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The Financial Administration And Audit (Amendment) Act, 2003 (Bill No. 14)

A BILL

entitled

AN ACT to amend the Financial Administration and Audit Act, Cap. 174.

BE IT ENACTED by the President, by and with the advice and consent of the House, in this present Parliament assembled, and by the authority of the same, as follows>-

Short title

Amendment of article 2 of the principal Act.

1. The short title of this Act is the Financial Administration and Audit (Amendment) Act, 2003, and shall be read and construed as one with the Financial Administration and Audit Act, hereinafter referred to as “the principal Act”.
2. Article 2 of the principal Act shall be amended as follows> (a) immediately after the definition of “financial year”
therein there shall be added the following new definitions>
“ “internal audit” shall have the same meaning assigned to it by article 2 of the Internal Audit and Financial Investigations Act<
“irregularity” means an act or omission by any person in breach of a contractual agreement with the Government or in breach of any relevant provision of law or of any act the binding force of which derives from any treaty or international agreement entered into by Malta”< and
(b) for the definition of “public moneys” therein, there shall be substituted the following>
“ “public moneys” means all revenue, loan, trust and other funds received or managed or held by, for or on account of the Government, including moneys which the Government pays out or disburses from funds received from any international or supranational organization or body or from any of its institutions or bodies<”.
3. Subarticle (1) of article 4 of the principal Act shall be amended as follows>
(a) paragraph (f) thereof shall be renumbered as paragraph
(h)< and
(b) immediately after paragraph (e) thereof there shall be inserted the following new paragraphs>
“(f) for the co-funding of economic and social development programmes and initiatives from public moneys<
(g) for effecting adjustments, setoffs in and payments from any account relating to public moneys as may be required in connection with the co-financing referred to in the previous paragraph and funding from any international or supranational organization or body or from any of its institutions or bodies<”
4. Immediately at the end of article 25 of the principal Act there shall be added the following proviso>–
“Provided that the Minister may for such purposes from time to time authorise the issue of such sums out of the Consolidated Fund (not exceeding ten per cent of the sum appropriated for the financial year, or such other percnetage as the House may by resolution from time to time approve) as he may consider necessary for the purpose without the need of any further appropriation other than this Act, and he shall make a report thereon to the House within one month of such appropriation, and where the House is not sitting at the time not later than the third sitting after the House reconvenes.”
5. Immediately after article 48 of the principal Act there shall be added the following new articles 49 to 52>
C 1069

Amendment of article 4 of the principal Act.

Amendment of article 25 of the principal Act.

Addition of new articles

49 to 52 to

the principal Act.

C 1070

Measures against fraud and irregulari- ties.

49. (1) Where, on the detection of any irregularity or fraud against public moneys, a report made in terms of the provisions of the Auditor General and National Audit Office Act or the Internal Audit and Financial Investigations Act is sent or referred to a Head of Department he shall thereupon take all necessary measures for the protection of such public moneys, including the levying of administrative penalties in accordance with regulations made under article 52 and legal action for the recovery of the amount of any deficiency, loss, improper payment caused or made as a result or in the course of any such irregularity or fraud and the provisions of article
466 of the Code of Organization and Civil Procedure shall apply to any amount recoverable as aforesaid.
(2) Notwithstanding any stipulation to the contrary any bond, bank guarantee or other security given for the proper performance of any contract payable out of public moneys shall also extend to guarantee the recovery of any moneys or administrative penalties in connection with the contract and for which the person supplying the bond, bank guarantee or other securitymay be liable.
(3) Where the deficiency, loss, or improper payment as a result of the irregularity or fraud involves funds received by the Government from any international or supranational organization or body or from any of its institutions or bodies or under the terms of any treaty or other agreement between States any proceedings under this article shall take place in consultation with the person in Malta, if any, specifically charged with authorising the payment or release of such funds by the Head of Department>
Provided that the lack of such consultation shall not in any way whatsoever affect the validity of any proceedings taken under this article.
(4) Where two or more persons are responsible for the irregularity or fraud which resulted in the deficiency, loss, or improper payment those persons shall be held jointly and severally liable therefor together with any other person who, although in duty bound to do so, failed to take reasonable precautions and to exercise due diligence to prevent the irregularity or fraud.
(5) Nothing in this article or in this Part shall be construed as precluding any other person interested from

Interest to be charged.

Information

taking action, whether jointly with the Head of Department or otherwise, for the recovery of any sum recoverable under the provisions of this article.
(6) For the purposes of this article and the other articles under this Part, “Head of Department” includes any director, manager, secretary or other principal officer of a body, whether vested with legal personality or not, which is responsible for administering, holding or using public moneys or which is a recipient or beneficiary of public moneys, or who is a person having a power of representation of such a body or having an authority to take decisions on behalf of that body or having authority to exercise control within that body.
50. On any amount recoverable under article 49 there shall be charged interest equivalent to the average weighted rate applicable on the due date on the local money market for short-term public finance operations for the period during which the amount remains unpaid from the date on which it becomes payable.
51. For the purpose of recovering any moneys that may be recoverable under the provisions of article 49 any Head of Department who receives or to whom is referred a report as provided in that article may, without prejudice to the constraints imposed by professional secrecy according to law, require any person managing public moneys to provide any information in his possession relevant for the said purpose.
C 1071

Administrative

Penalties

52. The Minister may by regulations provide for
administrative penalties which may be imposed for any
irregularity, for the procedure to be followed for the imposition of such penalties and for any other matter incidental or supplementary to any of the foregoing matters >
Provided that an administrative penalty may not be greater than fifty thousand liri.”.

Objects and Reasons

The object of this Bill is to provide for measures for the protection of public moneys from fraud and other irregularities and for the recovery of any public moneys lost as a result of any such fraud or irregularities.