Vanuatu Sessional Legislation
Commencement: 01 July 1998
REPUBLIC OF VANUATU
PUBLIC FINANCE AND ECONOMIC MANAGEMENT ACT
NO. 6 OF 1998
Arrangement of Sections
PART I - PRELIMINARY
PART II - ECONOMIC FISCAL AND FINANCIAL MANAGEMENT
3. Director-General of Finance and Economic Management
4. Responsibilities of Director-General and Ministers
5. The Director-General may delegate powers
6. Reporting responsibilities of Director-General
7. Generally accepted accounting principles and practice
PART III - ECONOMIC FINANCIAL AND FISCAL POLICY
8. Reporting responsibilities of Government
9. Economic and financial policy
10. Budget policy statement
11. Fiscal strategy report
13. Current year fiscal update
14. Economic and fiscal update
15. Half-year economic and fiscal update
16. Pre-election economic and fiscal update
17. Economic forecasts data
18. Fiscal forecasts data
19. Availability of financial figures
20. Reporting entity
PART IV - FISCAL RESPONSIBILITY
22. Principles of responsible fiscal management
PART V - BUDGET PROCESS
23. Budget process
PART VI - REPORTING REQUIREMENTS
24. Reporting requirements
25. Statement of accounts
26. Appropriation account
27. Ministry's accounts
28. Ministerial Offices
29. Responsibilities of Heads of Ministries
PART VII - STATEMENTS OF RESPONSIBILITY
30. Statements of responsibility
31. Publication, inspection, and purchase of statements and reports
PART VIII - APPROPRIATIONS
32. Appropriation required
33. Timing of first Appropriation Bill for any financial year
34. Transfer between provisions
36. Net Appropriation
37. Transfer and subsequent expenditure of unexpended appropriations
38. Additional revenue
PART IX - AUTHORISATION OF EXPENDITURE
39. Authorisation and certification of expenditure
41. Refunds and corrections
42. Writing off losses
PART X - PUBLIC MONEY
43. Public money
44. Balances may be invested
45. Account or fund may be overdrawn
PART XI - TRUST MONEY
46. Trust money
47. Establishment of bank accounts for trust money
48. Investment of trust money
49. Payment of interest on trust money
50. Fee for service
51. Unclaimed trust money
PART XII - PUBLIC MONEY OUTSIDE VANUATU
52. Overseas imprest and other special accounts
PART XIII - LOANS AND SECURITIES
53. Government not to borrow except under statute
54. Minister may raise loans
55. Repayment or conversion of loans
56. Minister may appoint underwriters and managers for loans
57. Liability for debt of State
58. Power to lend money
59. Authority for the giving by the State of guarantees and indemnities
60. Power to give guarantees and indemnities
61. Payment of principal and interest on loans
PART XIV - INFORMATION AND COMPLIANCE
62. Power of Director-General to obtain information
63. Ministry instructions
PART XV - OFFENCES AND SANCTIONS
65. Obligation to report
66. Penalties for offences
PART XVI - MISCELLANEOUS
68. Act to prevail
REPUBLIC OF VANUATU
PUBLIC FINANCE AND ECONOMIC MANAGEMENT ACT
NO. 6 OF 1998
An Act -
(a) to ensure effective economic, fiscal, and financial management and responsibility by Government;
(b) to provide accompanying accountability arrangements, together with compliance with those requirements;
(c) to require the Government to produce -
(i) statements of economic policy;
(ii) confirmation of adherence to fiscal disciplines prescribed under this Act;
(iii) budget policy statements;
(iv) economic and fiscal forecasts and updates;
(v) financial management information;
(vi) comprehensive annual reports.
BE IT ENACTED by the President and Parliament as follows:
1. (1) This Act applies to -
(a) public resources and public money;
(b) ministers, ministerial offices and ministries
(2) The minister may with the concurrence of the Council and by notice published in the Gazette extend the application of this Act to a Government agency to which this Act does not apply or exclude a government agency or subsidiary of an agency from the application of this Act and may in like manner revoke any such notice.
(3) In the application of this Act to a government agency every reference to a ministry shall be read as if it were a reference to a government agency and every reference to a head of ministry shall be read as a reference to the corresponding person in a government agency.
