KINGSTON — The House of Representatives on June 7 approved amendments to the Public Bodies Management Accountability (PBMA) Act and its companion legislation, the Financial Audit and Administration (FAA) Act.
Piloting the bills, Minister of Finance and the Public Service, Hon. Audley Shaw, explained that the changes are consistent with the Government’s fiscal responsibility framework, which was tabled in Parliament, and now seeks to strengthen these Acts with more specific duties and responsibilities.
Furthermore, he said, the changes “seek to address certain residual deficiencies, while clearing the way for the development of regulations, designed to enhance compliance”. In March 2010, the House approved a raft of amendments, to usher in the fiscal responsibility framework for the country.
The provisions cover: policy, administration, and financial management. The accompanying regulations to the amendments will be tabled within another week, Mr. Shaw noted.
The PBMA Act prohibits public bodies from entering into negotiations to borrow money, by way of an issue of bonds, without the prior approval of the Minister. The Act further seeks to provide for corporate plans of public bodies, and any subsequent modifications of such plans, to be submitted to the Minister for endorsement.
The bill will expand the coverage of entities, which are subject to the Act, by: including government companies that are formed by guarantee, while excluding executive agencies from its ambit; and strengthening the provisions to deal with equity investments by public bodies, in order to reduce the Government’s potential exposure to financial risks.
It also provides the legislative basis to facilitate the implementation of a coherent financial distribution policy for public bodies.
Furthermore, the bill also generally seeks to replicate some of the provisions related to the financial control of public bodies from the FAA Act. This is in support of the objective to make this Act the umbrella legislation covering all financial provisions applicable to this segment of the public sector; and strengthen the rules governing directors, external auditors and audit committees in the exercise of their oversight responsibilities, among other things.
Meanwhile, the FAA Act refines the provisions relating to fiscal responsibility in order to enhance clarity and efficacy. Under the Act, approval of the Financial Secretary will be required for administrative or policy changes that have budgetary implications, while the granting of approval for deferred financing arrangements will be prohibited.
The legislation also enables the establishment of regulations, which will ensure that fiscal principles are also used to evaluate fiscal performance.
By ALPHEA SAUNDERS, JIS Reporter