In 2013 Treasury committed to a reform program known as Financial Management Transformation (FMT), which aimed to improve financial governance across the NSW public sector. The program was informed by the NSW Commission of Audit 2012 (the Schott Report) which identified:
- Significant under-investment in public sector financial management over several decades.
- An outdated and prescriptive policy framework, underpinned by the oldest financial management legislation in Australia.
- Systems which do not provide functionality to support a high performing public sector.
- The ongoing need for Government to meet modern budget control commitments.
The NSW Government is now finalising completion of FMT - the biggest financial reform undertaken by the Government in 30 years. The FMT program had three pillars:
- A new financial management system called Prime that enables end-to-end management of the budget – from the program planning stage, to the allocation of funding, to tracking expenditure, to the benchmarking of results.
- New policies that support performance and high-quality resource management. They will ensure spending decisions have greater alignment to the Government’s policy objectives for the State.
- Proposed new legislation which will establish a single framework for public sector financial management and replace numerous outdated legislative requirements.