Government Sector Finance Act 2018 (GSF Act)

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The Government Sector Finance Act 2018 (GSF Act) is a principles-based legislation that establishes the foundation of NSW’s financial and resource management framework. The object of the GSF Act is to promote and support sound financial management, budgeting, performance, financial risk management, transparency, and accountability in the government sector, as well as by GSF agencies and government officers.

The GSF Act applies to

  • GSF agencies – include Public Service agencies, State owned corporations, Statutory bodies representing the Crown, as well as controlled entities and entities prescribed by the regulations
  • Accountable authorities – responsible for the performance and financial management of their agencies
  • Government officers – include employees of a GSF agency, the head of a GSF agency, and anyone prescribed to be a government officer in the regulation
  • Persons handling government resources – include a government officer, an accountable authority, a person exercising functions as a delegate in connection with the use of government resources.

Guidance material and resources will assist the sector understand the scope and obligations of the GSF Act.

Treasurer’s Directions under the GSF Act

GSF agency and key information

We have a range of helpful agency information factsheets and guides including:

 

GSF Act legislation and statutory instruments

You can view the legislation and other helpful resources including:

The GSF Regulation 2024 repeals and remakes, with minor changes, the Government Sector Finance Regulation 2018. For details of the remake see:

Treasurer's Directions are legislative publications with the TD prefix. These statutory instruments are required to be published on the NSW legislation website.  A TD takes effect on the day it is published on the NSW legislation website or any later day specified in the direction.

 

GSF Act: By Subject

Scope and Governance
Budget, Appropriations and Special Deposits Account
Expenditure and Gifts
Financial Services and Financial Arrangements
Reporting
Information sharing & Portfolio Operations
Delegations

Disclaimer

This is guidance material only and does not replace reading the legislation.

GSF Act: Frequently Asked Questions (FAQs)

Agency financial statements
Can you provide example wording for the certification statement?

A GSF agency's financial statements must include a certification statement by that agency's accountable authority (section 7.6(4) of the GSF Act). See example wording Statement of accountable authority on financial statements. (PDF 73.61KB)

When are GSF agencies required to submit financial information to Treasury?

All accountable authorities must, for each financial year, complete the required procedures and submit financial information as set out in the relevant Treasury Policy Guidelines (TPGs) and Treasurer’s Directions (TDs).

The information must agree with the financial statements submitted for audit.

Refer to:

When are GSF agencies required to submit their annual financial statements for audit?

The deadline for GSF agencies to submit their financial statements to the Auditor-General is dependent on whether they are required to provide a Mandatory Annual Return to Treasury or not.

Refer to Treasury’s documents library for the current reporting year’s TPG on Agency Direction for Mandatory Annual Returns to Treasury.

Can GSF agencies submit their financial statements to the Auditor-General without the signed certification statement by the accountable authority?

GSF agencies can initially submit their financial statements to the Auditor-General without the signed certification statement, but it must be provided in order for the preparation of the Independent Auditor’s Report. This is as the certification statement by the accountable authority is part of the annual GSF financial statements subject to audit.

GSF agencies and the Audit Office of NSW are to agree on the final submission date as part of the audit.

Can GSF agencies apply for an extension of time to submit their financial statements?

Treasury expects that accountable authorities will do everything within their power to meet the deadlines for their agencies.

In circumstances where agencies may not be able to meet these deadlines, GSF agencies can apply for an extension.

GSF agency CFOs should submit extension requests in writing. Requests should:

  • state the reasons why the GSF agency cannot meet the deadline (brief reasons only; bullet points preferred),
  • identify the relevant TD or TPG and the specific requirement creating the deadline,
  • specify the length of extension required,
  • confirm that the GSF agency’s Audit Office of NSW contact does not object to Treasury granting the request,
  • include the name and email address of the Audit Office of NSW contact who provided this confirmation, and
  • include the name and email address of a contact person within your agency whom Treasury can contact if further information is required.

When making an extension request please:

Refer to Treasury’s document library for the current reporting year’s TPG on Agency Direction for Mandatory Annual Returns to Treasury and TD25-02 Financial Reporting Requirements.

When can GSF agencies expect to receive the audit report of their financial statements?

GSF agencies can discuss the timing of receiving the audit report with the Audit Office of NSW.

Who pays the Auditor-General’s audit costs?

The GSF agency must reimburse the Auditor-General for the cost of the GSF agency’s financial statements audit. The Audit Office of NSW provides information on the cost of each audit in its annual engagement letters prior to audit commencement. For further information about the Auditor-General’s costs, please visit the Audit Office of NSW website.

When must a Minister table a GSF agency’s financial statements in Parliament?

