money and Property TI 2 clause 2.13 Obtain a copy of the register, relevant for the functions being transferred, of public money (in excess of $1,000) and public property (with a value in excess of $10,000) that has been lost or stolen. Financial Management Compliance Program TI 28 clause Obtain a copy of the Financial Management Compliance Program for those functions that have been transferred. Reference Other Matters - Employees Responsible Officer Completed Public Sector Act 2009, sec 26 and 9 Gazette/agreement Arrange for the transferred Public Sector Act staff to be published in the Government Gazette. A copy of the gazettal is to be retained; forwarded to the Financial Management Team (Public Finance branch) and to the transferee entity. TI 25 clause Where a Chief Executive has agreed with another Chief Executive to transfer employees between two public authorities (under s9(3) of the Public Sector Act), advise the Under Treasurer and Chief Executive of the Department of the Premier and Cabinet. The advice must include: details of the public authorities involved; the date the employees/function transferred; the nature of the transfer of employees/function; the number of employees transferred; and Reissue date: September

115 Reference Other Matters - Employees Responsible Officer Completed any budget impacts Determination of leave entitlements For transferred employees appointed pursuant to the Public Sector Act, obtain from the transferor entity full details of the employees service (including details of any part-time or casual service and flexible working arrangements such as purchased leave or working from home), accrued leave entitlements, and leave taken (including periods of leave without pay not counted as service for the purposes of long service leave by the transferor entity) before service with the entity can be recognised, or leave entitlements calculated and transferred. Determinations 3.1 Employment Conditions - Leave, page 68 APF IV Para 5.31 (Note the requirements of Determinations 3.1 Employment Conditions - Leave: in relation to the determinations of Leave Entitlements). Assignment or appointment to a Public Sector Act position Determinations3.1 Employment Conditions - Leave, page 69 Where a Public Sector Act employee is assigned or appointed to a Public Sector Act position in another administrative unit: transfer to and make available any existing leave entitlements to the employee in the new administrative unit (applies to both temporary and long-term movements). TI 9 clause & Payroll deductions For each person transferred, ensure that: the transferor entity has provided all payroll deduction authorities; or a statement of normal deductions for the employee s salary or wages signed by an authorised officer. payroll deductions are remitted only to organisations included on the transferee s approved list of organisations, otherwise additional authorisation is required. Reissue date: September

116 Reference Other Matters - Employees Responsible Officer Completed Determinations 3.1 Employment Conditions - Leave, page 15 Recreation leave Where a transferred employee has received a payment in lieu of recreation leave entitlements from their previous employer, ensure those entitlements are no longer available to the employee. Long service leave For a transferred employee whose service is continuous and there have not been any periods not counted as service for long service leave by the previous employer, record the date of commencement with the earliest employer as the date of entry. Determinations 3.1 Employment Conditions - Leave, page 20 Record the period of effective service with the transferor entity, together with details of when this effective service occurred (for taxation purposes). Ensure entitlements are no longer available to an employee where a transferred employee has received a payment in lieu of long service leave entitlements from their previous employer, although the service will be recognised as effective service for the purposes of accruing future entitlements. Determinations 3.1 Employment Conditions - Leave, page 67 Recognition of service from 1/11/2002 onwards Recognise as effective service, prior service of new employees with administrative units or other South Australian Public Sector organisations which have negotiated reciprocal arrangements for the recognition and transfer of leave entitlements under Regulation 11 of the Public Sector Act, subject to the requirements of this Standard. This includes prior service with the same administrative unit or Regulation 11 organisation. Recognise prior service as effective service where provided under South Australian legislation (e.g. employees transferred under the Electricity Corporation (Restructuring and Disposal) Act 1999). APF IV para APS 5.29 and APS 5.30 Prepare employee benefit journal entries For transferred personnel, recognise any transferred employee benefit liabilities and record an expense equivalent to the liabilities transferred. Where the transferor entity has transferred money, record the increase in assets (cash) and the transferred employee benefit liabilities. To the extent that the payment is less than the liability assumed, recognise an expense equal to the amount of the shortfall. Reissue date: September

117 Reference Other Matters - Employees Responsible Officer Completed OHS&W / Worker s Compensation Consider any reporting and compliance implications for occupational health, safety and welfare and any worker s compensation issues (e.g. transfer of Workcover SA claims, preparation of returns, advising of entity name changes etc). General Induct and communicate to transferred employees, the transferee entity s internal policies (i.e. financial and non-financial policies). Reference Other Matters - Information Responsible Officer Completed Consider the effect of the restructure on the entity s Strategic Plan and Business Plan (and the link to the State Strategic plan). DPC Circular 13, section 4.1 Annual Report Requirements The annual report includes details of the administrative restructures/machinery of government changes. Advise relevant parties of any administrative changes, e.g. customers, suppliers, Commonwealth, State and local government agencies: changes in trading names, mailing address, contact officers (names and numbers). new bank account details for grants money, contacts and reporting arrangements. Legislation For entities established under specific legislation, the Public Corporations Act 1993 or Corporations Act 2001, consider legislation impacts and/or liaise with Crown Law, for example: Reissue date: September