2. (1) In this Act, unless the context otherwise requires -
"capital transactions" are defined as being more than a amount to be used in the process of production for more than one year;
"Council" means the Council of Minister in accordance with Article 40 of the Constitution;
"current transactions" are all other transactions other than capital transactions;
"Director-General" means the Director-General of the Ministry of Finance and Economic Management appointed under section 3;
"estimates" means the statements of the State's proposed expenditure of public money during, any financial year;
"Expenditure" means all non repayable payments by Government, whether requited or unrequited and whether for current or capital transactions and includes:
(a) any loan obtained for or given by; or
(b) any security provided to or by,
the Government, a minister, ministerial office, ministry or Government agency;
"Financial year" means a period of 12 months ending with the 31st day of December;
"First Appropriation Bill" means the first Appropriation bill for a financial year;
"generally accepted accounting principles and practice" means -
(a) financial reporting standards approved by the International Federation of Accountants to apply in relevant jurisdictions, as applicable to Governments and their Agencies;
(b) in relation to matters for which no provision or no sufficient provision is made, then such standards, accounting policies or principles having the authoritative support of the accounting profession;
"Government" means the Executive Government of Vanuatu established under Chapter 7 of the Constitution;
"Government agency" includes:
(a) an office entity and instrument of the Executive Government other than a ministry or a Minister;
(b) a local government council;
(e) a municipal council;
(d) a corporation (whether established by statute or otherwise) and any subsidiary of that corporation that:
(i) is substantially owned or controlled by Government;
(ii) has a significant financial interdependence with the State by virtue of an allocation in an Appropriation Act; or
(iii) has significant use or control of public money;
(e) any other instrument, council or Organisation notified under section 1(2);
"grants" means unrequited: involving payment in return for a quid pro quo, non-repayable, non-compulsory receipts from other Governments or international institutions;
"head of ministry" means the person appointed as the Director- General of a ministry under the Public Service Act 1998;
"MFEM" means the Ministry of Finance and Economic Management;
"Minister" means the Minister from time to time responsible for Finance;
"Ministry" means a ministry of Government including a department within a ministry and includes a State appointed office, that has money appropriated to it by Parliament for the purpose of its expenditure;
"Outcome" and "provision" means the production of goods and services by a Government department;
"Public Fund" means the bank account or accounts operated in accordance with section 43;
"public interest" means something that is to the advantage direct or indirect of the people of the Republic of Vanuatu;
"public money" means all the resources and entitlements owned by, owed to, or held by the State, or held by any ministry, agency, or any other person for or on behalf of the Government, a ministry or agency and includes public resources;
"public resources" means real or personal property that is the property of the state and includes public money;
"revenue" means all non-repayable Government receipts, other than grants;
"State" means the State in right of the Government of Vanuatu, and includes every ministry, ministerial office and Government agency;
"State debt" means any loan, moneys or other debt or security whatsoever owed by the State in accordance with section 57;
"trading revenue" means income received from any source other than Revenue derived from taxation or by appropriation.
(2) In this Act paragraphs and subparagraphs will be read conjunctively as if the word "and" linked each paragraph or subparagraph unless the word "or" appears between paragraphs and subparagraphs.
ECONOMIC FISCAL AND FINANCIAL MANAGEMENT
DIRECTOR-GENERAL OF FINANCE AND ECONOMIC MANAGEMENT
(2) The Director-General must be appointed by the Public Service Commission in accordance with the Public Service Act 1998.
RESPONSIBILITIES OF DIRECTOR-GENERAL AND MINISTERS
(2) The Minister is responsible to the Council of Ministers and to Parliament for -
(a) financial and economic policy in accordance with this Act;
(b) ensuring sufficient guidelines exist for the utilisation of public money and public resources;
(c) the compliance by MFEM with MFEM's responsibilities under this Act.
(3) Each minister is responsible to the Council of Ministers and the Parliament for ensuring that persons responsible to the Minister comply with their responsibilities under this Act for the efficient and cost effective financial management of all public money under their control.
(4) Each minister shall ensure that all estimates of receipts and expenditure provided from entities that comprise the minister's assigned responsibilities are realistic, practicable and fully consistent with the Government's budget policy statement as published in accordance with section 10.
(5) Each minister shall ensure that the financial management of the resources which are allocated to the minister's assigned responsibilities in the annual budget achieve the objectives and outputs approved for each of the programs administered within the total resource allocation.