Where the accountable authority for a GSF agency is required to prepare annual reporting information under the GSF Act, as detailed in TPG25-10 Framework for Financial and Annual Reporting, the GSF agency’s annual reporting information must include the financial statements and the audit report of those statements.

The annual reporting information must be prepared and submitted to the responsible Minister no later than four months after the end of the annual reporting period for the agency.

The responsible Minister must table in Parliament no later than five months after the end of the annual reporting period for the agency (section 7.12-13 of the GSF Act and TD25-05 (PDF 740.79KB)).

Where the accountable authority for a GSF agency has not prepared annual reporting information, the financial statements and the audit report of those statements must be submitted to the responsible Minister. The responsible Minister must table in Parliament as soon as practicable, but no later than five months after the Auditor-General provides his audit report on those financial statements (section 7.6(5)(b)(i) of the GSF Act).

Can the Treasurer access a GSF agency’s accounts and records?

Yes. The Treasurer can access a GSF agency’s accounts and records.

All GSF agencies must keep accounts and records that properly record and explain the GSF agency’s transactions, cash flows, financial position and financial performance (section 7.5(1) of the GSF Act). The Treasurer and the responsible Minister have full and free access to GSF agency records and accounts (section 7.5(2) of the GSF Act).

Agencies excluded from financial and annual reporting requirements
Which GSF agencies are excluded from GSF Act financial and annual reporting requirements?

Certain kinds of GSF agencies are excluded from the GSF Act reporting requirements, as specified in Division 2 of the Government Sector Finance Regulation 2024 (GSF Regulation). TPG25-10 Financial and annual reporting framework (PDF 1.55MB) incorporates the GSF Act and regulation reporting requirements. Under this framework a group 3 agency is a GSF agency of a kind that meets the criteria in the GSF Regulation. Those kinds of agencies are:

  • small agencies (clause 15 of the GSF Regulation)
  • small controlled agencies (clause 15A of the GSF Regulation)
  • Crown land managers (clause 16 of the GSF Regulation)
  • common trusts (clause 17 of the GSF Regulation)
  • special purpose staff agencies (clause 18 of the GSF Regulation)
  • retained State interests (clause 19 of the GSF Regulation)
  • ERIC subsidiaries (clause 19A of the GSF Regulation).

GSF agencies must self-assess each year to determine whether they continue to meet the criteria for exclusion. TPG25-10 (PDF 1.55MB) Framework for Financial and Annual Reporting provides further information on group 3 criteria and the self-assessment process. Where a GSF agency is uncertain, contact Treasury at legislation@treasury.nsw.gov.au.

Do GSF agencies need to notify Treasury if they are excluded from reporting?

Yes. TPG25-10 Financial and Annual Reporting Framework (PDF 1.55MB) requires the accountable authority of the GSF agency to inform Treasury and the Audit Office of NSW if the GSF agency is likely to, or does, move in or out of group 3 (i.e. excluded from reporting) as soon as practicable after completing the relevant self-assessment.

Additionally, each year Treasury collects information from the sector on GSF agencies including preparation of financial reporting. GSF agencies should notify Treasury at legislation@treasury.nsw.gov.au if there is a change in their reporting status.

If a GSF agency is not excluded from reporting, can I seek an exemption from the Treasurer or Treasury?

No. The GSF Act does not empower the Treasurer or Treasury to exempt a particular agency from the GSF Act reporting requirements.

Can an excluded agency voluntarily prepare its financial statements?

Yes. GSF agencies can still prepare financial statements even if they are not required to do so under section 7.6 of the GSF Act.

Some GSF agencies may fall in and out of a ‘kind’ excluded requirements specified in the Government Sector Finance Regulation 2024 (Division 2) from year to year. Those agencies may find it easier to prepare financial statements each year as the Audit Office still needs to perform audit procedures and obtain assurance on the opening balances when these amounts have not been audited in the prior year.

Can the Auditor-General inspect and examine the accounts and records of an excluded GSF agency?

Yes. A GSF agency, whether or not a reporting GSF agency, is an auditable entity. The Auditor-General can inspect and examine the accounts and records of any GSF agency even if that GSF agency is excluded from financial reporting. (section 35(2) and (3) of the Government Sector Audit Act 1983 (GSA Act)).

The Audit Office of NSW is entitled to full and free access to the books, records or other documents of or relating to any entity, fund or account or government resources or related money for the purposes of any inspection, examination, audit or audit-related services that the Auditor-General is authorised or required to perform by or under the GSA Act or any other law (section 36(1) of the GSA Act).

Annual reporting information
When must the accountable authority for a GSF agency submit that GSF agency’s annual reporting information to its responsible Minister?