118 Reference Other Matters - Information Responsible Officer Completed A proclamation under the Administrative Arrangements Act 1994 is required to transfer the acts administered from one Minister to another. No other action would be required unless the act that established an entity required a change. A change to an entity established under the Public Corporations Act 1993 may require an amendment to the Act s regulations. For an entity established under the Corporations Act 2001, the constitution and structure of the board needs to be reviewed for any change. If there is a change, then the reporting requirements of the Australian Securities and Investment Commission need to be considered. Where entities are existing and declared semi-government authority, consider whether the entity is still the same legal body under its new relevant legislation. If not, the entity will need to be considered for proclamation as a semi-government authority under the Government Financing Authority Act 1982 and Public Finance and Audit Act Review legislative and other machinery of government changes on Board appointments (e.g. termination of appointments, altering term of appointments) Electronic information Advise the entity responsible for the Intra SA website of any information changes disclosure, e.g. contact details, procedures, contract disclosures etc. Consider the impact on the entity s external and internal websites, e.g. redirection to a new site, contact details, transfer of documents/information. Liaise with the Chief Information Officer to discuss: the responsibility for the backup of transferred systems; and examining the Corporate Recovery Plan to determine the impact and relevancy of the plan in relation to the new structure of the entity Reissue date: September

119 Reference Other Matters - Information Responsible Officer Completed Statutory records Assess the need for a new Records Disposal Schedule (RDS) Consider impact upon the entity s Freedom of Information status as the status may change upon restructure. Reissue date: September

120 ADMINISTRATIVE RESTRUCTURE CHECKLIST FOR THE TRANSFEROR ENTITY This checklist/guidance is primarily aimed at administrative units established under the Public Sector Act 2009 but may also assist statutory authorities in the implementation of administrative restructure/machinery of government changes. This checklist is illustrative and is not exhaustive. A transferor entity is an entity that transfers a part of or full function/activity to another entity. The checklist is structured via the following main headings: External financial reporting Internal financial reporting Taxation Funding Deposit accounts and banking Other matters such as contractual matters; employees; and other information requirements. Reference External Financial Reporting Responsible Officer Completed Public Sector Act 2009 sec 26 & 9 APF II para APS 5.8 & APS 5.10 Obtain a copy of the proclamation made by the Governor or notice made by the Premier (published in the Government Gazette) or agreement between Chief Executives. Determine the date control effectively passes, i.e. where functions are transferred between entities. (The deemed date in the Government Gazette shall be recorded as the date that control passes. This is usually the first day of the following month. If no date is deemed in the Government Gazette, the date will be that of the Gazette. In the unusual event that there is clear evidence that control passed on a date other than the dates specified above and where adoption of the dates specified would result in a material misstatement of financial performance or position - the date of transfer shall be the date control actually passed.) Reissue date: September

121 PFA Act, TI 19 and APF II para APS 5.8 APF II para APS 5.12 Prepare financial statements/reports for functions that are transferred between entities. (For practical purposes, where control has passed on a date other than month end, the financial reporting date is the nearest end of month date, adjusted for any material transactions that may have occurred in the time between the Gazette date and the nearest end of month date.) Where an entity is abolished, the Chief Executive of the transferee entity acquiring the majority value of net assets from the abolished entity will prepare the financial statements/report of the abolished entity for its final reporting period. The transferee entity shall comply with section 23 of the Public Finance and Audit Act 1987 in respect of the certification and audit of the financial statements of the abolished entity. Note where an entity is abolished, entities are encouraged to prepare financial statements as early as practicable after the date that the entity ceases to exist. TI 19, APF II para APS 5.11 Prepare financial statements/reports, for entities that are abolished. (Where an entity is abolished, the final reporting date for financial reporting shall be: the gazettal date, for a department or public corporation; the date of deregistration, for a Corporations Law company; or the date of repeal of the enabling legislation (or such other date that may be prescribed), for a statutory authority). APF II para APS 5.13 TI 19 clause Where the Chief Executive and/or the officer responsible for financial administration of the abolished entity no longer hold employment in the SA Government, then the next most senior officer still in government of that abolished department will certify the accounts. Reconcile financial statements/reports prepared with relevant accounting records maintained by the Treasurer. Reissue date: September

