GSF Act FAQs

Monies held in an account within the SDA are one exception to the general rule that all public monies form one Consolidated Fund (s. 39 of the Constitution Act 1902).

These accounts exist for the purpose(s) specified in the legislation which establishes the account. If that purpose has been fulfilled, or the SDA account is otherwise no longer needed, then the SDA account should be dissolved.

To dissolve an SDA account requires an amendment to the legislation which establishes it. Any monies remaining in the SDA account would be paid into the Consolidated Fund, unless the amending legislation provides otherwise.

If you wish to dissolve an SDA account, or you require further information, please contact your Policy and Budget analyst and your legal advisors

An account within the SDA is akin to a ledger account. It is not essential to have a separate bank account for an account within the SDA. However, the responsible manager for the account must maintain accounting records that are sufficient to prepare financial reports concerning the account. (s.7.8 of the GSF Act).

The Accountable Authority, via policies and procedures, and government officers must ensure that expenditure of money is in a way that is authorised.

For the expenditure to be authorised it must be done:

  • in accordance with a delegation or subdelegation from a person with power regarding the expenditure of money, or
  • under the authority of the GSF Act or any other law.

In relation to expenditure of money where authorisation is by delegation or subdelegation, the delegation (including thresholds) are set by the delegator. You should refer to your agency’s delegations manual and policies and procedures for who may authorise expenditure and how expenditure should be authorised.

Where no action has been taken in relation to agency delegations since the commencement of the GSF Act, transitional provisions provide that delegations continue in force. (Refer to clause 12 Schedule 1 Government Sector Finance Regulation 2018)

Where your practices comply with sections 12, 12A and 13 of the Public Finance and Audit Act 1983 (PFA 1983) those practices would generally be consistent with the requirements of the GSF Act. 

The GSF Act provides an opportunity for your agency to update your financial management practices and policies, including:

  1. updating your delegations, and 
  2. streamlining your expenditure processes. 

Additional information: Expenditure of money from the Consolidated Fund and delegations

Under the GSF Act, for expenditure of money from the Consolidated Fund[1], a Minister delegating[2] an appropriation expenditure function may impose terms and conditions on the delegation and also on any subdelegation. For an officer delegated or subdelegated an appropriation expenditure function they must be appropriately authorised with a valid delegation and they must exercise that function in accordance with the terms and conditions set by the Minister (if any).

For further information refer to the Expenditure and Delegating roles and responsibilities fact sheets. Section 5.2 and 5.5 GSF Act.

No. Thresholds are set by the delegator in the instrument of delegation.

Generally, the response to this question will depend on the terms of the contract and the circumstances of each case.

The below should be followed:

Section 5.5(1) of the GSF Act requires the Accountable Authority of an agency to ensure that expenditure of money for a GSF agency is in a way that is authorised.

Section 5.5(2) provides that a government officer must ensure that the officer’s expenditure of money for the State or a GSF agency is done in a way that is authorised. 

An accountable authority is also a government officer and would, therefore, be subject to this obligation in section 5.5(2).

Expenditure of money is authorised if it is done “in accordance with a delegation or subdelegation from a person with power regarding the expenditure of money” or “under the authority of [the GSF Act] or any other law”. 

“Expenditure of money” includes (s. 1.4, GSF Act):

  1. the commitment of money for expenditure, and 
  2. the incurring of expenditure and the making of payments, and 
  3. the making of payments. 

For a multi-year contract, the officer would be “committing” for expenditure on entry into the contract the total amount payable over the term of the contract. However, this may not necessarily be the answer in every case where a multi-year contract is concerned, and would depend on the terms of the contract. 

Accordingly, the officer must have a financial delegation for the total amount payable over the term of the contract, authority to enter into the contract, and the appropriation limit must not have otherwise been reached by expenditure in the relevant financial year. 

Please consider obtaining legal advice within your agency or joint formal advice with Treasury from the Crown Solicitor’s Office.

This is a new requirement under section 3.6(1)(a) of the GSF Act. Agencies will likely maintain an accounting manual, as this was required by section 11(3) of the Public Finance and Audit Act 1983 (PFAA) Act), now repealed.

The Accountable Authority is required to determine whether their agency’s existing financial management policies and procedures in its accounting manual are sufficient for the GSF Act. The GSF Act requirements also include establishing, maintaining and keeping under review:

  • the agency’s risk management, internal control and assurance processes; and
  • arrangements for protecting the integrity of financial and performance information.