(6) Each minister shall ensure compliance with all reporting responsibilities under this Act.
(7) In a submission of the estimates to the Council, a minister will provide -
(a) a detailed assessment of the economic and financial impact of the receipts and expenditure estimates in relation to the budget policy statement required under section 10;
(b) where necessary, details of options to change the estimates including details of possible changes in Government program policy objectives or outputs to make them compatible with the budget policy statements.
THE DIRECTOR-GENERAL MAY DELEGATE POWERS
REPORTING RESPONSIBILITIES OF DIRECTOR-GENERAL
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND PRACTICE
ECONOMIC FINANCIAL AND FISCAL POLICY
REPORTING RESPONSIBILITIES OF GOVERNMENT
ECONOMIC AND FINANCIAL POLICY
BUDGET POLICY STATEMENT
(a) state or re-affirm Government's long-term objectives of fiscal policy, and in particular provide for the principal variables specified in sections 17 and 18;
(b) specify the broad strategic priorities by which the Government will be guided in preparing the estimates for that financial year;
(c) indicate by the use of ranges, ratios, or other means, the Government's intentions regarding each of the variables specified in sections 17 and 18;
(d) indicate other expenditure that the Government anticipates will be in the estimates.
(2) The budget policy statement must -
(a) assess the extent to which the objectives, priorities and intentions referred to under subsection (1) of this section are consistent with the principles of responsible fiscal management specified in section 22;
(b) assess the consistency of the objectives, priorities and intentions referred to under subsection (1) of this section with the objectives, priorities and intentions indicated in the immediately preceding budget policy statement; or if amended that amendment, and where these are not consistent justify the departure.
(3) Any member of the public may, within 14 days of the notice of the budget policy statement being published deliver in writing to the Chairperson of the Expenditure Review Committee any submission that person may have in respect of the budget policy statement.
FISCAL STRATEGY REPORT
(2) The fiscal strategy report must -
(a) include an assessment of the extent to which the economic and fiscal update required under section 14 is consistent with the budget policy statement required under section 10;
(b) include an explanation of the reasons for any significant differences in the consistency between the current economic and fiscal situation and the information and intentions presented previously in the Budget policy statement;
(c) present an amended set of intentions where circumstances have changed;
(d) specify projections of trends in the variables specified in sections 17 and 18, which illustrate, for stated significant assumptions, likely future progress towards achieving the longer-term fiscal strategy and objectives specified in the budget policy statement most recently published under section 10.
(2) The statement must provide all the information required under Part VI of this Act.
(3) The statement of the estimates must accompany the Appropriation Bill.
(4) The statement must include -
(a) details of any changes to the estimates for the budget year and the following year which were included in the statement which accompanied the last Appropriation Bill;
(b) any associated changes in Government program policy, objectives or outputs, which should be associated with those changes in the estimates.
CURRENT YEAR FISCAL UPDATE
(2) The update must contain fiscal forecasts for the financial year prior to the year that the Appropriation Bill relates and a statement of all significant assumptions underlying them.
(3) The fiscal forecasts must include forecast financial statements for the State including all the information required under section 24.
ECONOMIC AND FISCAL UPDATE
(a) an economic and fiscal update for the financial year to which the Appropriation Bill relates and each of the following 2 financial years containing the information specified in sections 17 and 18;
(b) a statement of the date on which the contents of the update was finalised.
HALF-YEAR ECONOMIC AND FISCAL UPDATE
(2) The half-year economic and fiscal update must contain revisions of forecasts required under section 14.
(3) The Minister must, not later than 14 sitting days after the publication of a report under subsection (1) of this section, lay a copy of that report before Parliament.
PRE-ELECTION ECONOMIC AND FISCAL UPDATE
(2) Copies of the report must be made available to the public at the office of the Minister as soon as it is prepared and a summary of the report shall be made available to any newspaper circulating in Vanuatu.
ECONOMIC FORECASTS DATA
(a) gross domestic product, including the major components of gross domestic product;
(b) consumer prices;
(c) employment levels;
(d) balance of payments;
(e) such other information deemed necessary by the Minister to provide a comprehensive economic forecast.
(2) The economic forecasts must also include a statement of all significant assumptions underlying them.