Within four months from the end of the GSF agency’s annual reporting period. TD25-05 Annual reporting information requirements (PDF 740.79KB) states that a GSF agency’s accountable authority must prepare the GSF agency’s annual reporting information no later than four months after the end of the annual reporting period. This is to be given to its responsible Minister to enable it to be tabled in Parliament. In practice, the completion of the preparation period coincides with the delivery of the annual reporting information to the responsible Minister.

While four months is the expected period in TD25-05 for the accountable authority to give the annual reporting information to the responsible Minister, under section 7.12(2)(b) of the GSF Act, a responsible Minister may agree or direct a different period for the GSF agency. This means the accountable authority may be asked to provide the annual reporting information to the responsible Minister earlier. However, the different period cannot be later than five months as the responsible Minister must table the annual reporting information within five months after the end of the annual reporting period.

Where the Minister agrees to receive the GSF agency’s annual reporting information later than four months after the end of the annual reporting period, the accountable authority for the GSF agency must seek an extension under TPG25-10.

Can the accountable authority for a GSF agency request that Treasury extend the four-month deadline for submission of a GSF agency’s annual reporting information to its responsible Minister?

Yes. As the annual reporting information must be tabled in Parliament within five months from the end of the GSF agency’s annual reporting period, Treasury may extend the submission deadline to the Minister by a maximum of one month.

The accountable authority can request an extension, following the steps in TD25-05 Annual reporting information requirements (PDF 740.79KB). The request should be made no later than three months after the end of the reporting period and must be supported by the GSF agency’s responsible Minister. GSF agencies should liaise with their Minister’s Office before seeking an extension.

When must the responsible Minister for an agency cause the tabling of that agency’s annual reporting information?

Within five months from the end of the GSF agency’s annual reporting period. Section 7.13 of the GSF Act requires the responsible Minister for a GSF agency to cause tabling of the annual reporting information as soon as practicable, but no later than five months after the end of the annual reporting period.

Special Deposits Account (SDA) Accounts
We have an account within the SDA that is no longer needed – what should we do?

A statutory Special Deposits Account (SDA) account exists for the purpose(s) specified in the legislation which establishes the account. If that purpose has been fulfilled, or the SDA account is otherwise no longer needed, then the SDA account should be dissolved.

Dissolving an SDA account requires an amendment to the legislation which establishes it. Any monies remaining in the SDA account would be paid into the Consolidated Fund, unless the amending legislation provides otherwise.

If you wish to dissolve an SDA account, or you require further information, please contact your Treasury Relationship Lead and your legal advisors. See also the Special Deposits Account fact sheet (PDF 112.91KB).

Do I need a separate bank account for my account within the SDA?

No. An account within the SDA is akin to a ledger account. It is not essential to have a separate bank account for an account within the SDA. However, the responsible manager for the account must maintain accounting records that are sufficient to prepare financial reports concerning the account (section 7.8 of the GSF Act). See also the Special Deposits Account fact sheet (PDF 112.91KB).

Delegations and expenditure under the GSF Act
Does the GSF Act set delegation thresholds?

No. Thresholds are set by the delegator in the instrument of delegation.

What is an excluded function?

An excluded function is a function which may not be delegated or subdelegated by a Minister, GSF agency that is a person, or an accountable authority (sections 9.8(7), 9.9(7), 9.10(5), 9.11(7) of the GSF Act). See the Delegations (PDF 215.71KB) fact sheet for more information.

How does expenditure authorisation need to take place under the GSF Act?

Accountable authorities and government officers must ensure that expenditure of money is properly authorised.

For the expenditure to be authorised it must be done (section 5.5(3) of the GSF Act):

  • in accordance with a delegation or subdelegation from a person with power regarding the expenditure of money, or
  • under the authority of the GSF Act or any other law.

In relation to the expenditure of money where authorisation is provided by delegation or subdelegation, the delegation (including any thresholds) is set by the delegator. You should refer to your GSF agency’s delegations manual, policies and procedures to determine who may authorise expenditure and how expenditure must be authorised. For further information refer to the Expenditure (PDF 84.36KB) and Delegations (PDF 215.71KB) fact sheets.

How does expenditure authorisation apply to shared service providers?

It is common for GSF agencies to enter into shared service arrangements with providers that require the provider to make payments to a third party (e.g. agency employees) on behalf of the agency. These types of arrangements generally incorporate two points of expenditure of monies (see figure below), both of which are required to be authorised pursuant to the GSF Act.

That is, the accountable authority for the GSF agency (or a government officer of a GSF agency) who enters into the shared service arrangement (see figure 1 point 1), is responsible for ensuring any expenditure of monies under that arrangement (see figure 1 point 2) is authorised.

For example, the authorisation for any expenditure under the arrangement may be included in a delegation or subdelegation instrument from a Minister (holding an appropriation under an annual Appropriation Act) or Secretary to the relevant government officer.

