Commencement: 18 May 2009

REPUBLIC OF VANUATU

PUBLIC FINANCE AND ECONOMIC MANAGEMENT (AMENDMENT) ACT NO. 15 OF 2009

Arrangement of Sections

1. Amendment
2. Commencement

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REPUBLIC OF VANUATU

Assent: 22/04/2009
Commencement: 18/05/2009

PUBLIC FINANCE AND ECONOMIC MANAGEMENT (AMENDMENT) ACT NO. 15 OF 2009

Be it enacted by the President and Parliament as follows- 

1 	Amendment 

The Public Finance and Economic Management Act [CAP 244] is amended as set out in the Schedule. 

2 	Commencement 

This Act commences on the day on which it is published in the Gazette. 

SCHEDULE

AMENDMENTS OF THE PUBLIC FINANCE AND ECONOMIC MANAGEMENT ACT [CAP 244]

1 	Section 1 

Repeal the section. 

2 	Subsection 2(1) (definitions of capital transactions, current transactions, Director-General, expenditure, First Appropriation Bill, generally accepted accounting principles and practice, Government, Government agency, head of ministry, MFEM, Minister, Ministry, Outcome and provision, public interest, public money, public resources, State and trading revenue) 

Repeal the definitions. 

3 Subsection 2(1) 

Insert in their correct alphabetical positions, the following definitions 

“ ‘agency’ means: 

(a) a Ministry; or 

(b) an office of a Government Minister; or 

(c) an office or body established by or under the Constitution; or 

(d) an office or body established by or under an Act of Parliament; or 

(e) a prescribed agency; 

‘Annual Appropriation Act’, in relation to a financial year, means an Act as required by Article 25(1) of the Constitution that: 

(a) 	authorises amounts to be issued from the Public Fund and applied to programs and activities of agencies in that financial year ; and 

(b) 	specifies the programs and activities for which the amounts may be issued and applied; 

‘Appropriation Act’ means: 

(a) an Annual Appropriation Act; or 

(b) a Supplementary Appropriation Act; or 

(c) the Public Finance and Economic Management Act [CAP 244] and any other Act that contains a standing appropriation; or 

(d) any other Act that authorises amounts to be issued from the Public Fund and applied to programs and activities of agencies in a financial year; 

‘Director-General’ means the Director-General of the Finance Ministry; 

‘Finance Ministry’ means the Ministry responsible for finance; 

‘financial emergency’ means: 

(a) a situation where the financial viability of the Government is threatened by a lack of funding; or 

(b) a situation where the Government because of a lack of funding is unable to provide basic essential services to the people of Vanuatu to alleviate significant hardship; 

‘Government’ means the Government of the Republic of Vanuatu; 

‘Government Minister’ means a Minister of the Government including the Prime Minister; 

‘head of an agency’ means: 

(a) for a Ministry, the Director-General of the Ministry; or 

(b) for an Office of a Government Minister, the person appointed by the Government Minister to be the head of the Office or, if an appointment is not in force, the Government Minister; or 

(c) for an office or body established by or under the Constitution, the person in charge of the office or body; or 

(d) for an office or body established by or under an Act, the person in charge of the office or body; or 

(e) for a prescribed agency, the person identified by the regulations as the head of the agency; 

‘Minister’ means the Minister responsible for finance; 

‘Ministry’ means a Ministry of the Government including the Office of the Prime Minister; 

‘prescribed agency’ means a body, organisation or group of persons prescribed by the regulations for the purposes of this definition; 

‘public resources’ means real or personal property, other than public money, that is held by: 

(a) the State; or 

(b) any person for or on behalf of the State; 

‘public money’ means money collected, received or held by: 

(a) the State; or 

(b) any person for or on behalf of the State; 

and includes trust money referred to in paragraph 46(1)(f); 

‘State’ means the Republic of Vanuatu; 

‘Supplementary Appropriation Act’ means a Supplementary Appropriation Act referred to in section 34; 

‘trust money’ means money that is deemed to be trust money under section 46;” 

4 	Subsection 2(2) 

Repeal the subsection. 