FISCAL FORECASTS DATA
18. Fiscal forecast required under this Act must include -
(a) forecast information in respect of the statements required under section 24;
(b) forecast information in respect of the current year fiscal update;
(c) comparative budgeted and actual figures for the financial year immediately before the first of the financial years to which the fiscal forecast relates.
AVAILABILITY OF FINANCIAL FIGURES
DISCLOSURE OF POLICY DECISIONS AND OTHER MATTERS THAT MAY INFLUENCE FUTURE FISCAL SITUATIONS
(2) Where the fiscal implications of Government decisions referred to in subsection (1) of this section cannot be quantified, they must be disclosed in the statement of specific fiscal risks of the State required under section 24 and that statement shall specify that they cannot be quantified, and the reasons why.
PRINCIPLES OF RESPONSIBLE FISCAL MANAGEMENT
(2) The principles of responsible fiscal management are -
(a) reducing and then managing total State debt at prudent levels so as to provide a buffer against factors that may impact adversely on the level of total State debt in the future, by ensuring that, unless such levels have been achieved, the total overall expenditures of the State in each financial year are less than its total overall receipts in the same financial year; and
(b) achieving and maintaining levels of the State net worth that provide a buffer against factors that may impact adversely on the State's net worth in the future; and
(c) managing prudently the fiscal risks facing the State; and
(d) pursuing policies that are consistent with a reasonable degree of predictability about the level and stability of tax rates for future years.
(3) The Government shall agree on the fiscal limits that will apply to the current and future financial expenditure on ministries, Government agencies and Government projects.
(4) The Government may depart from the principles of responsible fiscal management specified in subsection (2) of this section only in cases of exceptional circumstances, and when the Government does so -
(a) any such departure must be temporary; and
(b) the Minister shall, in accordance with this Act, specify -
(i) the detailed reasons for the Government's departure from those principles including justification of those exceptional circumstances;
(ii) the approach the Government intends to take to return to those principles;
(iii) the period of time that the Government expects to take to return to those principles.
(2) Should any such circumstances arise which forces departure from these principles during the financial year, these must be disclosed in accordance with the provisions of this Act.
(a) the details of the estimated revenue of the State;
(b) the details of the expenditure estimates for each ministry and Government agency;
(c) the State's debt management responsibilities and where necessary the details of a financial plan to meet those responsibilities.
(2) Council must, not less than 7 days prior to the introduction of an Appropriation bill, return to MFEM a fiscally responsible budget in accordance with the principles set out in this Act.
(a) the total operating expenses;
(b) all other payments;
(c) the total operating revenues;
(d) all other receipts;
(e) the difference between all payments and all receipts;
(f) the level of the total debt;
(g) the level of the net worth.
(2) Each report shall also include -
(a) a statement of the financial position;
(b) a statement of the financial performance;
(c) a statement of cashflows;
(d) a statement of borrowings;
(e) a statement of commitments;
(f) a statement of specific fiscal risks;
(g) such other statements as are required to be consistent with generally accepted accounting principles and practice;
(h) a statement of accounting policies.
(3) The reporting obligations under subsections (1)(g) and (2)(a) shall not come into effect until a date appointed for that purpose is fixed by the Minister by Order on the advice of the Expenditure Review Committee. The date appointed must be within 3 years of the coming into force of this Act.
STATEMENT OF ACCOUNTS
(2) The financial statements together with the report thereon by the Auditor-General will be forwarded to the Speaker of Parliament who shall table the financial statements and reports in Parliament.
(2) At the conclusion of each financial year, all heads of ministries must present an annual report as specified by the minister and covering all the information required under section 24 as it applies to the ministry.
(3) The statement of financial performance will report the results achieved in comparison with the budget statement and the provisions or outcomes for which appropriation was provided under the Appropriation Act.
(4) The financial statements of each ministry at the end of the financial year shall be examined and reported upon by the Auditor-General and laid before Parliament as soon as practicable after the tabling of the financial accounts required under section 25.
(2) The head of a Ministerial Office shall be the person appointed by the minister to be the head of the office.
(3) In the case where minister does not appoint a head of office then the minister will, for the purposes of this Act, be the head of the Ministerial Office.
(4) A head of a Ministerial Office must comply with the same duties, responsibilities and obligations including reporting obligations under this Act as a head of ministry and in doing so sections 27 and 29 shall apply to, and the same procedure followed by a head of a Ministerial Office as if that person was the head of a ministry under this Act.