122 APF II para APS 3.4, 5.2 & 5.4 TI 3, Cash Alignment Policy The transferor entity s general purpose financial statements will reflect the: a contribution by owners in the Statement of Changes in Equity where net liabilities are transferred; or a distribution to owners in the Statement of Changes in Equity where net assets are transferred. Consider the cash balances in the bank accounts, deposit account/special deposit account, Accrual Appropriation Account and the Surplus Working Cash Account and any amounts that may need to be transferred. APF II para APS PFA Act sec 23(1), TI 19 clause 19.8 Include in the notes accompanying the transferor entity s general purpose financial statements: a brief statement of functions transferred; the entity or entities to which they were transferred; the assets transferred and liabilities forgone as a result of a restructure of administrative arrangements during the reporting period by class; the date of effective transfer and any assumptions made as to the transfer date; and the authority for the transfer e.g. Cabinet, Government Gazette. Provide financial statements to the Auditor-General within 42 days of the end of the reporting period where reporting entities are dissolved and/or transferred functions are significant/material. TI 19 clause to Forward to the transferee entity the financial statements/reports and associated schedules/registers, eg debts written off; contingent assets/liabilities; guarantees and indemnities, relevant non-current asset records (such as stocktake and valuation details) etc. Provide all information requested by the Minister, Treasurer, Under Treasurer or authorised delegate relating to the restructure, in a timely manner and on such a basis as directed. Reissue date: September

123 Reference Internal Financial Reporting Responsible Officer Completed Forward to the transferee entity a comprehensive chart of accounts listing and consider the impact of the administrative restructure on chart of accounts mappings/upstream codes. Provide the transferee entity with details of specific internal reporting requirements relating to the transferred functions. Discuss with the appropriate DTF staff to assess whether any adjustments are required to the following areas: Monthly financial monitoring budget (including profiles) and actuals (Budget branch) Capital, budget initiative and consultancy monitoring returns (Budget branch) Mid-year review, budget and carryover request returns (Budget branch) Mapping for end of year actual results (Public Finance branch) Where applicable, provide to the transferee entity a list / register of any items being investigated for fraud. Liaise with the transferee entity to agree on cut off dates for transaction processing, e.g. accounts payable, accounts receivable, payroll. Ideally this date will be as close as possible to the date control passes. Liaise with the transferee entity regarding corporate account bills that will require transfer (e.g. mobile phone accounts, cab charge vouchers, accommodation charges) and for information on any other expenses such as IT and payroll processing. Reissue date: September

124 Reference Taxation Responsible Officer Completed NAT Advise, in writing, the Department of Treasury and Finance, Australian Taxation Office and Revenue SA of changes to authorised contact officers for taxation matters (names, phone numbers, and mailing addresses). (Note: The Privacy Act 1988 protects the privacy of information. It is an offence for a tax officer to give information to anyone other than the authorised contact officer). TI 22 clause 22.8 TI 25 clause PAYG Manual, sec 8.4 PAYG and administrative restructures GST Manual sec. 3 to Tax equivalent payments Ensure any tax equivalent payments (where required) have been paid to the Treasurer. Provide a copy of the current year s returns and supporting documentation to the transferee entity. Payroll tax All personnel transferred have been excluded from the transferor entity s payroll tax return from the deemed date that control effectively passes. The payroll tax return has been lodged with the Commissioner of State Taxation within seven days of the end of the tax period. Pay As You Go Tax Consider whether Tax File Number Declaration Forms are required for all transferred employees. Consider whether there is an impact on existing PAYG registrations. Goods and Services Tax Consider whether there is an impact on your existing ABN and GST registration and grouping. (Example 1: If a unit that was individually registered and grouped with Dept A is transferred to Dept B, Dept A will advise the ATO of the removal of the unit from the Dept A group. Reissue date: September

125 Reference Taxation Responsible Officer Completed Example 2: If one entity is split into two, the simplest registration arrangement is to transfer the ABN of the existing entity to one of the new entities and separately register the other entity. Example 3: If two or more existing entities amalgamate to form one entity ie the two entities cease to exist, their GST registrations would be cancelled* and the new entity would be separately registered.) *Completed cancellation forms (Nat 2955) should be forwarded to the Department of Treasury and Finance. GST Manual sec & GST Manual sec GST Manual sec Where there is a change in formation of a GST group, the representative member is to notify the formation of the Commissioner in the approved form on or before the day by which the entities are required the Commissioner their BAS for the tax period in which the formation takes place. Cancel GST registrations, where appropriate. Where a registration is cancelled forward copies of the cancellation forms and all supporting documents to the Department of Treasury and Finance. Upon cancellation of registration, your entity will need to make adjustments for input tax credits claimed on assets taken outside the GST system. Consider whether any of the required information on issued tax invoices needs to be amended. (Tax invoices must have sufficient information to determine the supplier s identity and ABN. Any machinery of government change that involves an entity being abolished, created, having its name changed or a part or division being transferred will generally require changes to be made to tax invoices. The SA Government has a three month period during which tax invoices showing incorrect details as a result of machinery of government changes will be accepted for GST purposes.) Reissue date: September