5 	Part 2 

Repeal the Part, substitute 

“PART 2 	RESPONSIBILITIES
 
3 	RESPONSIBILITIES OF THE MINISTER 

(1) 	The Minister is responsible for deciding the economic, financial and fiscal policy of the Government. 

(2) 	The Minister is responsible for authorising amounts that have been appropriated by an Appropriation Act to be drawn down from the Public Fund in accordance with the requirements prescribed by the regulations. 

(3) 	The Minister has such other responsibilities as are provided for by or under this Act. 

4 	RESPONSIBILITIES OF THE DIRECTOR-GENERAL 

(1) 	The Director-General is responsible to the Minister for ensuring that the Finance Ministry implements the economic, financial and fiscal policy of the Government. 

(2) 	The Director-General is responsible for issuing instructions under section 63. 

(3) 	The Director-General has such other responsibilities as are provided for by or under this Act. 

5 	RESPONSIBILITIES OF THE HEADS OF AGENCIES 

(1) 	The head of an agency must manage the affairs of the agency in a way that promotes the efficient, effective and ethical use of the public resources and the public money for which the head of the agency is responsible. 

(2) 	The regulations may make provision for ensuring or promoting: 

(a) 	the efficient, effective and ethical use of public resources and public money; and 

(b) 	proper accountability for the use and management of public resources and public money.” 

6 	Part 3 (heading) 

Delete the heading, substitute 

“PART 3 	REPORTS ON ECONOMIC, FINANCIAL AND FISCAL POLICY”.
 
7 	Section 9 

(a) 	Delete “or prior to”, substitute “or as soon as practicable after” 

(b) 	Delete “including policies affecting the key variables stated in sections 17 and 18” 

8 	Paragraph 10(1)(a) 

Delete “, and in particular provide for the principal variables specified in sections 17 and 18;”, substitute “; and” 

9 	At the end of paragraph 10(1) (b) 

Add “and” 

10 	Paragraph 10(1)(c) 

Repeal the paragraph. 

11 	At the end of paragraph 10(2)(a) 

Add “and” 

12 	Subsection 11(1) 

Delete “of the first Appropriation bill in each financial year”, substitute “of the Bill for an Annual Appropriation Act” 

13 	Paragraph 11(2)(a) 

Delete “update”, substitute “statement” 

14 	At the end of paragraphs 11(2)(a) and (b) 

Add “and” 

15 	At the end of paragraph 11(2)(c) 

Delete “;”, substitute “.” 

16	Paragraph 11(2)(d) 

Repeal the paragraph. 

17 	Subsection 12(1) 

Delete “for each separate appropriation required by section 31(2)” 

18 	Subsection 12(2) 

Repeal the subsection. 

19 	Subsection 12(3) 

Delete “the Appropriation Bill”, substitute “the Bill for an Annual Appropriation Act” 

20 	Paragraph 12(4)(a) 

Delete “the last Appropriation Bill”, substitute “the Bill for an Annual Appropriation Act for the previous financial year; and” 

21 	Subsection 13(1) 

Delete “of the first Appropriation Bill”, substitute “of the Bill for an Annual Appropriation Act” 

22 	Subsection 13(3) 

Delete “including all the information required under section 24” 

23 	Section 14 

Repeal the section, substitute 

“14 	ECONOMIC AND FISCAL STATEMENT 

(1) 	The Minister must prepare an economic and fiscal statement for each financial year. 

(2) 	The statement must: 

(a) 	contain an economic and fiscal statement for the financial year to which the statement relates (“statement financial year”); and 

(b) 	contain an economic and fiscal statement for each of the 2 financial years following the statement financial year; and 

(c) 	state the date on which the statement was prepared. 

(3) 	The statement must be laid before Parliament on the day of introduction of the Bill for an Annual Appropriation Act for the statement financial year.” 

