Public Finance Management Act 2002


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PUBLIC FINANCE MANAGEMENT
ACT 2002

Public Finance Management Act 2002 Arrangement of Sections





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PUBLIC FINANCE MANAGEMENT ACT 2002

Arrangement of Sections
Section

PART I - PRELIMINARY 5
1 Short title and commencement.........................................................................5
2 Interpretation....................................................................................................5

PART II - RESPONSIBILITY FOR FINANCIAL MANAGEMENT 9
3 Responsibilities of the Minister .......................................................................9
4 Minister may delegate powers .......................................................................10
5 The Secretary for Finance..............................................................................10
6 Access to information ....................................................................................10

PART III - BUDGETS AND APPROPRIATIONS 10
7 Estimates........................................................................................................10
8 Form of the Estimates ....................................................................................11
9 Appropriation required...................................................................................11
10 Transfer between programmes.......................................................................11
11 Charge for supply of goods and services .......................................................12
12 Adjustment for Contingency Fund.................................................................12
13 Net appropriation ...........................................................................................13
14 Timing and approval of Appropriation Bill ...................................................13

PART IV - PUBLIC MONEY, THE PUBLIC FUND AND TRUST
MONEY 14
15 The Public Fund.............................................................................................14

Arrangement of Sections Public Finance Management Act 2002





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16 Dealing with public money ............................................................................14
17 Government banking business .......................................................................14
18 Balances may be invested ..............................................................................15
19 Imprests ..........................................................................................................15
20 Passing of payments without receipts ............................................................15
21 Refunds and corrections .................................................................................16
22 Trust money ...................................................................................................16

PART V - BORROWING, LOANS, AND GUARANTEES 17
23 Government not to borrow except under Act .................................................17
24 Form and signing of loan agreement..............................................................17
25 Power to raise loans........................................................................................17
26 Loans to Government .....................................................................................17
27 Subsidiary loan agreements............................................................................18
28 Stocks, bonds, and promissory notes..............................................................18
29 Treasury Bills .................................................................................................18
30 Liability of the Government ...........................................................................18
31 Power to give guarantees and indemnities .....................................................19
32 Taking and release of security to the Government.........................................19
33 Expenditure for protection of public securities ..............................................20
34 Register of loans and guarantees ....................................................................20

PART VI - FINANCIAL REPORTING 20
35 Financial statements .......................................................................................20
36 Quarterly summaries ......................................................................................21
37 Payments to be included in financial statements and summaries...................21
38 General accepted accounting practice ............................................................21
39 Offences and penalties ...................................................................................22
40 Disciplining of accountable officers...............................................................22

PART VIII - MISCELLANEOUS PROVISIONS 23
41 Write off losses...............................................................................................23
42 Minister responsible for payment of remuneration to Public Servants ..........24
43 Indemnity .......................................................................................................24
44 Regulations.....................................................................................................24
45 Treasury Instructions......................................................................................24
46 Transitional provisions...................................................................................25
47 This Act to prevail..........................................................................................25
48 Repeal and savings .........................................................................................25

Public Finance Management Act 2002 Section 1





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PUBLIC FINANCE MANAGEMENT ACT 2002

No. 27 of 2002

AN ACT AN ACT TO REGULATE ECONOMIC, FISCAL AND
FINANCIAL MANAGEMENT BY GOVERNMENT

I assent,
TAUFA'AHAU TUPOU IV,

14th April, 2003

[5th of November, 2002]

BE IT ENACTED by the King and Legislative Assembly of Tonga in the Legislature
of the Kingdom as follows:

PART I - PRELIMINARY

1 Short title and commencement
(1) This Act may be cited as the Public Finance Management Act 2002.

(2) This Act shall come into force on a day to be proclaimed by His Majesty
in Council.