RESPONSIBILITIES OF HEADS OF MINISTRIES
(a) all activities of the ministry are undertaken in a manner which is consistent with Government financial and fiscal policies, guidelines, directions and sound financial management;
(b) adequate arrangements exist within the ministry, to ensure the requirements of section 27 are met.
(2) A head of a ministry must ensure that all financial management obligations are met including -
(a) forecasts provided for budgetary purposes will be as accurate as possible, take account of all relevant information available at the time they are prepared, be free from methodological and arithmetic error, and be subjected to appropriate internal and external quality assurance with respect to methodology and timeliness;
(b) material required by the responsible minister, the Minister or MFEM for preparation of the budget and estimates will meet stated requirements with respect to timeliness, completeness, accuracy and format;
(c) achievement at least of the forecast levels of revenue most recently supplied for budgetary purposes;
(d) sound financial management systems and internal controls exist and these are operated so as to provide:
(i) timely and materially accurate financial information; and
(ii) reasonable assurances that the transactions recorded are within statutory authority and properly disclose the use of all public financial resources administered by the ministry on behalf of the State;
(e) the provision of all information required by the ministry to enable it to meet reporting requirements.
(3) Where MFEM draws to the attention of the head of a ministry a case of non-compliance with any of the sections of this Act, the head of ministry must immediately take action to remedy this failure and explain the failure and the action taken, to the Director-General and to the Expenditure Review Committee.
STATEMENT OF RESPONSIBILITY
STATEMENTS OF RESPONSIBILITY
(2) A statement of responsibility for the financial statements of the State must be prepared and signed separately by -
(a) the Minister;
(b) the Director-General.
(3) A statement of responsibility for the financial statements of a ministry must be prepared and signed separately by -
(a) the minister responsible for that ministry;
(b) the head of that ministry.
(4) A statement of responsibility for the financial statements of a Ministerial Office must be prepared and agreed by -
(a) the minister responsible for the Ministerial Office;
(b) where appointed, the head of the Ministerial Office.
(5) All statements will warrant the -
(a) integrity of the disclosures;
(b) consistency with the requirements of this Act.
PUBLICATION, INSPECTION, AND PURCHASE OF STATEMENTS AND REPORTS
(a) that it has been published;
(b) where it can be inspected free;
(c) where it can be purchased.
(2) The Director-General will, for at least 2 months after the date of gazetting ensure that opportunities for free inspection or purchase are available.
(2) A separate appropriation must be made for each of the following -
(a) each category of program activity or output;
(b) each category of benefits or other unrequited expenses;
(c) each category of borrowing expenses or repayment of debts;
(d) each category of other non-operating expenses;
(e) each category of capital acquisitions or capital contributions.
(3) The authority to expend cash or incur expenses or liabilities under an Appropriation Act will lapse at the end of the financial year to which that Act relates but any unexpended balance of any appropriation may be dealt with in accordance with this Act.
TIMING OF FIRST APPROPRIATION BILL FOR ANY FINANCIAL YEAR
(2) Notwithstanding subsection (1) if an Appropriation Act has not come into force in accordance with subsection (1) the Minister may issue from the Public Fund such sums as are necessary for carrying out the services of Government at a level not exceeding the level of those services in the previous financial year for a period of 3 months or until the Appropriation Act comes into force, whichever is the earlier.
TRANSFER BETWEEN PROGRAMS
(a) the transfer does not conflict with budget policy;
(b) the total appropriation for that financial year for that ministry is unaltered.
(2) The head of the ministry will advise the Minister who must ensure that sufficient details to explain any transfer made pursuant to subsection (1) will be included in the next Appropriation bill.
EXPENSE OR LIABILITIES OR PAYMENTS APPROPRIATED OTHER THAN BY AN APPROPRIATION ACT
(2) An appropriation may be shown in the Appropriation Act to be off- set by an amount of revenue where that revenue applies to the recovery of costs of the relevant budget programme and meets the criteria set for that programme by the Director-General.
(3) Where an appropriation is for a net appropriation all estimated expenditure and revenue, from all sources must be included in the budget statement and provided for in the Appropriation Act to reflect how the net appropriation figure was ascertained.