24 	Subsection 15(1) 

Delete “Ministry”, substitute “Finance Ministry” 

25 	Subsection 16(1) 

Delete “the appointment of the polling date which includes the information referred to in sections 17 and 18”, substitute “the gazettal of the polling date” 

26 	Sections 17, 18, 19, 20 and 21 

Repeal the sections, substitute 

“17 ANNUAL FINANCIAL STATEMENTS OF GOVERNMENT 

(1) 	As soon as practicable after the end of each financial year and not later than 3 months after the end of that financial year, the Director-General must prepare financial statements of the Government for that financial year. 

(2) 	The financial statements must contain the information prescribed by the regulations. 

(3) 	The Director-General must give the financial statements to the Auditor-General as soon as practicable after they are prepared. 

(4) 	As soon as practicable after receiving financial statements, the Auditor-General must examine the statements and prepare an audit report. 

(5) 	The Auditor-General must give a copy of the report to the Minister. 

(6) 	The Minister must table the financial statements and the Auditor General’s report in the Parliament as soon as practicable after receiving the report. 

18 	STATEMENT OF APPROPRIATIONS 

(1) 	The Director-General must include in the financial statements prepared under section 17 an account to be called the “Statement of Appropriations”. 

(2) 	The Statement of Appropriations must specify the amounts appropriated for each financial year under all Appropriation Acts and the amounts drawn down from the Public Fund.” 

27 	Subsection 22(3) 

Delete “ministries, Government agencies and Government projects”, substitute “agencies” 

28 	At the end of subparagraphs 22(4)(b)(i) and (ii) 

Add “and” 

29 	Section 23 

Repeal the section, substitute: 

“23 BUDGET PROCESS 

(1) 	Not less than 14 days before the introduction of a Bill for an Annual Appropriation Act, the Minister must provide to the Council for the financial year to which the Bill relates and for each of the 2 financial years following that financial year a program of expenditure for each agency’s programs and activities including: 

(a) 	details of the estimated revenue of the State; and 

(b) 	details of the expenditure estimates for each agency; and 

(c) 	the State’s debt management responsibilities and, if necessary, the details of a financial plan to meet those responsibilities. 

(2) 	Not less than 7 days before the introduction of a Bill for an Annual Appropriation Act, the Council must return to the Minister a fiscally responsible budget.” 

30 	Part 6 

Repeal the Part. 

31 	Subsections 30(3) and (4) 

Repeal the subsections. 

32 	At the end of paragraphs 30(2)(a) and (5)(a) 

Add “and” 

33 	At the end of paragraphs 31(1)(a) and (b) 

Add “and” 

34 	Part 8 

Repeal the Part, substitute 

“PART 8 	APPROPRIATIONS

32 	APPROPRIATION REQUIRED 

(1) 	The State must not incur any expense or liability unless the expenditure in relation to the expense or liability is capable of being charged to a program or activity of an agency. 

(2) 	A Bill for an Annual Appropriation Act or a Supplementary Appropriation Act must indicate the proposed expenditure under programs and activities of agencies. 

(3) 	Any draw down of amounts from the Public Fund made under a standing appropriation must indicate the programs and activities of the agencies for which the amounts are drawn down. 

(4) 	The authorisation of the Minister to draw down funds from the Public Fund in a financial year lapses at the end of that financial year, but the unexpended balance (if any) of any amount authorised to be drawn down may be dealt with in accordance with section 37. 

32A 	APPROVED PROGRAMS AND ACTIVITIES 

(1) 	The Minister must approve the programs and activities of an agency for the purposes of appropriating amounts for those programs and activities in a financial year. 

(2) 	An approval must be in writing. 

33 	ANNUAL APPROPRIATION ACT 

(1) 	So far as practicable, the Bill for an Annual Appropriation Act is to be introduced into the Parliament at least 30 days before the start of the financial year to which the Bill relates. 

(2) 	If an Annual Appropriation Act has not commenced by 1 January of the financial year to which it relates (“the current financial year”), the Minister may draw down from the Public Fund such amounts as are necessary for carrying out the services of the Government at a level not exceeding the level of those services in the previous financial year for the period ending on 31 March of the current financial year or until the Annual Appropriation Act commences, whichever is the earlier. 