126 Reference Taxation Responsible Officer Completed GST Manual sec Private Taxation Ruling Advise your suppliers of recipient changes to be made to tax invoices. (To be able to claim ITC, the entity needs to hold a valid tax invoice at the time it lodges its BAS. If the value of goods or services to which the tax invoice relates is $1,000 or more, the supplier is required to show sufficient information to determine the recipient s identity or ABN. If the machinery of govt change impacts on any of these then the supplier needs to be advised.) Develop a mechanism to ensure all partially completed transactions are finalised within three months. (The SA Government has a three month period during which tax invoices showing incorrect details as a result of MOG changes will be accepted for GST purposes. An example of a partially completed transaction is where an order is issued by the transferor entity and because of machinery of government changes, the goods or services are supplied to and paid for by the transferee agency; and the supplier issues a tax invoice that contains the details of the ordering entity as recipient.) GST manual sec Consider whether any of the required information on recipient-created tax invoices need to be amended. (For some acquisitions eg grants, the entity may not hold a valid tax invoice and therefore may issue a recipient-created tax invoice to the supplier. The ATO has issued a private ruling to the SA Government that allows only a three month period during which recipient created tax invoices showing incorrect details as a result of MOG changes will be accepted for GST purposes) Reissue date: September

127 Reference Taxation Responsible Officer Completed GST manual sec Consider the GST treatment of transferred assets and leave entitlements between entities. Generally speaking, at the time the administrative restructure takes effect, the proclamation would operate to, amongst other things: transfer any property, assets, rights, debts, liabilities and obligations to the transferee agency. There are no GST consequences if assets and liabilities are transferred by way of gazettal. No taxable supplies are made by the transferor agency. (Refer to ATO ID 2004/362 GST and the transfer of annual leave, annual leave loading, flexitime and sick leave entitlements; ATO ID 2003/1182 GST and the transfer of long service leave entitlements; and ATO ID 2002/1052 GST and reimbursement of salary. Generally, GST will not be included when the transferor entity makes a payment to the transferee entity in respect of annual leave, leave loading, long service leave, flexitime and sick leave.) GST manual sec , TI 25 clause Transferred functions and activities have been excluded from the Business Activity Statement (BAS) from the deemed date control effectively passes. (Ensure the GST debt for transferred units/functions is determined at the date control passes ). AUSkey FAQ a on Consider whether the entity needs to make changes to existing AUSkey s (digital certificates), cancel certificates, or to be issued new certificates from the Australian Taxation Office. GST Manual sec 5.3 Consider whether there is any impact on taxes, fees and charges from a Division 81 perspective. This will largely be due to changes in legislation imposing the fee or charge or a change in nature of the fee or charge. Agencies are required to re self-assess when the legislation (or subordinate legislation) that imposes the fee or charge changes; or a private sector entity starts to provide the same supply as the Government; or the nature of the fee changes; or the GST Act (in particular Reissue date: September

128 Reference Taxation Responsible Officer Completed Division 81 or associated regulations) changes. Agencies can self-assess via using the template on the FMT secure website. Fringe Benefits Tax FBT Manual, sec. 1.1 and TI 25 clause Consider whether there is an impact on your existing ABN and FBT registration. (Example 1: If a unit that was individually nominated and included with Dept A is transferred to Dept B, Dept A will advise the Department of Treasury and Finance of the removal of the unit from Dept A. The unit can be included in Dept A s FBT return (where Dept A has the unit for the majority of the FBT year) or Dept B s return). Example 2: If new entities are formed after the cut off date of 21 May, the Department of Treasury and Finance will need to nominate the entity as an employer for FBT purposes and the responsibility for the FBT return preparation reverts to the Crown for all new entities until the following March. Example 3: If two or more entities amalgamate to form one entity ie the two entities cease to exist, their FBT registration is cancelled* and FBT returns would be prepared at the deemed date control has effectively passed. The Department of Treasury and Finance will need to nominate the entities as an employer for FBT purposes and the responsibility for the FBT return preparation reverts to the Crown for all new entities until the following March.) *remember to tick the no further FBT return will be prepared box on last FBT return. FBT Manual sec 1.1 FBT Manual sec 7.3 Register new entities or groups for FBT, where appropriate. Where a new registration is required, forward the entity s ABN, TFN and notional tax amount for the coming FBT year to the Department of Treasury and Finance. (To enable a new entity to lodge an FBT return, the Department of Treasury and Finance needs to nominate your entity as an employer for FBT purposes. DTF requires advice before 20 May.) Cancel FBT registrations, where appropriate. Where a registration is cancelled, forward copies of the forms and all supporting documents to the Department of Treasury and Reissue date: September

129 Reference Taxation Responsible Officer Completed Finance. Prepare the final FBT return. FBT Manual, sec. 1.2 FBT returns Where required, a request for an extension to lodge the FBT return (as a result of a restructure) has been made in writing and this has been received by the ATO before 20 May. The following information has been included in the request for an extension: employer details (name, address, TFN); details of the circumstances that prevent the FBT return being lodged by the due date; proposed lodgement date; and Contact details. FBT Assessment Act 1986, sec.135x Consider benefits provided to employees and associates and the relevant record keeping requirements for this transitional event. Record keeping examples include car log books, car parking registers, and reoccurring fringe benefit declarations. Where required, advise the Department of Treasury and Finance for inclusion in the sec.135x agreement. (Where DTF has nominated an entity as a new employer, there is a variation to the current nomination, the nomination is revoked or the nominated entity ceases to exist, this may affect the calculation of the taxable value of certain fringe benefits, or change the character of certain benefits. Section 135X of the FBTA Act enables the Commissioner to enter into a written agreement with a State or Territory to: ensure the calculation of the taxable value of certain fringe benefits is not affected as a result of a break in the continuity of certain record keeping requirements solely because of a transitional event, and preserve the character of certain benefits where the character would otherwise be lost solely because of a transitional event.) Reissue date: September