These requirements are also similar to the internal control and audit requirements under the PFAA Act.

Treasury has previously issued the following mandatory policies and guidance:

If an agency adheres with the above policies, the Accountable Authority will comply with their obligations regarding financial management policies and procedures under the GSF Act.

The Accountable authority will also need to comply with any Treasurer’s directions and regulations issued in relation to section 3.6(1) of the GSF Act. Treasurer’s directions will be circulated as they are issued and will be published on the NSW Legislation Website and the NSW Treasury Website.

Examples of financial management policy and procedures

Below is a list of financial management policies which an agency may be expected to satisfy section 3.6 of the GSF Act.

Image: financial management policies agencies expected to satisfy

The separately named entities, such as the NSW Police Force and TCorp, and the NSW Health entities were included in the definition of a GSF agency to reflect sector nuances.

These entities do not fall neatly within the other categories in the definition of a GSF agency in section 2.4 of the Government Sector Finance Act 2018 (GSF Act).

If required, a GSF agency may prescribe volunteers, consultants and contractors as government officers in the GSF Regulation (under section 2.9(1)(e) of the GSF Act).

Contact your Treasury Customer Relationship Lead for more information regarding prescribing entities as government officers.

If an agency wishes to have entities or persons prescribe as a GSF agency or government officer (respectively) in the GSF Regulation, they should follow these steps:

  1. Refer to the Key Concepts in Part 2 of the GSF Act
  2. Refer to the Prescribing GSF agencies for the purposes of the GSF Act fact sheet
  3. If you think the guidelines apply to your circumstance, or you have further questions, you can email legislation@treasury.nsw.gov.au

Existing Treasury Circulars and Treasury Policy Papers remain intact (references to previous legislation need to be updated, however you may refer to mapping documents of the previous legislation to the GSF Act here).

Where a Circular or Policy Paper was issued as a Treasurer’s direction under the PFAA, these may still be followed as government policy until advised otherwise.

Treasurer’s directions will now be issued under the GSF Act.

Moving forward, this does not limit Treasury’s ability to issue Circulars and Policy Papers as previously.

There is one Special Deposits Account (SDA) and it is defined at section 4 of the PF&A Act. The SDA will continue under the GSF Act when section 4.15 is commenced.  The SDA is comprised of separate accounts of money. Statutory SDA Accounts may be established under legislation other than the GSF Act or the PF&A Act. Working Accounts could be established under section 13A of the PF&A Act (or section 4.17 of the GSF Act when commenced).

Functionally, the two accounts of money with in the SDA are very similar. In both instances there are criteria for what can be paid into and out of the account, investment powers relating to the money in the account, who administers the account, etc. However, a statutory SDA account and a working account are established quite differently. A statutory SDA account is established by a specific statute.  By contrast, it is the Treasurer (under section 13A of the PF&A Act) who has the power to establish a working account.  Sections 4.15 and 4.17 are intended to commence on 1 July 2019.

By broadening the scope and providing clarity to delegations and subdelegations, the GSF Act provides a framework enabling the Treasurer, Ministers, Accountable authorities and government officers to devolve decisions concerning financial management where they believe it is optimal to do so.

For example, a new capacity to authorise subdelegation for many functions empowers a Minister to choose what they wish the Accountable Authority to manage rather than having to authorise delegations for the entire agency. An appropriation expenditure function relates to expenditure of money from the Consolidated Fund under the authority of an appropriation (provided by an Annual Appropriation Act, the GSF Act or any other Act). A Minister delegating (under Division 9.2 GSF Act) an appropriation expenditure function may impose terms and conditions on the delegation and also on any subdelegation (section 5.2 of the GSF Act). 

Where no action has been taken in relation to agency delegations since the commencement of the GSF Act, transitional provisions provide that certain delegations continue in force (refer to clause 12 in Schedule 1 to the Government Sector Finance Act 2018).

For further information on delegating and subdelegating functions under the GSF Act refer to the Delegating roles and responsibilities fact sheet.

An excluded function is a function which may not be delegated or subdelegated by a Minister, GSF agency that is a person, or an Accountable Authority.