34 	SUPPLEMENTARY APPROPRIATION ACTS 

(1) 	At any time in a financial year, the Government may introduce into the Parliament a Bill for an Act that authorises amounts to be issued from the Public Fund and applied to programs and activities of agencies in that financial year. 

(2) 	The Bill must specify for the financial year: 

(a) 	any additional amounts to be issued from the Public Fund; and 

(b) 	any amounts to be issued from the Public Fund, being amounts that had previously been appropriated. 

(3) 	The Bill must specify the programs and activities of the agencies for which amounts referred to in paragraphs (2)(a) and (b) may be issued and applied. 

(4) 	The Bill must also specify for amounts referred to in paragraph (2) (b) the programs and activities of the agencies for which the amounts had previously been appropriated. 

(5) 	The Bill must be passed by the Parliament before an amount specified in the Bill is issued from the Public Fund. 

(6) 	The Bill is in addition to the Bill for an Annual Appropriation Act. 

34A 	NO TRANSFER OF APPROPRIATED AMOUNTS BETWEEN AGENCIES 

(1) 	An amount that has been appropriated for a program or an activity of an agency in a financial year cannot be drawn down from the Public Fund for a program or activity of another agency in that or any other financial year. 

(2) 	However, an amount that has been appropriated for a program or an activity of an agency in a financial year may be appropriated by a Supplementary Appropriation Act for a program or activity of another agency in that financial year. 

34B 	TRANSFERS OF APPROPRIATED AMOUNTS WITHIN AN AGENCY 

(1) 	The head of an agency may transfer an amount, or a part of an amount, that has been appropriated for an activity of the agency in a financial year (“the losing activity”) to another activity of the agency in that financial year if: 

(a) 	the Director-General is satisfied that the transfer is not likely to adversely affect the losing activity; and 

(b) 	the Director-General has given his or her prior written approval to the transfer. 

(2) 	The head of an agency may transfer an amount, or a part of an amount, that has been appropriated for a program of the agency in a financial year (“the losing program”) to another program of the agency in that financial year if: 

(a) 	the Director-General is satisfied that the transfer is not likely to adversely affect the losing program; and 

(b) 	the Director-General has given his or her prior written approval to the transfer. 

(3) 	The Minister must lay before the Parliament a statement showing the particulars of a transfer under subsection (1) or (2) as soon as practicable after the transfer has been made. 

34C 	STANDING APPROPRIATION FOR A DECLARED STATE OF EMERGENCY OR A FINANCIAL EMERGENCY 

(1) 	If: 

(a) 	either: 

(i) 	a state of emergency has been declared under Article 69 of the Constitution; or 

(ii) 	the Minister is satisfied that a financial emergency exists; and 

(b) 	there is no appropriation, or an insufficient appropriation, for alleviating the declared state of emergency or the financial emergency; and 

(c) 	an Appropriation Act cannot be passed by the Parliament within a reasonable time so as to make funds available for alleviating the declared state of emergency or the financial emergency; 

the Minister may, with the prior approval of the Council of Ministers, authorise amounts to be drawn down from the Public Fund for the purposes of alleviating the declared state of emergency or the financial emergency. 

(2) 	The total amount to be drawn down from the Public Fund in a financial year under subsection (1) must not exceed 1.5 % of the total amount appropriated by the Parliament for that financial year. 

(3) 	The Public Fund is appropriated accordingly for the purposes of this section. 

(4) 	The Minister must lay before the Parliament a statement showing the particulars of any expenditure made under the standing appropriation as soon as practicable after the expenditure has been made. 

35 	STANDING APPROPRIATION OF TRUST MONEY 

Trust money is payable out of the Public Fund, which is appropriated accordingly. 

36 	AGREEMENTS FOR NET APPROPRIATIONS 

(1) 	The Minister may enter into agreements for the purposes of programs or activities in Appropriation Acts that are marked "net appropriation". 