2 Interpretation
In this Act, unless the context otherwise requires:

Section 2 Public Finance Management Act 2002





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“accountable officer” means:
(a) every Secretary of a Ministry or person appointed to act in

the post of Secretary of a Ministry;
(b) every person who is required to render an account under this

or any other Act for any public moneys;
(c) every person who by any Act, Regulation, Treasury

Instruction or by virtue of any appointment, is charged with
the duty of collecting, receiving or disbursing any public
money or trust money or who actually does receive or
disburse any public money or trust money; and

(d) every person who is charged with the purchase, receipt,
custody or disposal of, or the accounting for, any public
money or public resources;

“approved investments” means:
(a) any securities issued by the Government;
(b) any securities issued by a bank lawfully operating in Tonga;
(c) any securities issued by an overseas institution with a credit

rating of investment grade or better notified by an
internationally recognized credit rating agency; and

(d) any other investments declared by the Minister on the
approval of Cabinet;

“Audit Office” means the Office of the Auditor General;

“bank” has the meaning given to it by the National Reserve Bank of
Tonga Act (Cap. 102);

“chief executive” means the Chief Executive Officer appointed to manage
a public enterprise;

“Contingency Fund” means expenditure that:
(a) could not have reasonably been expected to have been

included in the Estimates of any Vote;
(b) becomes essential to the carrying on of programme

operations; and
(c) cannot be met through the reallocation of financial resources

from within a programme allocation or from within the total
allocation to the relevant Ministry programmes;

“Estimates” means the statements of the proposed public revenues and
expenditure in any financial year and any accompanying explanatory
statements, as presented to the Legislative Assembly;

Public Finance Management Act 2002 Section 2





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“financial statements” means the financial statements required under
this Act;

“financial year” means:
(a) in relation to the Government and Government financial

statements a period of 12 months ending on 30th June; and
(b) in relation to a public enterprise, the body's annual

accounting period;

“generally accepted accounting practice” means:
(a) standards and practices promulgated by the International

Federation of Accountants as applicable to Governments and
public enterprises; or

(b) if no standard or practice exists then accounting principles or
practices which have the approval of the Secretary for
Finance and the Auditor General.

“Government agency” means an office, entity or instrument of the
Government other than a Ministry or public enterprise;

“grants” means:
(a) non-repayable receipts from other Governments,

international or domestic institutions or individuals; or
(b) non-repayable payments made by the Government of Tonga

to other Governments or international or domestic
institutions or individuals;

“imprestee” means a person in whose hands any public money is placed
for expenditure;

“Minister” means the Minister of Finance;

“moneys” includes:
(a) negotiable instruments; and
(b) securities of any kind for the payment of moneys;

“off-set receipt” means revenue received which is used to fund the
activities of a Ministry and is authorised for that purpose by an
Appropriation Act in Accordance with this Act;

“outcomes” mean the impacts or consequences for the community of the
programmes or activities of Government;

“programmes” means the activities required to produce the goods and
services to be produced by a Ministry;

“public enterprise” means a statutory corporation, corporation, company
or other entity in which the Government holds a controlling interest;

Section 2 Public Finance Management Act 2002





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“public debt” means all liabilities of the Government but does not include
liability where the Government is trustee for another person;

“Public Fund” means the Public Fund established under this Act;

“public money” means all money other than trust money received by the
Government, including all revenue, grants, loans and other moneys, and
all bonds, debentures, and any other securities received by, or on account
of, or payable to, or belonging to, or deposited with the Government by:

(a) any officer of Government in his capacity as such; or
(b) any person on behalf of Government;

“public resources” mean real or personal property that belongs to or is
owned or held by the Government, or by an agency, public enterprise or
person on behalf of the Government;

“public securities” means securities representing the investment, or
securing the payment, of any public money;

“records” mean information recorded and kept by any means and
includes all books, accounts, rolls, files, vouchers, receipts, cheques,
records, registers, papers, documents, photographic plates, microfilms,
photostatic negatives, prints, tapes, disks, computer reels, diskettes and
hard disk, perforated rolls and any other type of written, printed, copied,
magnetic tape, electronic data record or other information whatsoever, and
also includes all papers and other records relating to accounting operations
and practice or information recorded and kept by any means;

“Responsible Minister” means:
(a) in relation to a Ministry, the Minister appointed to be

responsible for that Ministry; and
(b) in relation to an office of the Legislative Assembly, the

Speaker; and
(c) in relation to a public enterprise, the Minister appointed to be

responsible for that public enterprise;

“revenue” means all non-repayable Government receipts;

“Secretary of a Ministry” includes any person in charge of the
administration of a Ministry or Department;

“securities” means certificates attesting credit, the ownership of stocks or
bonds, or the right of ownership connected with tradable derivatives;

“security” means an asset or assets pledged as a guarantee of the
fulfilment of an undertaking or the repayment of a loan, to be forfeited in
the case of default;

Public Finance Management Act 2002 Section 3





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“Sequestrate” means the permanent transfer of an appropriated amount of
funds from a programme within a Ministry to the Contingency Fund.