130 Reference Taxation Responsible Officer Completed FBT Manual, sec. 1.7 Payment summaries Payment Summaries Consider when payment summaries are to be issued for employees transferred and the reportable fringe benefit amounts to be disclosed on these payment summaries. (An employee will have a reportable fringe benefit amount in relation to each employer; therefore, where an employee has more than one employer, the employee is entitled to two separate $2,000 reportable fringe benefit thresholds (eg one for the transferor entity and another for the transferee entity.) NAT Consider reportable superannuation contribution amounts required to be disclosed on payment summaries for transferred employees. Salary Sacrifice Service Providers Consider notification requirements to providers for transferred employees. TI 25 clause 25.9 Private taxation rulings Forward a copy of the register of private tax rulings and copies of private tax rulings that relate to units/functions transferred to the transferee entity. (Where a private tax ruling was originally issued to the transferor entity, this ruling may apply to the transferee entity if the material facts remain unchanged when the transferee takes over the functions. That is: functions were transferred from transferor to transferee; a government gazettal notice also moved the associated staff from transferor to transferee; the functions undertaken remain unchanged; and transferor has received a private ruling from the ATO in relation to these particular functions.) Reissue date: September

131 Reference Funding Responsible Officer Completed Annual Appropriation Act sec. 5 Budget/Forward estimates Determine and agree on the amount of appropriation that needs to be transferred and consider the budget and forward estimates, including: expenditure authority; revenue; assets and liabilities; cash balances; and administered items. It is important that there is agreement between the Transferor and Transferee entities. In addition, DTF account managers should be engaged early to agree the necessary adjustments and to assist to process the adjustment journals. Notify the Department of Treasury and Finance of an adjustment to appropriation as a result of an administrative restructure/machinery of government changes. (The Treasurer may apply part or all of the appropriation to enable the responsible agency to carry out the transferred functions or duties). Where funding for Special Act payments is provided in arrears based on agency advice to DTF, ensure that both the transferee and transferor entity agree the scope and timing of the transfer and advise DTF so that payments can be monitored. PFA Act sec. 13 The Governor s approval has been sought to adjust the levels of appropriation between departments where necessary. Discuss with your DTF Budget branch account manager whether programs / sub-programs information will need to be updated and/or back cast to all years for presentation in the Budget Portfolio Statements. Reissue date: September

132 Reference Funding Responsible Officer Completed Forward information relating to the transferred entities or transferred functions on: programs, sub-programs and a financial break-down with reference to the budget portfolio statements; unspent funds at the date of transfer via the Budget Monitoring System; any intra government transfers or other grants (receivable or payable) TI 25 GST Manual sec. 5.1 Consider the GST treatment of: funding transfers (eg appropriation from consolidated account, funds from the Governor s Appropriation account, Commonwealth funds etc); reimbursement of expenditure made by one entity that is the responsibility of another entity; and collection of income that has to be transferred to the transferee entity because that entity is now responsible for the area that generates that income. (In general, all payments from the consolidated account to a government related entity s operating account will not be subject to GST. Where the transferee receives a transfer of appropriation (originally intended for the transferor), this payment will not generally be subject to GST, as the payment will not be for a supply. Where the transferor agency has claimed ITC in respect of goods and services and seeks only to recover the net amount for these goods and services from the transferee entity, this transaction will not generally be subject to GST, as there is no supply. Where revenue relates to activities undertaken prior to the restructure, the transferor entity should retain the income and remit GST to the ATO. Where revenue relates to activities undertaken after the restructure, the transferor entity should forward the income to the transferee entity. The transferee entity should remit GST on this income.) Reissue date: September

