Public Finance Management Amendment Act, 2016

This important Act was gazetted as Act No. 6 of 2016 on 28th October 2016.  It came into operation the same day.

The Act makes major amendments to the Public Finance Management Act of  2009.  These amendments concern the interaction between responsible Ministries in central Government and its "public entities" (statutory bodies and Government-controlled companies) over which Ministries exercise oversight.  Stricter provision is made for —

  • the submission of plans and projections and budgets by public entities
  • the preparation and submission by public entities to the Accountant-General in the Treasury (Ministry of Finance and Economic Development) of quarterly financial statements

A lengthy new section 51A is added to the principal Act.  It contains stringent new provisions for the separation of roles between Ministries and the public entities for which they are responsible.  These cover—

  • strict compliance, by both Ministry officials and their counterparts in public entities, with the legislation constituting the public entities
  • strict separation and accounting for public resources for which a Ministry is responsible and the funds and resources for which the Ministry's public entities are responsible
  • prohibition of monetary or other benefits for Civil Service officials (allowances, remuneration, fuel coupons etc) from the resources of public entities unless Treasury  has given prior written approval
  • timely disclosure by public entity bosses and employees of problems of all sorts likely to impact on public resources or the financial interest of the State
  • the preparation and implementation by heads of Ministries of protocols, guidelines and best practice objectives to ensure that each Ministry's relationship with its public entities are in accordance with the new section 51A and good corporate government principles.

Civil servants and public entity officials failing to comply with the new section 51A, whether wilfully or with gross negligence, face criminal penalties on conviction by a court – a fine of up to level ten (currently $700,00) or five years in prison or both.   Ministers are not mentioned in the new section.

Protection for Whistleblowers in public entities is given by section 51A(6) which nullifies privacy and confidentiality clauses in both contracts of employment and laws and thereby clears the way for whistleblowers to make reports to the responsible Ministry.  It also prohibits consequential dismissal of or disciplinary action against whistleblowing employees.

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