“statutory expenditure” means expenditure charged on the Public Fund
under the provisions of the Constitution or charged on the Public Fund or
any other public fund or account by any other Act in which it is expressly
stated to be statutory expenditure;

“term loan” means any loan that is not intended to be repaid within the
financial year that it is raised;

“Tonga Government Fund” means revenue raised domestically by the
Government;

“Treasury Instructions” means Treasury Instructions issued under this
Act;

“trust account” means a trust account established under this Act;

“trust money” means;
(a) money that is deposited with the Government pending the

completion of a transaction or dispute and which may
become repayable to the depositor or payable to the
Government or any other person;

(b) money that is paid into Court for possible repayment to the
payer or a third party, by virtue of any Act, rule, court order
or other authority;

(c) unclaimed money that is due to or belongs to any person and
is deposited with the Government;

(d) money that is paid to the Government in trust for any purpose
as approved by the Minister; and

(e) money that belongs to or is due to any person and is collected
by the Government under any agreement between the
Government and that person.

“Vote” means a specified sum of money authorised under an
Appropriation Act.

PART II - RESPONSIBILITY FOR FINANCIAL
MANAGEMENT

3 Responsibilities of the Minister
The Minister is responsible for the management of public finance under this Act.

Section 4 Public Finance Management Act 2002





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4 Minister may delegate powers
The Minister may in writing delegate to the Secretary for Finance any of his
powers under this Act unless prohibited by any other law.

5 The Secretary for Finance
The Secretary for Finance shall be the administrative head of the Ministry of
Finance and he shall report to the Minister.

6 Access to information
(1) The Minister has power —

(a) to obtain full and free access at all times to all accounts and records
of accountable officers that relate, directly or indirectly, to:
(i) the collection, receipt, expenditure, issue or use of public
money; and
(ii) the receipt, custody, disposal, issue or use of public resources,
and to inspect and inquire into and call for any information arising
from those accounts and records; and

(b) where he has reason to believe that an accountable officer has been
or may have been in breach of this Act, recommend to the
appointing authority that the accountable officer be suspended from
all financial duties and responsibilities, pending an investigation.

(2) In the exercise of his powers under this section, the Minister may appoint
in writing any person to inquire into a report to him on any matter or
matters specified in the instrument of appointment.

PART III - BUDGETS AND APPROPRIATIONS

7 Estimates
(1) The Minister shall prepare and submit to Privy Council through Cabinet a

statement of anticipated revenue for the forthcoming financial year
together with a statement of the anticipated budgetary appropriations.

(2) The Minister shall prepare the Estimates, in accordance with the Budget
approved by Privy Council, for introduction to the Legislative Assembly
for the forthcoming financial year.

(3) The Minister shall present the Estimates for the forthcoming financial year
to the Legislative Assembly.

Public Finance Management Act 2002 Section 8





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(4) The statement of statutory expenditure shall be included in the Estimates
in order to present the total expenditure proposed in the Government's
programmes or activities.

(5) The statement of statutory expenditure shall include a brief description of
all projected statutory expenditures for the forthcoming financial year,
stating the authority for any payment to be made and showing
comparative revised estimated figures for each item in respect of the
previous appropriation period.

8 Form of the Estimates
The Estimates shall include the following information in respect of each Vote:

(a) the Minister responsible for the Vote;
(b) the Ministry administering the Vote;
(c) a brief description of the activities of the Ministry receiving the

Vote including anticipated expenditure and revenue; and
(d) any other relevant information required by the Minister.

9 Appropriation required
(1) No public money shall be expended unless the expenditure has been

authorised by an Appropriation Act limited in accordance with subsection
(2) or is statutory expenditure.

(2) The authority to expend money or incur expenses or liabilities under an
Appropriation Act lapses at the end of the financial year to which that Act
relates.

(3) Subject to section 10, any money appropriated under this section may be
expended only in relation to that appropriation and for no other purpose.

(4) Each expenditure of public money made in respect of statutory
expenditure shall be managed and accounted for in the same manner as
public money is expended under an Appropriation Act.

(5) Donor funds received subsequent to the passage of the Appropriation Bill
shall be made available to the respective Votes without further approval
from the Legislative Assembly.

