Financial management

Which DEECA agencies are subject to the FMA and Directions?

To determine whether your agency is subject to the reporting requirements under the Financial Management Act (FMA) and the Standing Directions, you can complete an assessment available on the Department of Treasury and Finance (DTF) website. You can also talk to your DEECA governance support/relationship management team for more information.

What are the Standing Directions 2018?

The Directions were issued by then Assistant Treasurer (now Minister for Finance) under section 8 of the FMA. They specify public sector agency responsibilities to achieve a high standard of public financial management and accountability.

Further to the Directions are the Instructions supporting the Standing Directions 2018 (Instructions) and Guidance supporting the Standing Directions 2018 (Guidance). Both are issued by the Department of Treasury and Finance (DTF).

The Instructions are mandatory and provide more detailed requirements in specific areas of risk while the Guidance is non-mandatory and provides supporting information in relation to the interpretation and implementation of the Directions and Instructions.

DTF website also contains information relating to other legislation, standards and policies, such as the Financial Reporting Directions(FRDs) that agencies should take into consideration.

The Directions and their associated Instructions, FRDs are mandatory for reporting agencies, except as provided in Directions 1.2.1 and 1.2.2 or under an exemption approved under Direction 1.5.

Further information, including the Directions, Instructions and Guidance, can be found on DTF website at Standing Directions 2018 Under The Financial Management Act 1994 | dtf.vic.gov.au.

DEECA Portfolio Financial Management Compliance Framework

The DEECA Portfolio Financial Management Compliance Framework (PFMCF) is an alternate financial management compliance framework to the Directions, that has been developed in response to the need to better accommodate the smaller agencies in DEECA’s portfolio that are low risk, low profile, have low complexity of operations and limited income/expenditure.

Agencies must be granted a full exemption from complying with the Directions to comply with the DEECA PFMCF.

For information on eligibility, application and conditions of complying with the DEECA PFMCF, refer to the DEECA Portfolio Financial Management Compliance Framework Explanatory Guide (DOCX, 630.3 KB).

Matters outside the scope of the Directions

There are a range of matters in respect of which public sector agencies may need to seek advice from their portfolio departments from time to time that are outside the scope of the Directions or the DEECA PFMCF.

In these instances, agencies should seek advice from their portfolio relationship contact. These matters can include, but are not limited to:

scope, interpretation and application of purposes and powers as defined in enabling legislation (what agencies are able to do without requiring express external approval)
operational performance (delivery of ongoing core services)
delivery of specifically funded initiatives – progress in respect of agreed Key Performance Indicators (cost, quality, quantity and timeliness)
proposals to materially alter operating business models, including major sources and quantum of revenue.

Setting up financial policies and procedures

The DEECA Setting up financial policies and procedures guide has been designed to assist board members, executive officers and staff of public bodies to establish and maintain effective financial policies and procedures in line with the Directions and DEECA PFMCF. Agencies are responsible for ensuring they have the appropriate policies, procedures and systems in place to ensure compliance with all applicable Directions.

The DEECA Setting up financial policies and procedures guide includes:

background information referencing the Victorian Government’s financial management compliance framework
tools for setting up financial policies and procedures
links to useful resources
maintaining effective financial policies and procedures.

Access the guide:
DEECA Setting up financial policies and procedures (DOCX, 604.5 KB)

Other financial management requirements

The Department of Treasury and Finance website has a section on Financial Management of Government with links that include:

Annual reporting

In addition to their financial management obligations, public bodies are required to submit an annual report in accordance with the FMA.