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Legislative Assembly for the ACT: 2003 Week 10 Hansard (25 September) . . Page.. 3677 ..

MR SMYTH (continuing):

approach set out by the auditor is, according to the auditor, that which is, or should be, adopted by all jurisdictions that operate in ways similar to the ACT.

The committee was also most concerned about the process that led to the funds for fire safety being identified as being required to be spent. It is evident from documents that the committee examined that there was, as a minimum, confusion over the way in which the funds were to be utilised. Some people suggested that the funds were to be used for social housing; others suggested that the funds were to be used for fire safety issues.

The committee emphasises that it does not accept that the former Under Treasurer could have made an error in confusing social housing with fire safety issues when he wrote to the chief executive of Urban Services. Further, the committee judges that the Treasurer's explanation of the use of the Treasurer's Advance for fire safety issues was inadequate. The committee endorses the approach to the use of the Treasurer's Advance as explained by the Auditor-General and believes that the FMA should be amended to incorporate these elements.

The second of the two issues I mentioned a moment ago concerns the timing of the expenditure from the Treasurer's Advance. As the Auditor-General explained to the committee, technically funds that have been appropriated are spent when they are transferred from the Central Financing Unit bank account to the account of the relevant department. But, as the Auditor-General went on to explain, this approach defies logic. The purpose of appropriations is for money to be spent on the purchase of goods or services or something else. Appropriations are not intended simply to transfer money from one bank account to another.

An associated aspect of this matter that concerned the Auditor-General relates to whether the funds obtained from the Treasurer's Advance were actually spent in the relevant financial year. Again, in evidence to the committee, the auditor noted that the transfer of funds from CFU's account to Housing's account contravened the concept of the Treasurer's Advance. He said that it did not have to be transferred at that stage because Housing had nothing to spend it on.

The committee concluded that, because of the vagueness of the legislation, it is not possible to make a finding on this aspect of the use of the Treasurer's Advance, that is, whether the Treasurer's actions were illegal. Nevertheless, the committee remains concerned that there is such uncertainty about the FMA as it relates to the Treasurer's Advance. Consequently, the committee has made a specific recommendation that section 18 of the Financial Management Act be reviewed to clarify the purpose and use of the Treasurer's Advance. There are a number of other matters on which the auditor made comment and prepared recommendations. Many of these recommendations relate to management discussion and analysis reports contained in annual reports, while others deal with more mechanical or process matters.

What I would like to turn to now are the comments and findings made by the auditor on territory agencies-58 of them, although I will comment on only a couple of these. The context in which I want to make the following comments concerns the information that is provided to the community in annual reports from agencies. In two instances, Actew Corporation and Totalcare Industries Ltd, the Auditor-General was very concerned about

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