10 Transfer between programmes
(1) The Minister may, at the request of the relevant Minister, direct that an

amount appropriated for a programme be transferred to any other
programme for that Ministry where:

Section 11 Public Finance Management Act 2002





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(a) the amount transferred does not increase an appropriation for the
financial year for that programme by more than 10 percent;

(b) the transfer does not conflict with performance of the programme
from which funds are transferred; and

(c) the total appropriation for that financial year for that Ministry is
unaltered.

(2) A clause recording any transfers made under subsection (1) in that
financial year, and all such budget variations shall be noted in the
financial statements for that year.

11 Charge for supply of goods and services
Subject to section 12(1), a Ministry may charge for the provision of goods or
services, if the recipient is another Ministry provided that there is a prior
agreement to charge the cost incurred to the recipient Ministry.

12 Adjustment for Contingency Fund
(1) The Estimates presented to the Legislative Assembly shall contain a Vote

for a Contingency Fund, with a proposed appropriation not exceeding 5
percent of the Tonga Government Fund.

(2) Where the Minister considers that expenditure from the Public Fund in
any financial year in excess of, or without, appropriation by the
Legislative Assembly should be approved, he may with the approval of
Privy Council, transfer to one or more nominated programmes from the
Contingency Fund such sum or sums as he considers necessary up to but
not exceeding the amount of the balance from time to time available in the
Contingency Fund.

(3) If, during any review of economic and fiscal performance, the Privy
Council determines that it is necessary to redirect spending, the Minister,
with the consent of Privy Council, may sequestrate any amounts from any
programme or programmes and such amounts shall made available to the
Contingency Fund.

(4) No expenditure in excess of, or without, appropriation other than is
provided in this section, shall be permitted.

(5) This section does not apply to statutory expenditure.

(6) The financial statements for the financial year in which any transfers
approved under section (1) are made, shall disclose each instance of a
revised appropriation, together with an explanation of the reasons for such
revision regardless of whether such sum has been subsequently

Public Finance Management Act 2002 Section 13





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appropriated during the course of the financial year in an amended or
supplementary Appropriation Act.

13 Net appropriation
(1) All appropriations shall be for the total amount of the expenditure

required, unless otherwise provided for in this Act.

(2) An appropriation may be shown in the Appropriation Act to be off-set by
an amount of revenue where the revenue applies to the recovery of costs
of the relevant budget programme and meets the criteria set for that
programme by the Minister.

(3) Where an appropriation is for a net appropriation, all estimated
expenditure associated with revenue generation and revenue from all
sources shall be included in the budget statement and provided for in the
Appropriation Act to reflect how the net appropriation figure was
ascertained.

(4) Where this section applies the Minister shall establish separated ledger
accounts for off-set receipts and shall ensure that appropriations from
those accounts are permitted only for the purpose for which the accounts
are established.

(5) Interest and other receipts derived from the investment of off-set receipts
shall be treated as further off-set receipts.

14 Timing and approval of Appropriation Bill
(1) The Appropriation Bill shall be introduced in the Assembly before the end

of the previous financial year.

(2) If an Appropriation Act has not come into force in accordance with
subsection (1), the Minister may issue from the Public Fund such sums as
are necessary for carrying out the essential services of Government at a
level not exceeding the level of those services in the previous financial
year for a period of up to 3 months or until the Appropriation Act comes
into force, whichever is the earlier.

(3) The Minister shall, upon an Appropriation Act coming into force, make
funds available to the respective Votes according to the cash flow
forecasts agreed between the Minister responsible for the Vote and the
Minister or, if agreement cannot be reached, as directed by Cabinet.

Section 15 Public Finance Management Act 2002





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PART IV - PUBLIC MONEY, THE PUBLIC FUND AND
TRUST MONEY

15 The Public Fund
There shall be a Public Fund which shall consist of:

(a) such funds as may be declared by the Minister to be part of the
Public Fund; and

(b) every separate fund, account or subsidiary account established
under any other Act to form part of the Public Fund.

16 Dealing with public money
(1) Public money is the property of the Government.

(2) Public money shall, except as otherwise provided in this Act, be paid into
bank accounts designated by the Ministry for that purpose and such
accounts shall form part of the Public Fund.

(3) No bank account shall be opened or operated for the deposit and
withdrawal of public money without the express authority of and on such
conditions as the Minister determines and the Minister may transfer
money within the Public Fund from one bank account to another.