TRANSFER AND SUBSEQUENT EXPENDITURE OF UNEXPENDED APPROPRIATIONS
AUTHORISATION OF EXPENDITURE
AUTHORISATION AND CERTIFICATION OF EXPENDITURE
(2) All heads of ministries are responsible for ensuring that there is adequate control over the release of and use of funds in accordance with section 29.
(3) No money may be withdrawn from the Public Fund otherwise than in payment of expenditure that has been duly authorised in accordance with this section.
(4) Notwithstanding subsection (3) if the Minister, after consultation with the Director-General is satisfied on reasonable grounds that an urgent need for expenditure has arisen:
(a) for which no provision in an appropriation Act exists or for which the existing provision is insufficient;
(b) which cannot be deferred without detriment to the public interest;
(c) which due to exceptional circumstances could not have been foreseen,
Minister may, by a warrant under his hand, with the concurrence of the Council of Ministers and in anticipation of the grant of an appropriation authorize the issue of monies from the Public Fund to meet that need.
(5) The total of the sums which may be authorised under subsection (4) shall not exceed a total of 1.5% of the total sum appropriated by Government for that financial year.
(6) When any issue is made from the Public Fund under this section a supplementary estimate of the sum required for the service for which such issue was made must be presented to Parliament at its next meeting following the date on which the warrant was issued and will be included in a Supplementary Appropriation bill.
(2) A head of ministry must ensure at all times the operation of the imprest is subject to adequate financial control, including regular accounting for the amounts drawn from the imprest.
REFUNDS AND CORRECTIONS
(2) Where any person has become indebted to the Government and it is subsequently discovered that the amount of the debt or the identity of the debtor is in error, the Director-General on being satisfied as to the facts may amend the records to reflect the true position.
WRITING OFF LOSSES
43. (1) Public money is the property of the State.
(2) All public money which is currency or a right or entitlement to currency must, except as otherwise provided in this Act, be paid into bank accounts designated by the Director-General for that purpose and which shall comprise the Public Fund.
(3) All money paid into any designated bank account is deemed to be public money, and will not be removed except as provided by the Constitution or this Act.
(4) Notwithstanding any other enactment to the contrary and except as provided for in subsection (5) and section 52(l), no bank account will be opened or operated or continued to be operated for the purpose of the deposit and/or withdrawal of public money without the express authority of and on such conditions as the Director-General determines.
(5) No ministry will continue to operate after one mouth from the commencement of this Act, any bank account other than in accordance with subsection (4) of this section.
(6) The Director-General may make demand on the manager of a bank operating in Vanuatu for disclosure of the records of the accounts current or otherwise operated by a ministry or Government agency and on receiving such demand, the manager will comply with the demand accordingly.
BALANCES MAY BE INVESTED
(2) It will not be lawful for any investment funds, including interest earned thereon to be spent in any manner other than pursuant to an appropriation.
(3) The Director-General may from time to time sell and convert into money any such securities and cause that money to be paid into the Public Fund to the credit of the account or fund to which it belongs.
(4) The Director-General may from time to time delegate all or any of his or her powers under the foregoing provisions of this section in respect of any balance in an account outside Vanuatu to any person or persons authorised to operate that account.
(5) All money received by way of donor aid shall be placed into a separate bank account of the implementing ministry or Government agency and used for the purpose agreed with the donor and accounted for by the ministry or agency.
ACCOUNT OR FUND MAY BE OVERDRAWN
46. (1) The following money shall be deemed to be trust money -
(a) money that is deposited with the State pending the completion of a transaction or dispute and which may become repayable to the depositor or payable to the State or any other person;
(b) all money that is paid into Court for possible repayment to the payee or a third party, by virtue of any Act, rule, or authority whatsoever;
(c) unclaimed money that is due to or belongs to any person and is deposited with the State;
(d) all money that is paid to the State in trust for any purpose;
(e) money that belongs to or is due to any person and is collected by the State pursuant to any agreement between the State and that person;
(f) all money received by way of donor aid, pending expenditure in accordance with such purposes and conditions as agreed between the donor and the State.
(2) All trust money held by the State shall be accounted for separately from public money.
(3) All trust money is the responsibility of the head of ministry appointed on behalf of the State to manage it and must be managed in a manner consistent with the requirements laid down by MFEM.