Accountable authority for the GSF agency
Figure 1

The above information is provided as general guidance only. If you have any further queries, please contact your agency’s legal team in the first instance or Financial Management Legislation  in NSW Treasury at legislation@treasury.nsw.gov.au

Can an accountable authority, or their subdelegate, enter into multi-year contracts without breaching their appropriation?

Generally, the response to this question will depend on the terms of the contract and the circumstances of each case. The accountable authority or their delegate must have a financial delegation for the total amount payable over the term of the contract, authority to enter into the contract, and the appropriation limit must not have otherwise been reached by expenditure in the relevant financial year.

The below should be followed to ensure that expenditure under a contract is authorised:

  • the accountable authority of a GSF agency to ensure that expenditure of money for a GSF agency is in a way that is authorised (section 5.5(1) of the GSF Act).
  • a government officer must ensure that the officer’s expenditure of money for the State or a GSF agency is done in a way that is authorised (section 5.5(2) of the GSF Act).
  • an accountable authority is also a government officer and would, therefore, be subject to this obligation in section 5.5(2).
Government officers under the GSF Act
How can volunteers, consultants and contractors be authorised to exercise functions under the GSF Act?

The GSF Act generally excludes volunteers, consultants and contractors from being government officers. However, a GSF agency may prescribe volunteers, consultants and contractors as government officers through the GSF Regulation under section 2.9(1)(e) of the GSF Act.

This approach is commonly used where a consultant exercises delegated powers under the GSF Act or performs functions ordinarily undertaken by senior departmental officers.

For further information, contact Financial Management Legislation at legislation@treasury.nsw.gov.au.

What is the process to have an entity prescribed as a GSF agency or person prescribed as a government officer in the regulation?

If a GSF agency wishes to have entities or persons prescribed as a GSF agency or government officer (respectively) in the GSF Regulation, they should follow these steps:

  1. Refer to the Key Concepts in Part 2 of the GSF Act
  2. Refer to the GSF Act 2018 Fact Sheet – GSF Agencies (PDF 126.43KB)

If you think the guidelines apply to your circumstance, or you have further questions, you can contact Financial Management legislation at legislation@treasury.nsw.gov.au.

Breaches under the GSF Act and debt write-off
How are serious breaches dealt with under the GSF Act?

The GSF Act distinguishes between civil breaches and criminal offences. Serious breaches are dealt with through civil recovery mechanisms rather than being treated as criminal offences (Division 9. 4 of the GSF Act).

The GSF Act does not contain any criminal offence provisions, but breaches will instead rely on existing provisions in the Crimes Act 1900 and other applicable legislation. For example, theft of government resources, or fraud resulting in a loss of government resources, will be dealt with under existing and well-established offences in statute and at common law. Breaches may also be dealt with by way of employment sanctions, including those available under the Government Sector Employment Act 2013 or through employment contracts.

What about debt recovery or write-off of debts?

Currently, aside from section 9.18 of the GSF Act (which deals specifically with recovery and write-off of debts in circumstances due to misconduct or unauthorised gifting), there are no specific requirements on debt write-off under the GSF Act or any Treasurer’s Direction (TD) issued on that subject. TD94/4 Recovery of debts due to the State in the Gold Book (PDF 3.45MB) has been repealed and is no longer enforced.

Accountable authorities are to develop, establish and maintain financial management policies and procedures for effective risk management, protecting the integrity of financial and performance information, and for compliance with the requirements of the GSF Act (section 3.6 of the GSF Act).

If a GSF agency decides it is appropriate to have a policy or procedure for its agency on authorisation for debt recovery or write-off, it can develop and maintain its own policy, provided it is not inconsistent with the requirements of the GSF Act.

Working accounts
Can amounts paid under the authority of an annual appropriations be paid into another agency’s working account?

A GSF agency cannot pay money into its own working account where that money was appropriated for the services of that GSF agency (section 4.17(2)(a) of the GSF Act). This section also prevents delegates (in GSF agencies) who have authority to expend money from the appropriation provided to that agency under an annual Appropriation Act from withdrawing that money from the Consolidated Fund and paying it into the working account.

However, section 4.17(2)(a) does not preclude a GSF agency (Agency A) from being paid money into its working account by another GSF agency (Agency B) if the money is of the kinds specified in clause 35(4) of the GSF Regulation. This is the case even where the money Agency B paid to Agency A came from money provided to Agency B from an appropriation under an annual Appropriation Act.

In summary, if there are two different GSF agencies and the money falls into the specific categories in clause 35(4) of the GSF Regulation, one GSF agency may pay the money into a working account of another GSF agency (subject to the working account’s instrument).

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