(4) All Ministries shall within 1 month from the commencement of this Act,
cease to operate any bank other than in accordance with subsection (3).

(5) The Minister may demand in writing the manager a bank operating in
Tonga to disclose the records of any accounts with his bank operated by a
Ministry and on receiving such demand, the manager shall comply.

17 Government banking business
(1) The Minister may agree with any bank in Tonga or overseas upon terms

and conditions for the conduct of the Government's banking business,
including arrangements for deposits to be made under the authority of this
Act and for interest to be payable by the bank on balances held.

(2) Any such bank deposit shall be an approved investment.

(3) Every bank at which any Government account of any nature is kept shall
send to the Ministry and to the Audit Office statements of such accounts
as the Minister or the Auditor General may require.

Public Finance Management Act 2002 Section 18





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(4) The Minister may make arrangements with any bank for the receipt,
custody, payment and transmission of public money within or outside
Tonga.

18 Balances may be invested
(1) The Minister may invest any balance or part thereof of the Public Fund for

such period or on such terms as he thinks fit at any bank and in such other
securities as the Minister may declare to be approved investments
consistent with the financial policies of Government.

(2) Interests earned on investments shall be credited to the Public Fund and
shall be used only in accordance with an Appropriation Act.

(3) The Minister may sell and convert into money any securities, and that
money shall be paid into the Public Fund to the credit of the proper fund
to which it belongs.

19 Imprests
(1) The Minister in such cases as he thinks fit may, with the consent of

Cabinet, authorise an imprest account to be opened at a bank and such
account shall be identified as a Government account.

(2) Withdrawals from an imprest account shall only be made by the imprestee
and at least one officer designated by the Minister in writing.

(3) Money may be issued by way of imprest in the name of the Government
from the Public Fund.

(4) Money required to be issued by way of imprest shall be charged against
the Programme or other authority for the activities required.

(5) The Minister may charge money by way of general imprest against the
relative money so issued shall be transferred to the programme or other
authority for the purposes of which the money is expended.

(6) The total of all money issued by way of general imprest shall not exceed
10 percent of the total amount of all sums appropriated by all
Appropriation Acts for the current financial year.

20 Passing of payments without receipts
The Minister may, on proof that any receipts or other requisite papers are lost or
destroyed, order that any payment of public money be allowed without the
production of receipts or other requisite papers.

Section 21 Public Finance Management Act 2002





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21 Refunds and corrections
(1) The Minister may refund as statutory expenditure, within five years of any

sum being paid into the Public Fund, all or any part of such sum as was
not properly payable to the Government, whether or not application has
been made for a refund.

(2) The Minister shall record the payment of the amount against the
appropriate vote or other authority, fund or account.

(3) The Minister may amend the record to reflect the true position where there
has been an error in the amount of any debt to Government or the identity
of the debtor.

22 Trust money
(1) The Minister may establish trust accounts under this or any other Act and

all trust moneys shall be paid into such trust accounts.

(2) The Secretary of Finance or the appropriate officer of the organisation
responsible for the account shall prepare for each trust account an
instrument, signed by that person, setting out the following —
(a) the name of the account;
(b) a request for the establishment of the account;
(c) the name of the Ministry or organisation operating the account;
(d) any legal requirement;
(e) the names and designations of not less than two authorised

signatories;
(f) the purpose of the account;
(g) the source or sources of funds to be deposited in the account;
(h) the approved categories of expenditure to be paid from the account;
(i) any particular conditions; and
(j) instructions for the disposal of funds on the completion of the

purpose for, or the closure of, the account.

(3) The Minister shall endorse approval or disapproval of the request on the
face of the instrument, provided that the Minister shall not disapprove the
request where the money has already been received by the Ministry and is
trust money as defined under this Act.

(4) In the case of approval, the instrument shall constitute an agreement for
the operation of the relevant account which shall be established forthwith.

Public Finance Management Act 2002 Section 23





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PART V - BORROWING, LOANS, AND GUARANTEES

23 Government not to borrow except under Act
The Government may only borrow under the authority of this Act or any other
Act authorising it to do so.

24 Form and signing of loan agreement
Every loan under this Part shall be in the name of the Government and the
Minister shall, before entering into any agreement to borrow money under this
Part, obtain the approval of Privy Council.

25 Power to raise loans
(1) The Minister may borrow from any source whether within or without the

Kingdom, sums of money not exceeding in the aggregate $15,000,000 in
any one financial year, or such further sums as may be authorised by a
resolution of the Legislative Assembly.