(4) The Director-General may appoint an agent to manage some or all trust money on such terms and conditions as the Director-General from time to time determines subject to the requirements of this section, and to the requirement that the agent is a recognised professional institution of a kind and with experience in the handling of trust moneys.
ESTABLISHMENT OF BANK ACCOUNTS FOR TRUST MONEY
INVESTMENT OF TRUST MONEY
PAYMENT OF INTEREST ON TRUST MONEY
FEE FOR SERVICE
UNCLAIMED TRUST MONEY
(2) Where any trust money is claimed within 3 years of being deposited under section 46 and the Director-General is satisfied the trust money is payable to the claimant then that money must be paid to the claimant together with any interest thereon in accordance with section 49 but subject to section 50.
PUBLIC MONEY OUTSIDE VANUATU
OVERSEAS IMPREST AND OTHER SPECIAL ACCOUNTS
(2) Every such account will be part of the Public Fund and this Act shall apply to that account accordingly.
LOANS AND SECURITIES
GOVERNMENT NOT TO BORROW EXCEPT UNDER STATUTE
MINISTER MAY RAISE LOANS
(2) Prior to raising a loan the Minister must first:
(a) ensure that it is necessary and in the public interest to do so;
(b) ensure it is fiscally responsible in accordance with this Act;
(c) ensure it is consistent with Government policy generally and investment policies specifically;
(d) consult with the Director-General and satisfy himself or herself on reasonable grounds that the Government has or is likely to have the financial ability to meet 0 the obligations under the loan including future obligations;
(e) consult with and obtain the advice of the Attorney-General or a solicitor approved by the Attorney-General in writing, of the legal aspects, implications and appropriateness of raising the loan;
(f) make a submission to Council which must include a draft of all of the loan documentation, certify that all the prerequisite requirements of this section have been complied with, justify the necessity of raising the loan in accordance with subparagraphs (a), (b) and (c) and contain independent comments in writing by the Director-General and the Attorney-General. The Attorney-General must certify that the procedures in accordance with this Act or any other applicable Act have been followed;
(g) obtain a Council minute approving the loan;
(h) report the full details and reasons for the loan and securities provided at the next sitting of Parliament.
(3) Every loan must be in the name of the President in Right of the Republic and every document required to be signed evidencing the terms of the loan must be executed by the Minister.
(4) No funds raised by loan may be expended for any purpose other than that specified in a provision under an Appropriation Act.
REPAYMENT OR CONVERSION OF LOANS
(a) repay any loan to the State; or
(b) convert any loan to the State into any other such loan or loans provided that if the Minister extends the amount or term, then the minister must comply with the requirements of section 54.
MINISTER MAY APPOINT UNDERWRITERS AND MANAGERS FOR LOANS
LIABILITY FOR DEBT OF STATE
(2) Subsection (1) of this section will not apply in relation to -
(a) any sum the State is liable to contribute pursuant to any Act; or
(b) any sum the State is liable to contribute pursuant to any guarantee or indemnity given by the Minister pursuant to section 60; or
(c) a sum the State is liable to pay a creditor of a State entity, subsidiary, entity, other agency, or corporate body, by virtue of a cause of action that the creditor has against the State; or
(d) any sum the State is liable to pay to any creditor of the State.
POWER TO LEND MONEY
(a) with the approval of the Council of Ministers;
(b) on the advice of the Director-General;
(c) where an appropriation exists.
(2) The Minister must make full disclosure of the details of any loan approved pursuant to subsection (1) of this section at the first sitting of Parliament following the approval of the loan.
AUTHORITY FOR THE GIVING BY THE STATE OF GUARANTEES AND INDEMNITIES
POWER TO GIVE GUARANTEES AND INDEMNITIES
(a) with the prior approval of a simple majority of Parliament;
(b) after consultation with the Director-General;
(c) where such guarantee or indemnity is consistent with the fiscal responsibility provisions of this Act.
(2) The Minister must advise, and give reasons and provide documents where required, to Parliament as to why it is necessary in the public interest to grant the guarantee or indemnity, as the case may be, and must provide an assessment of the risks associated with the guarantee or indemnity.
(3) Where a guarantee or indemnity is required as security for the raising of a loan under section 54 the Minister is not required to obtain the approval of Parliament but must in the report to Parliament under section 54(2)(h) include the full details of the guarantee or indemnity and the reasons why it was necessary in the public interest.
