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The Financial Administration And Audit (Amendment) Act (Act No. I Of 2004)

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, 2004, 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
(i)< 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<
(h) for the preparation, codification and publication of such sets of accounting standards, methodologies, policies and procedures as may from time to time be deemed necessary or expedient for the better carrying the provisions of this Act into effect<”.
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
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Amendment of article 4 of the principal Act.

Amendment of article 25 of the principal Act.

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Addition of new articles

49 to 52 to

the principal Act.

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>

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

Interest to be charged.

Information.

Administrative penalties.

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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 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.
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.”.
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Amendment of the Set-off and Netting on Insolvency Act, Cap. 459.

6. Immediately following article 6 of the Set-off and Netting on
Insolvency Act, there shall be inserted the following new article>

“Power to make regulations.

7. (1) The Minister may make regulations to give effect to the provisions of this Act and, without prejudice to the generality of the foregoing, may in particular make regulations to transpose and implement any Directive of the European Parliament and of the Council on financial collateral arrangements< and, in particular, regulations relating to any aspect concerning financial collateral agreements and similar arrangements< such regulations may define financial collateral, may provide for the rights and obligations of the collateral taker and the collateral provider, establish formal requirements and rules on the enforcement of financial collateral agreements and similar arrangements, the recognition of title and the non- applicability of certain rules of the Civil Code and of legal provisions relating to bankruptcy and insolvency, and such regulations may also provide for relative rules on conflict of laws and for any other matters as are incidental or connected thereto.
(2) Regulations made under this article may be made and published in the English language only.”.
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Passed by the House of Representatives at Sitting No. 104 of the 23rd February,
2004.
ANTON TABONE

Speaker

RICHARD J. CAUCHI

Clerk to the House of Representatives

Ippubblikat mid-Dipartiment ta’ l-Informazzjoni (doi.gov.mt) — Valletta — Published by the Department of Information (doi.gov.mt) — Valletta

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press

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