(2) 	If: 

(a) 	the Minister is responsible for the program or activity, the agreement is to be made with the head of the agency for which the appropriation is made; and 

(b) 	in any other case, the agreement is to be made with the Minister who is responsible for the program or activity. 

(3) 	An agreement need not relate to a particular Appropriation Act or Acts and may be made for any period, including a period longer than a financial year. 

(4) 	The Minister may at any time cancel or vary an agreement, without the consent of the other party. 

37 	TRANSFER AND SUBSEQUENT EXPENDITURE OF UNEXPENDED APPROPRIATIONS 

(1) 	If: 

(a) 	provision has been made in an Annual Appropriation Act for expenditure by an agency; and 

(b) 	the expenditure has not been incurred by the agency during the financial year to which the Annual Appropriation Act relates; 

 the Minister may, with the prior approval of the Council, direct that the unexpended amount or a portion of it be allocated to the agency for expenditure in the next financial year for the purpose for which the amount was appropriated. 

(2) 	The Minister must lay before the Parliament a statement showing the particulars of any expenditure allocated to an agency under subsection (1) as soon as practicable after the allocation has been made.” 

35 	Sections 39 and 40 

Repeal the sections. 

36 	Subsection 41(1) 

(a) 	Delete “ministry” (twice occurring), substitute “agency”; 

(b)	 Delete “6”, substitute “3” 

37 	Subsection 43(4) 

Delete “subsection (5) and” 

38 	Subsection 43(5) 

Repeal the subsection. 

39 	Subsection 43(6) 

Delete “a ministry or Government agency”, substitute “an agency” 

40 	Subsection 44(5) 

Repeal the subsection. 

41 	Subsection 46(3) 

Repeal the subsection, substitute 

“(3) 	All trust money is the responsibility of the Director-General.” 

42 	Section 49 

(a) 	Delete “MFEM”, substitute “the Director-General”; 

(b) 	After “or” (second occurring), insert “that” 

43 	At the end of paragraphs 54(2)(a),(b),(c),(d),(e),(f) and (g) 

Add “and” 

44 	At the end of paragraphs 58(1)(a) and (b) 

Add “and” 

45 	Paragraphs 60(1)(a) and (b) 

Repeal the paragraphs, substitute 

“(a) 	after consultation with the Director-General of MFEM; and 

(b) 	where such guarantee or indemnity is consistent with the principles of responsible fiscal management set out in section 22; and 

(c) 	with the prior approval of a simple majority of Parliament.” 

46 	Subsection 60(3) 

After “Minister”, insert “is not required to obtain the approval of Parliament, but” 

47 	Subsection 62(1) 

(a) 	Delete “any ministry or entity that manages any financial liability”, substitute “the head of an agency that manages any public money”; 

(b) 	Delete “ministry”, substitute “Finance Ministry” 

48 	Subsection 62(2) 

Delete “any ministry or entity”, substitute “The head of an agency” 

49 	Section 63 

Delete “the recognized financial disciplines provided for in this Act”, substitute “this Act or the regulations made under this Act” 

50 	Paragraph 64(1)(a) 

(a) 	Delete “a ministry”, substitute “an agency”; 

(b) 	Delete “liability”, substitute “public money” 

51 	Sections 67 and 68 

Repeal the sections, substitute 

“67 	THE DIRECTOR-GENERAL MAY DELEGATE POWERS 

(1) 	The Director-General may delegate to an officer of the Finance Ministry all or any of his or her powers, duties or functions under this Act, other than this power of delegation. 

(2) 	A delegation under this section: 

(a) 	must be made in writing; and 

(b)	may be made either generally or subject to express limitations or conditions; and 

(c)	 may be given for a specified period. 

(3) 	The Director-General remains responsible for actions taken under a delegation made under this section.” 

52 	Section 70 

Add at the end 

“(2) 	Without limiting this section, regulations may be made prescribing penalties not exceeding VT 100,000 for offences against or a contravention of any of the regulations”