Public Finance and Audit Act 1987

Who is affected and who decides

• Who pays: the Consolidated Account funds most State obligations; money required under State guarantees is payable from the Consolidated Account (s5, s19(4)). Public authorities and publicly funded bodies must prepare financial statements and may be liable for audit fees (s23, s39). Individuals or entities that ignore summonses or obstruct audits face penalties (s34(2)).
• Who decides: the Treasurer holds extensive powers (establishing accounts, investments, consent for semi‑government finance, guarantees, instructions) (s8, s11, s18, s19, s41). The Governor has a defined appropriation power (s12) and appointment/removal mechanics for the Auditor‑General operate via Governor and Parliament (s24, s26, s27). The Auditor‑General decides what audits, reviews and reports to conduct and publish (s31–s38).
• What behaviour changes: public authorities must keep accounts, prepare and certify financial statements within time limits, comply with Treasurer’s instructions and be prepared for performance/financial audits (s23, s41). Semi‑government authorities must obtain Treasurer consent before entering most financial arrangements (s18). Persons dealing with semi‑government authorities may rely on contractual terms without needing to monitor how authorities apply funds (s18(5)).

Official purpose claim and testing it against costs, incentives and trade‑offs

• Official rationale: the Act’s long title states it exists to regulate receipt/expenditure of public money and to provide for auditing and examination of the efficiency, economy and effectiveness of use of public resources. The Act implements that by centralising accounting rules, setting appropriation/borrowing rules and creating statutory audit powers (see long title; s5–s6; s31–s32; s22–s23).

• Compliance burden and enforcement: the Act creates concrete compliance duties for public authorities (deliver statements within 42 days (s23(1)); certificates signed by senior officers (s23(2a)); penalties for false certification (s23(2b))). Failure to comply with audit summonses attracts criminal penalties or court orders (s34(2)(f)–(g)). Non‑compliance with Treasurer’s instructions is an offence (s41(2)). Confidentiality and non‑disclosure obligations for recipients of Auditor‑General material carry significant criminal penalties (s32(1c), (1e)). Those provisions impose administrative effort and potential legal risk on public authorities and third parties.

• Discretion and centralisation: the Treasurer has broad discretionary powers (establish/vary special deposit accounts, direct credits, invest public money, consent to financial arrangements, give guarantees, issue instructions) (s8, s11, s18, s19, s41). Delegations are permitted but revocable at will by the Treasurer (s42). Those mechanics centralise fiscal decision rights in the Treasurer’s office and create policy and operational discretion in that office.

• Fiscal and contingent liability mechanics: the State’s guarantees and indemnities (s19) create potential contingent calls on the Consolidated Account (s19(4)). The Act allows charging fees for guarantees (s20), which creates an offsetting revenue stream but leaves the State ultimately liable. These are concrete mechanisms that convert contingent private or semi‑government borrowing risk into State fiscal exposures when guarantees are called.

• Effects on private parties and market counterparts: the requirement that counterparties to semi‑government financial arrangements need not investigate how the authority applies the money (s18(5)) reduces inquiry costs for counterparties but also shifts operational oversight responsibility toward the State/Treasurer (s18). Consent and guarantee arrangements (s18–s19) change the credit profile of semi‑government authorities for market participants when Treasurer consent or guarantees are provided.

• Opportunity costs and trade‑offs: centralising consent for financial arrangements and giving the Treasurer control over guarantees and investments (s18–s19, s11) may reduce duplication and increase uniform oversight, but it also concentrates decision–making power which can delay or alter the choices available to individual agencies and semi‑government authorities. Requiring standardised reporting and audits (s22–s23, s31–s36) produces information useful to Parliament and the public but consumes time and resources within agencies.

• Implementation risks and legal clarity: the Act cross‑refers to other statutes (Financial Agreement, SAFA, Local Government Act 1999) and authorises subsidiary regulations and Treasurer’s instructions (s11, s17, s41, s43). Those instruments will determine many practical details. The Act gives the Auditor‑General statutory powers to inspect, summon and require evidence (s34) and provides remedies where obligations are not met; operational practice will depend on resourcing and administrative processes.

Concrete points readers can act on

• Public authorities should ensure they meet the timing and certification requirements for financial statements and maintain records to satisfy Auditor‑General inspections (s22–s23, s34).
• Semi‑government authorities should identify when Treasurer consent is required for financial arrangements and budget for any guarantee fees or indemnities that may be imposed (s17–s20).
• Entities contracting with semi‑government authorities should note the statutory provision that they are under no obligation to investigate the authority’s internal application of funds (s18(5)).

Key source references cited above: long title; sections 5–16, 17–21, 22–23, 24–36, 38–41, 41AA, 41A, 42–43, and Division/Clauses described in the Act text.