(2) Any borrowings made for the purpose of managing cash flows within a
financial year and paid within that financial year shall not be included in
the calculation of the limitation imposed by subsection (1).

(3) All loans made by government in any financial year, and the associated
terms and conditions, shall be reported in the Budget statement
represented to the Legislative Assembly for the next following financial
year.

26 Loans to Government
(1) All money received by the Government under the loan agreement shall be;

(a) statutory expenditure;
(b) paid into and charged to such account as may be agreed between

the Government and the lender; and
(c) expended for the purposes for which it is borrowed.

(2) All principal, interest and other money payable under the loan agreement
shall be a charge on the public revenues of Tonga and on the Public Fund
or such other fund or account as the Minister determines, and shall be
statutory expenditure payable at the time or times provided in the loan
agreement.

Section 27 Public Finance Management Act 2002





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(3) The Minister shall not issue or register any bonds, in respect of any loan
entered into under this section, unless otherwise directed by the Privy
Council.

27 Subsidiary loan agreements
(1) The Government may lend to another entity under a subsidiary loan

agreement, for the purposes specified in the primary loan agreement
entered into under this Act.

(2) Where appropriate, when the Government enters into a subsidiary loan
agreement under subsection (1) it shall ensure it has adequate security
against the loan.

(3) All on-lendings by government in any financial year, and the associated
terms and conditions, shall be reported in the Budget statement presented
to the Legislative Assembly for the following financial year.

28 Stocks, bonds, and promissory notes
(1) Where Government intends to raise a loan through the issue of stocks,

bonds or promissory notes then it shall do so in accordance with any
Regulations made under this Act.

(2) The principal and interest represented by the stocks, bonds, or promissory
notes issued under this section shall form part of the public debt.

29 Treasury Bills
(1) The Minister may borrow for and on behalf of the Government by the

issue of Treasury Bills, and he shall do so in accordance with any
Regulations made under this Act.

(2) The principal moneys represented by Treasury Bills issued under this
section shall form part of the debt.

30 Liability of the Government
The Government shall not be liable to contribute towards the payment of any
debt or liability unless it is liable to contribute under any Act, or under any
guarantee or indemnity given under this Act.

Public Finance Management Act 2002 Section 31





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31 Power to give guarantees and indemnities
(1) The Minister may, subject to subsection (2), give a written guarantee or

indemnity upon such terms and conditions as the Minister thinks fit, in
respect of the performance of any person, organisation or public
enterprise, but may only do so —
(a) with the prior consent of Privy Council;
(b) where the total level of all guarantees or indemnities given in any

one financial year and still outstanding does not exceed 5 percent of
the Tonga Government Fund as appropriated; and

(c) subject to satisfying the requirement of an “approved investment”.

Provided that if the Minister considers there are special circumstances that
make it expedient to exceed the limit imposed by paragraph (b) of this
subsection, he shall apply to the Privy Council which may give specific
authority for that excess.

(2) The Minister shall report any guarantee or indemnity he has given within
28 days to the Legislative Assembly or, if it is not in session, at the
commencement of the next session.

(3) Where the Minister has received specific authority from the Privy Council
to exceed the limit in subsection (1) (b), he shall include the reasons in his
report to the Legislative Assembly under subsection (2).

(4) Any money paid by the Government under a guarantee or indemnity given
under this section shall be statutory expenditure and shall constitute a debt
due to the Government from the person, organisation or public enterprise
in respect of whom the guarantee or indemnity was given.

32 Taking and release of security to the Government
(1) Wherever security is taken in respect of an advance of public money, and

unless the Act authorising the advance provides otherwise, the security
shall be given to and taken in the name of the Government.

(2) Where any security is for the time being vested in the Government,
whether it has become so vested before or after the commencement of this
Act, the Minister may on behalf of the Government exercise any powers,
functions and rights, and undertake and perform any liabilities in respect
of or in connection with the security which could be exercised,
undertaken, or performed by the Government.

(3) A document purporting to be executed by the Minister under this section
shall be deemed to have been duly executed on behalf of and shall bind
the Government.

Section 33 Public Finance Management Act 2002





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33 Expenditure for protection of public securities
(1) Subject to Part III and to the provisions of this section, money may be

expended out of any fund or account in the Public Fund for the protection,
preservation and improvement of any real or personal property on the
security of which any money in that fund or account has been invested,
whether before or after the commencement of this Act.