133 Reference Funding Responsible Officer Completed Budget and Financial Management The budgets to be transferred from the transferor entity to the transferee entity should be agreed before the date of transfer. In the majority of cases this will be by way of sign offs by Chief Executives. Where budgets and appropriation have not been formally transferred prior to the date of transfer (as specified in Gazette), the transferee entity will spend money previously appropriated to the transferor entity (or otherwise held) for the purpose of funding the staff and functions transferred. Thus, the transferor entity is spending their currently approved appropriation and expenditure authority in performing what are not (from the date of transfer) its own functions. No delegation from the Chief Executive of the transferor entity is required. The transferee entity can proceed on the basis that in due course budgets will be transferred from the transferor entity to cover expenditures from the date of transfer. Budget transfers can occur through the intervention of the MoG Steering Committee if agreement has not been reached in a reasonable period of time. This will satisfy the requirements of TI 8 clause 8.7.2, whereby a Chief Executive needs to have a reasonable expectation that sufficient financial resources will be available to meet commitments as they fall due. For larger function transfers, which are not able to be managed within the existing appropriation and expenditure authority limits of the transferee entity, while budget transfers are being finalised, an interim transfer of appropriation and expenditure authority (base on a reasonable estimate of funds to be transferred) can be organised if necessary. This will require approval of the Treasurer under section 5 of the Appropriation Act. The transferee entity is the financial reporting entity from the date of transfer. Where the formal transfer of budgets has not occurred as at the date of transfer, the transferor entity should provide financial reports on the activities of the transferred functions to the transferee entity from the date of transfer to the time that budgets are actually transferred. This will enable the transferee entity to undertake continued financial management of the activities associated with the functions being Reissue date: September

134 Reference Funding Responsible Officer Completed transferred. There may be some lag in ensuring that payments etc are recorded against the transferee entity s special deposit account. In this instance the transferor entity should be capturing any costs associated with the transferred functions that are charged to its special deposit account from the date of transfer specified in the gazette, and in due course recharge those amounts to the transferee entity, such that all costs are reflected in the account of the transferee entity from that date. Reference Deposit Accounts and Banking Responsible Officer Completed TI 6 clause 6.12 to 6.13 Bank accounts Review bank accounts to determine whether accounts are still required. Where required close bank accounts. Bank accounts should be closed once all transactions on those accounts have been completed or the agency has established alternative arrangements with the bank, eg regarding outstanding cheques and any potential electronic transactions. Ensure records and periodic transactions are updated for re-used bank details. Amend/cancel Transaction Negotiation Authority limits. Review signatories/authorities. Note: Where changes are required to bank account names, the entity should deal directly with the Bank. The Bank will require a copy of the Gazette advising of the changes and a new account authority to reflect any signatory changes recorded on the bank accounts. TI 6 Deposit accounts Determine whether any deposit accounts should be closed. Write to the Department of Treasury and Finance to request closure of the deposit account. The funds in the deposit Reissue date: September

135 Reference Funding Responsible Officer Completed account are to be transferred to the appropriate account. Ensure the transferor entity s bank accounts are reconciled at the date control passes and the transferred functions portion is also reconciled and correctly identified. Note: The transferor entity should continue to reconcile and advise DTF of the balance of deposit accounts until both the transferor and transferee entities agree on the transfer of responsibilities. DTF should be advised once an agreement has been reached, so that DTF can monitor and ensure correct reporting in the Treasurer s ledger. TI 4 Merchant facilities Where the transferor entity has merchant facilities in place, determine whether the merchant facilities are to be closed or transferred to the transferee entity. Government purchase cards TI 12, Schedule 1 Ensure personnel transferring to the transferee entity have returned all purchase cards for cancellation (to the appropriate Card Administrator) and all purchase cards have been cancelled. Ensure direct debits on cancelled cards have been cancelled. An agency will normally require written advice to cancel the direct debit. Ensure all outstanding amounts on Government purchase cards are fully reconciled with relevant receipts prior to transfer. TI 12 clause Stored value cards Where stored value cards are used by a transferred entity, ensure: personnel transferring have returned all stored value cards to the appropriate card administrator. that where cards are to be transferred, provide the transferee entity with information on all relevant stored value card compliance and governance matters, and all supporting documentation and registers to manage the use, distribution and management of the Reissue date: September

136 Reference Funding Responsible Officer Completed stored cards. revoke/cancel stored value card authorisations for transferred employees and update the delegation register. SAFA requirements For transferred functions, where required: Advise SAFA of any change to bank account details and standard settlement instructions. Provide SAFA with a new list of authorised officers, contacts and reporting arrangements. Establish new Client Service agreements where needed (enables new entities to borrow from SAFA). Liaise with SAFA on the mechanics of administrative changes impacting on investments or derivative transactions. Resolve debt arrangements with SAFA (i.e. a combination of borrowings from SAFA and through Treasurer; all through the Treasurer; or all from SAFA). (Note: The Treasurer has mandated the following services be provided by SAFA to public sector agencies: fundraising/public sector borrowings, leasing, debt management, debt advice, cash/liquidity management and foreign exchange hedging). Petty Cash Ensure petty cash floats are reconciled and returned to the custodian prior to the transfer. Reissue date: September