(4) Any money paid by the State pursuant to a guarantee or indemnity given under this section will constitute a debt due to the State from the person, organisation, or Government agency in respect of whom the guarantee or indemnity was given, and may be recoverable as such in any Court of competent jurisdiction.
PAYMENT OF PRINCIPAL AND INTEREST ON LOANS
INFORMATION AND COMPLIANCE
POWER OF DIRECTOR-GENERAL TO OBTAIN INFORMATION
(2) Any ministry or entity receiving a request of the Director-General pursuant to subsection (1) shall comply with the request as
soon as practicable.
OFFENCES AND SANCTIONS
(a) refuses or fails to produce any information that is in that person's control in relation to the financial management, financial performance, or banking activities of a ministry or in relation to the management or control of any public resource or liability when required to do so pursuant to this Act; or
(b) resists or obstructs any person acting in the discharge of that person's functions or duties or in the exercise of that person's powers under this Act.
(2) A person commits an offence against this Act who -
(a) without reasonable excuse, refuses or neglects to pay any public money into a bank account of the Public Fund; or
(b) without reasonable excuse, refuses or neglects to pay any trust money into a bank account designated under section 47; or
(c) makes any statement or declaration, or gives any information or certificate, required by or pursuant to this Act, knowing it to be false or misleading, or does so without adequate investigation; or
(d) does any act for the purpose of procuring for that person or for any other person or organisation:
(i) the improper payment of any public money or trust money; or
(ii) the improper use of any public resource; or
(e) wilfully fails to carry out any duty or obligation imposed on that person pursuant to this Act.
OBLIGATION TO REPORT
(2) A person who alleges a breach of this Act to the Director-General shall not be penalised in any way whether the allegation is proved or not.
PENALTIES FOR OFFENCES
(a) in the case of an individual, to a fine not exceeding VT600,000 or imprisonment for a term not exceeding 3 years or both;
(b) in the case of a person or organisation other than an individual, to a fine not exceeding VT1,000,000.
(2) Every person who commits an offence under section 64(2) of this Act is liable on conviction -
(a) in the case of an individual to a fine not exceeding VT1,000,000 or imprisonment for a term not exceeding 7 years or both;
(b) in the case of a person or organisation other than an individual, to a fine not exceeding VT2,000,000.
(3) Where any body corporate commits an offence against this Act, every director, secretary, manager and other officer of the body corporate and every person purporting to act in any such capacity shall also be guilty of an offence unless that person satisfies the Court that either -
(a) the offence was committed without that person's knowledge or consent or not through that person's gross negligence; or
(b) that person took all reasonable steps to prevent the commission of the offence.
(4) Details of offences and penalties must be provided to the Expenditure Review Committee.
(5) A person who is a leader (as defined in the Leadership Code Act) and who is convicted of an offence under section 64 shall in addition to the penalties provided for under this Act be liable to the penalties under that Act as if a conviction under this Act were a conviction under that Act.
(2) Where, during the period of twelve months from the coming into force of this Act, any report, statement or update required by this Act is not provided by the due date in accordance with this Act, the Minister must report the circumstances of the same to the next sitting of Parliament.
(3) The person holding office corresponding to that of Director-General, immediately before the commencement of this Act shall after the commencement of this Act hold office as Director-General subject to the provisions of this Act.
(4) Every person holding office as an officer or employee of the Department of Finance immediately before the commencement of this Act, shall after commencement of this Act hold office as an officer or employee of MFEM upon the same terms and conditions as to employment, subject to the provisions of this Act.
(5) Every act, matter or thing done in the name of the Department of Finance before the commencement of this Act will if validly done continue to have effect as if done in the name of MFEM after the commencement of this Act and every act, matter or thing in progress before the commencement of this Act and which is affected by this Act may continue in progress after the commencement of but subject to this Act.
ACT TO PREVAIL
71. The enactments specified in the Schedule are repealed.
72. This Act shall come into force on 1st July 1998.
Public Finance Act, [CAP. 117] and amendments.
Government Borrowing and Guarantee Act [CAP. 149] and amendment.
Economic and Social Development Loan (issue of Bonds) Act [CAP. 184] and amendments.
Government Loans (issue of Bonds) Act [CAP. 194] and amendments.
The Development Loans Act 1993 No. 12.