(2) The authority conferred by this section may be exercised notwithstanding
the prior exercise in respect of the mortgaged property of any power of
sale or entry into possession.

(3) No amount shall be expended under this section in respect of any property
without the approval of the Minister on the recommendation of the
Responsible Minister.

(4) This section is in addition to and not in substitution for any powers or
authorities conferred otherwise than by this section.

34 Register of loans and guarantees
The Minister shall maintain a register of loans, subsidiary loans, guarantees or
indemnities to which the Government is a party.

PART VI - FINANCIAL REPORTING

35 Financial statements
(1) The Minister shall no later than 6 months after the end of the financial

year, prepare and present to the Legislative Assembly or if it is not in
session at the commencement of the next session, the financial statements
for that year.

(2)
(a) The Minister shall copy the financial statements presented to the

Legislative Assembly under subsection (1) to the Auditor General
at the same time it is presented to the Legislative Assembly.

(b) The Auditor General shall examine the financial statements and
provide to the Minister a written report to be presented to the
Legislative Assembly stating his opinion whether the financial
statements —
(i) have been prepared in accordance with this Act and any other

relevant Acts; and
(ii) present fairly the matters required by this Act and those Acts.

Public Finance Management Act 2002 Section 36





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(3) If the Auditor General is not able to report in the terms specified under
this section, he shall state the reasons and if the Auditor General is of the
opinion that he did not obtain all necessary information and explanations,
he shall give particulars of the shortcomings.

(4) The report of the Auditor General shall be returned to the Minister not
later than 8 months from the end of the financial year to which it relates,
and the Minister shall present the report to the Legislative Assembly
forthwith or if it is not in session, at the commencement of the next
session.

(5) The Minister shall publish by Notice in the Gazette, the financial
statements and the Auditor General's report.

(6) The Legislative Assembly may allow such further time as may be
necessary for the preparation and presentation to the Assembly of the
financial statements and the Auditor General's report if satisfied by the
Minister, that exceptional circumstances exist.

36 Quarterly summaries
(1) The Minister shall within one month of the end of each quarter, except the

last quarter of each financial year, prepare and send to the Auditor
General a summary of the receipts and payments of the Public Fund from
the beginning of the financial year to the end of that quarter.

(2) Each such summary after being certified by the Auditor General shall be
returned to the Minister not later than 2 months after the end of the quarter
to which it relates and the Minister shall forthwith publish the certified
summary in the Gazette.

37 Payments to be included in financial statements and summaries
(1) All financial statements and quarterly summaries required under this Act

shall include all payments authorised by the Minister during the period to
which the financial statements or summary relate.

(2) Imprests unaccounted for at the end of any quarter shall not be included in
the payments but shall be shown as balances in hand.

38 General accepted accounting practice
Financial reports, financial statements, associated information and accounting
procedures required by this Act shall be in accordance with generally accepted
accounting practice.

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39 Offences and penalties
(1) A person who:

(a) refuses or wilfully neglects to attend at a time and place required by
the Minister or a person appointed by him under section 6(2), in
connection with an inspection or inquiry under this Act;

(b) refuses or wilfully neglects to pay any public money or trust money
into the account or fund into which it is payable;

(d) refuses or wilfully neglects to provide any report required under
this Act;

(e) wilfully or recklessly over-commits or overspends funds under his
control;

(f) knowingly makes a false statement or declaration or gives a false
certificate required under this Act;

(g) does any act for the purpose of procuring —
(i) the improper payment of public money or trust money;
(ii) the improper use of public property or public resources; or
(iii) wilfully failing to carry out any duty or obligation imposed

on that person under this Act; or
(h) wilfully provides misleading or false information,

commits an offence and shall be liable upon conviction to a fine not
exceeding $4,000 and where the person is a body corporate to a fine not
exceeding $50,000.

(2) Where any body corporate commits an offence against this Act, every
director, chief executive, secretary, or other officer of the body corporate
and every person purporting to act in any such capacity shall also be
guilty of an offence unless that person satisfies the Court that either —
(a) the offence was committed without that person's knowledge or

consent;
(b) was not the result of that person's gross negligence; or
(c) that person took all reasonable steps to prevent the commission of

the offence.

(3) The Attorney General may bring a civil claim against any person who, in
breach of this section, receives public money or public resources in order
to recover such public money or public resources or the value thereof.