Sections 9.8 (Delegations by Treasurer of certain functions) and 9.9 (Delegations by Ministers) of the GSF Act generally provide that a function may be excluded from subdelegation by the Treasurer’s, or other Minister’s, delegation instrument (or their delegate’s instrument). Therefore, whether a function is an ‘excluded function’ or not, refers to a function a Minister (or their delegate) excludes from being delegable. For the Treasurer, a function excluded from being subdelegated also includes a function concerning the giving of Treasurer’s directions unless authorised by the Treasurer in the Treasurer’s instrument of delegation.

For all Ministers, a function under Division 9.1 (Information sharing) of the Act cannot be subdelegated.

For the purposes of section 9.10 (Delegations by GSF agencies that are persons), the section specifically refers to an “excluded function”.

In that section, an excluded function is:

  • (a) any function of a kind prescribed by the regulations as an excluded function, or
  • (b) for a GSF agency that is not a separate GSF agency—any other kind of function that the responsible Minister for the agency has directed in writing cannot be delegated. 

Also, a function may not be subdelegable under the section, where it is excluded from subdelegation under a delegation instrument, or, where the responsible Minister for the agency has directed in writing that it cannot be subdelegated.

Section 9.11 (Delegations by accountable authorities) specifically refers to an “excluded function”.

In that section, an excluded function is:

For a GSF agency

  • a) any function of a kind prescribed by the regulations as an excluded function, or
  • b) for a GSF agency that is not a separate GSF agency—any other kind of function that the responsible Minister for the agency has directed in writing cannot be delegated. 

For a university or its controlled entities 

  • a) any function of a kind prescribed by the regulations is an excluded function.

Also, a function may not be subdelegable under the section, where it is excluded from subdelegation under a delegation instrument, or, where the responsible Minister for the agency has directed in writing that it cannot be subdelegated.

There are similar provisions in section 60 and 61 of the PF&A Act. You may refer to the mapping documents for maps from the GSF Act to previous legislation and from the previous legislation to the GSF Act here.

The GSF Act provides a clear delineation between criminal offences under criminal law, and civil offences. Under the GSF Act, serious breaches of the GSF Act will be dealt with through civil recovery arrangements instead of being treated as criminal offences.

The GSF Act does not contain any criminal offence provisions, but breaches will instead rely on existing provisions in the Crimes Act and other applicable legislation. For example, theft of government resources, or fraud resulting in a loss of government resources, will be dealt with under existing and well-established offences in statute and at common law. Breaches may also be dealt with by way of employment sanctions, including those available under the Government Sector Employment Act 2013 or through employment contracts.

Yes, section 7.3 allows for the issuing of regulations which exempt GSF agencies from having to prepare financial statements.

The regulations will exempt GSF agencies by way of prescribing exemption criteria, rather than by listing the agencies to be exempted.  Treasury is presently developing the exemption criteria in consultation with the Audit Office.  The intent is that agencies should only be exempted where the cost of preparing financial statements outweighs the public benefit of being able to access financial statements.

Universities, and their controlled entities, are treated as both GSF agencies and reporting GSF agencies for the purposes of Divisions 7.2 (financial reporting) and 7.3 (annual reporting) of the GSF Act.

Accordingly, universities and their controlled entities will have to lodge annual financial statements with Treasury, prepared in accordance with the Australian Accounting Standards, the GSF Act, GSF Regulation and applicable Treasurer’s directions. However, this requirement will only come into effect when division 7.2 is proclaimed to commence, which is intended to be from 1 July 2020.

Universities prepare their financial reports for a calendar year ending on 31 December. Therefore, this obligation will first apply for the calendar year ended 31 December 2020.

Similarly, the annual reporting requirements in Division 7.3 of the GSF Act will likely commence on 1 July 2021, meaning that these obligations will apply to universities and their controlled entities from 1 January 2021 i.e. for the calendar year ended 31 December 2021. These entities will also be eligible for exemption from preparing financial statements where they satisfy the exemption criteria in the regulations (yet to be promulgated).

Universities and their controlled entities are not required to prepare their financial statements for the years ending 31 December 2018 and 31 December 2019 in accordance with the GSF Act for the reasons given above. 

We expect that universities and their controlled entities first financial statements to be prepared in accordance with GSF Act requirements will be for the year ending 31 December 2020.

Treasury will routinely publish performance information requested from GSF agencies where that information relates to State Outcomes. This information will be published in the annual budget. Treasury will not otherwise routinely publish performance information requested from GSF agencies.

Last updated: 04/07/2019