137 Reference Other matters Financial and Contractual Responsible Officer Completed TI 5 clause 5.13, 5.20 and 5.25 Debt recovery and write offs For transferred functions: consider debts that may need to be written off and/or waived; where relevant, obtain the appropriate approvals to write off and/or waive debts before transferring functions to the transferee entity; forward a copy of all recovery action documented (for doubtful debts) to the transferee entity in accordance with TI 5; forward a copy of all debts written off and/or waived that have been recorded in a register in accordance with TI 5. TI 8 clause , Financial authorisations Revoke/cancel all contract and payment authorisations for transferred employees and update the delegation register. For remaining employees, review delegations that may relate to functions/activities no longer part of the transferor entity. Review other delegations, e.g. Human Resources, TI 2, TI 5, operating procedures etc, to ensure they are appropriate. Note, these cancelled authorisations are to be effective from the date of transfer, as specified in the gazettal. TI 2 clause 2.14 Unclaimed moneys Seek a direction from the Treasurer in relation to the disposition of any unclaimed monies held at the date of abolition, amalgamation or restructure. Provide a copy of the unclaimed money register relevant to the function being transferred. Reissue date: September

138 Reference Other matters Financial and Contractual Responsible Officer Completed TI 20 clause TI 23 clause 23.5 Guarantees and indemnities Provide the transferee entity with the relevant parts of the register of guarantees and indemnities (where such a register exists). Management of foreign currency exposures Advise the transferee entity of all foreign currency risks and exposures arising from the transferred operations, including any that are contemplated. Contracts Review major contracts (should be on contract register) that may be assigned to a new entity to check that the contract can be assigned and what notice of the charge, if any, needs to be given to the other party. If in doubt, liaise with the Crown Solicitor s Office. Consider whether any new seals are required. Consider the impact upon existing Service Level Agreements or whether new Service Level Agreements need to be prepared. Consider transferring deeds, titles, contracts or seals held to another entity for safekeeping. Provide the transferee entity with the relevant parts of the contracts register that relate to the transferred function. (Major contracts may be able to be transferred by a proclamation under the Administrative Arrangements Act 1994). Government Guarantee Fee Liaise with SAFA and the transferee entity regarding the payment of any Government Guarantee fee (will it be split or will it remain with the transferor entity) and the transferring of any debt. Reissue date: September

139 Reference Other matters Financial and Contractual Responsible Officer Completed TI 2 clause 2.13 TI 28 clause Contractor Staff Advise contractors of arrangements on transfer: serve adequate notice for contract terminations establish the need for contractors going forward (based on the workload and surplus Public Sector Act staff that might be utilised in the first instance). where appropriate, re-engage contractors required. Register of Lost or Stolen Public Money and Property Provide a copy of the register, relevant for the functions being transferred, of public money (in excess of $1,000) and public property (with a value in excess of $10,000) that has been lost or stolen. Financial Management Compliance Program Provide a copy of the Financial Management Compliance Program for those functions that have been transferred. Reference Other Matters - Employees Responsible Officer Completed Public Sector Act sec 26 & 9 TI 25 clause Gazette/agreement Arrange for the transferred Public Sector Act staff to be published in the Government Gazette. A copy of the gazettal is to be retained; forwarded to the Financial Management Team ( Public Finance branch, Department of Treasury and Finance) and to the transferee entity. Where a Chief Executive has agreed with another Chief Executive to transfer employees between two public authorities (under s 9(3) of the Public Sector Act), advise the Under Treasurer and Chief Executive of the Department of the Premier and Cabinet. The advice must include: Reissue date: September

140 Reference Other Matters - Employees Responsible Officer Completed details of the public authorities involved; the date the employees/function transferred; the nature of the transfer of employees/function; the number of employees transferred; and any budget impacts. Determinations 3.1 Employment Conditions Leave, page 15 APF IV Para 5.31 Determination of leave entitlements Provide the transferee entity with the full details of transferred personnel s service (including details of any part-time or casual service and flexible working arrangements such as purchased leave or working from home), accrued leave entitlements, and leave taken (including periods of leave without pay not counted as service for the purposes of long service leave by the transferor entity). (Note the requirements of Determination 3.1 Employment Conditions - Leave in relation to transfers of entitlements between government agencies.) Determinations 3.1 Employment Conditions Leave, page 69 TI 9 clause & Assignment or appointment to a Public Sector Act position If a Public Sector Act employee is assigned or appointed to a Public Sector Act position in another administrative unit: transfer and make available any information pertaining to existing leave entitlements of the employee to the new administrative unit (applies to both temporary and long-term movements); do not transfer monies relating to leave entitlements to the new administrative unit; do not make payments in lieu of leave, as the employee has not resigned from the Public Sector Act. Payroll deductions Forward all payroll deduction authorisations or a statement of normal deductions for personnel transferred to the transferee entity. Reissue date: September

141 Reference Other Matters - Employees Responsible Officer Completed Determination 3.1 Employment Conditions: Leave, Attachment E, page 52 Determination 3.1 Employment Conditions:Leave, Attachment E, page 53 APF IV para APS 5.29 and APS 5.30 Recreation leave Where a transferred employee has received a payment in lieu of recreation leave entitlements, ensure the records transferred to the transferee entity reflect this. Long service leave Where a transferred employee has received a payment in lieu of long service leave entitlements, ensure the records transferred to the transferee entity reflect this. Prepare employee benefit journal entries When transferred, extinguish any employee benefit liabilities and recognise income equivalent to the liabilities extinguished. Where paid, extinguish any employee benefit liabilities and recognise a decrease in assets (cash). To the extent that the payment is less than the relevant liability to be cancelled, recognise revenue equal to the amount of the shortfall. OHS&W / Worker s Compensation Consider any reporting and compliance implications for occupational health, safety and welfare and any worker s compensation issues (e.g. transfer of Workcover SA claims, preparation of returns, advising of entity name changes etc). Reissue date: September