40 Disciplining of accountable officers
(1) For the purposes of this section, “appointing authority” means the

authority by whom, the accountable officer is appointed.

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(2) Where an accountable officer authorises expenditure or commitment of
funds in excess of the approved limit for any programme, the appointing
authority may suspend the accountable officer without pay with effect
from the date on which the Minister certifies the unauthorised expenditure
or commitment.

(3) An accountable officer suspended under subsection (2) may within 14
days of the date of such suspension make written submissions to the
appointing authority as to the circumstances giving rise to the
unauthorised expenditure or commitment.

(4) At the expiry of 14 days from the date of the suspension the appointing
authority, after considering any submission made under subsection (3),
may remove the suspension or terminate the appointment of the
accountable officer.

PART VIII - MISCELLANEOUS PROVISIONS

41 Write off losses
(1) An accountable officer shall report promptly to the Secretary of

Finance, —
(a) any losses or deficiencies of public moneys;
(b) any irrecoverable amounts of revenue;
(c) any irrecoverable debts and overpayments;
(d) the value of lost, deficient, condemned, unserviceable or obsolete

public resources; and
(e) any investments written off.

(2) The Secretary for Finance may, following any investigation that he thinks
necessary in a particular case —
(a) approve the write-off of an amount not exceeding $5,000; or
(b) refer to the Minister any case in which the amount exceeds $5,000

or where the write offs reported by any one accountable officer
exceed $10,000;

(3) The Minister may, in any case referred by the Secretary for Finance to
him —
(a) approvethe write-off of an amount, not exceeding $10,000; or
(b) in a case in which the amount exceeds $10,000, refer the matter to

Cabinet for decision.

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(4) All amounts approved for write-off by the Secretary for Finance, the
Minister or Cabinet respectively shall be reported in the financial
statements.

42 Minister responsible for payment of remuneration to Public
Servants
(1) The Minister is responsible for:

(a) making payment of the remuneration due to employees in the
Public Service in accordance with the programmes in the
Appropriation Act for that financial year; and

(b) carrying out the obligations of the Government as an employer for
withholding taxes or other amounts from remuneration due to such
employees as required by law.

(2) The Minister may by regulation prescribe the manner by which any such
employee can identify himself as a person entitled to receive
remuneration.

(3) Where an employee fails to identify himself in the manner prescribed, the
Minister may suspend the payment of his remuneration until his
identification is verified.

(4) Where no appropriation is made for the payment of remuneration, then an
employee's obligation to work and the Government's obligation of pay
that employee's remuneration is suspended until another appropriation is
made.

43 Indemnity
The Minister or any person duly appointed or authorised by the Minister, shall
not incur any liability as a result of anything done in good faith and with due
care in the exercise of any power or the performance of any duty under this Act.

44 Regulations
The Minister may make regulations for the proper and efficient administration of
this Act.

45 Treasury Instructions
The Minister may issue Treasury Instructions setting out detailed procedures and
requirements not inconsistent with this Act.

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46 Transitional provisions
(1) No person involved in the preparation of financial statements, budgets or

forecasts, shall be convicted of any offence under this Act for any act or
failure to act by that person in respect of the reporting provisions in Parts
II and VI during the period of 12 months from the coming into force of
this Act, unless it is shown that person acted intentionally.

(2) Where, during the period of 12 months from the coming into force of this
Act, any report, statement or update required by this Act is not provided
by the due date in accordance with this Act, the Minister shall report the
circumstances to the Legislative Assembly forthwith and if it is not in
session, at the commencement of the next session.

(3) Every act done in the name of the Minister, the Treasurer or Secretary for
Finance before the commencement of this Act will continue to have effect
as if done in the name of the Minister after the commencement of this Act.

47 This Act to prevail
Subject to the Constitution, where any provision of this Act conflicts any other
enactment, the provision of this Act shall prevail.

48 Repeal and savings
(1) The Public Revenue Act (Cap. 64), Public Finance Administration Act

(Cap. 65) and General Loan and Stock Act (Cap. 109) are repealed.

(2) All subordinate legislation made under the Acts repealed in subsection (1)
and in force immediately before the coming into force of this Act shall, so
far as it is not inconsistent with the provisions of this Act, continue in
force as if made under this Act.



Passed in the Legislative Assembly 5th day of November, 2002.