142 Reference Other Matters - Information Responsible Officer Completed Consider the effect of the restructure on the entity s Strategic Plan and Business Plan (and the link to the State Strategic plan). DPC Circular 13, section 4.1 Annual Report Requirements The annual report includes details of the administrative restructures/machinery of government changes. Advise relevant parties of any administrative changes, e.g. customers, suppliers, Commonwealth, State and local government agencies: changes in trading names, mailing address, contact officers (names and numbers). new bank account details for grants money, contacts and reporting arrangements. Legislation For entities established under specific legislation, the Public Corporations Act 1993 or Corporations Act 2001, consider legislation impacts and/or liaise with Crown Law, for example: A proclamation under the Administrative Arrangements Act 1994 is required to transfer the acts administered from one Minister to another. No other action would be required unless the act that established an entity required a change. A change to an entity established under the Public Corporations Act 1993 may require an amendment to the Act s regulations. For an entity established under the Corporation Act 2001, the constitution and structure of the board needs to be reviewed for any change. If there is a change, then the reporting requirements of the Australian Securities and Investment Commission need to be considered. Where entities are existing and declared semi-government authorities, consider whether the entity is still the same legal body under its new relevant legislation. If not, the entity will need to be considered for proclamation as a semi-government authority under the Government Financing Authority Act 1982 and Public Finance and Audit Act Reissue date: September

143 Reference Other Matters - Information Responsible Officer Review legislative and other machinery of government changes on Board appointments (e.g. termination of appointments, altering term of appointments) Completed Electronic information Advise the entity responsible for the Intra SA website of any information changes disclosure, e.g. contact details, procedures, contract disclosures etc. Consider the impact on the entity s external and internal websites, e.g. redirection to a new site, contact details, transfer of documents/information. Liaise with the Chief Information Officer to discuss: responsibility for the backup of old systems; establishing procedures for the retrieval of old systems; and examining the Corporate Recovery Plan to determine the impact and relevancy of the plan in relation to the new structure of the entity Statutory records Assess the need for a new Records Disposal Schedule (RDS) Consider impact upon Freedom of Information status as the status may change upon restructure. Reissue date: September

144 Paragraph of Treasurer s Instruction 2 Financial Management refers to the Risk Management Policy Statement issued by the Premier and Treasurer in For completeness, a copy is included in this Toolkit. Reissue date: September

145 BIBLIOGRAPHY An Introduction to the Financial Management Framework, 2005, Queensland Government Treasury. Auditing and Assurance Standards Board Standards and Pronouncements, Auditing and Assurance Standards Board. Australian Accounting Standards Board Standards, Australian Accounting Standards Board. Building A Better Financial Management Framework, 1999, Australian National Audit Office Code of Ethics for Professional Accountants APES 110, June 2006, Accounting Professional & Ethical Standards Board. Compliance Programs AS , 2006, Standards Australia. Corporate Social Responsibility AS , 2003, Standards Australia. Enterprise Governance, 2004, International Federation of Accountants. Financial Management Framework, 1998, SA DTF Fraud and Corruption Control AS , Standards Australia. Good Governance Principles AS , Standards Australia. Governance in the Public Sector: A Governing Body Perspective, 2001, International Federation of Accountants. Information Security Risk Management Guidelines HB , 2004, Standards Australia Internal Audit Framework, Australian Capital Territory Government. Internal Auditing: Guidance For The Professional, The Institute Of Internal Auditors. Internal Controls A Review of Current Developments, 2006, International Federation of Accountants. International Standards for the Professional Practice of Internal Auditing, (effective January 2007, revised January 2011), The Institute of Internal Auditors. Management Discussion and Analysis Better Practice Guideline, 2007, Australian Capital Territory Government, Department of Treasury Accounting Branch. National Position Statement on Accountability and Control, Revised Edition 2003, Institute of Internal Auditors Australia. Organisational Codes of Conduct AS , 2003, Standards Australia. Internal Audit and Risk Management Policy for the New South Wales Public Sectorl, New South Wales Treasury. Risk Management AS/NZS ISO 3100 Risk Management Principles and Guidance, 2009, Standards Australia and Standards New Zealand. Sarbanes-Oxley Act (USA) 2002 Reissue date: September

146 The Financial Management Framework for the General Government Sector, 2000, New South Wales Treasury The Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 Whole of Government Financial Management Compliance Framework, 2005 (updated January 2011), Department of Treasury and Finance, Victoria. Reissue date: September