Glossary of terms: Discussion paper on Reforming Victoria's public finance legislation

Accountable officer
The accountable officer for a department is normally the head of that department. The accountable officer for a public body is normally the chief executive officer of that body.

Accountability
The state of being accountable, liable, or answerable.

Accrual accounting
Recognition of revenue, expenses, assets, liabilities and equity when the economic transaction occurs, irrespective of the timing of the related cash flow. For example, revenue from sale of goods is recorded as of the invoice date rather than the date on which payment is received.

Administrative office
A body or group established under s. 11 of the Public Administration Act.

Annual appropriation
The limit of resources the Treasurer applies as (i) revenue to a department for provision of outputs, (ii) contributions to a department for additions to its asset base, and (iii) funding for payments made on behalf of the state. It is contained in the Appropriation Act and the Appropriation (Parliament) Act.

Australian Accounting Standards Board (AASB)
The Australian Accounting Standards Board (AASB) is an independent accounting standard-setter based in Melbourne. The AASB is committed to developing, in the public interest, a single set of high quality, understandable accounting standards that require transparent and comparable information in general purpose financial statements.

Bill
A proposed law (or statute, or piece of legislation) that is introduced into parliament but has not yet been passed. If passed and granted Royal Assent, it becomes an Act.

Budget estimates
The budget estimates are the amounts of money which executive government estimates the government will need to expend to meet is commitments.

Budget and financial management guidances
Budget and financial management guidances provide detailed guidance on the elements of the existing budget and financial management policy framework, and how it is to be applied. Budget and financial management guidances typically provide guidance on how to comply with relevant sections of the Financial Management Act, manage accrual output budget management issues or how to apply relevant Australian equivalents to International Financial Reporting Standards.

Consolidated fund
The government’s primary account that receives all revenue raised by and granted to the state, and from which amounts are appropriated by parliament for specific purposes. The consolidated fund, together with the trust fund, forms the public account. All payments from it must be authorised by parliament.

Consolidated revenue
Parliament appropriates funds to departments out of consolidated revenue via appropriations Acts to fund:

• the delivery of outputs
• additions to the net asset base
• other administrative activities.

Council of Australian Governments (COAG)
The Council of Australian Governments (COAG) is the peak inter-governmental forum in Australia. COAG comprises the Prime Minister, state Premiers, territory Chief Ministers and the president of the Australian Local Government Association. The role of COAG is to initiate, develop and monitor the implementation of policy reforms that are of national significance and which require cooperative action by Australian governments (for example, national competition policy, water reform).

Department and administrative heads
Defined under section 4(1) of the Public Administration Act as a person employed as the head of either a department or administrative office.

Executive government
Victoria’s executive government consists of the Governor, Premier, and the state’s ministers.

Estimated financial statements
Estimated financial statements forecast financial results for the Victorian general government sector for the next three years. The prospective nature of these statements reflects a number of judgements about the most likely operating and financial conditions for the Victorian general government sector.

Forward estimates
Forward estimates represent planning projections for the forecast period (three years) based on unchanged policy and other assumptions.

General government sector
The general government sector comprises all government departments, offices and other bodies engaged in providing services free of charge or at prices significantly below their cost of production. General government services include those which are mainly non-market in nature, those which are largely for collective consumption by the community, and those which involve the transfer or redistribution of income.

General purpose reporting
Reports prepared for external users who do not have the ability to require or contract for the preparation of special reports to meet their specific information needs.

Global appropriations
Outlined in Schedule 1 of each annual Appropriation Act, global appropriations incorporate the provision of outputs and additions to the department’s net asset base, to be used for the purchase of assets supporting the delivery of outputs, and payments on behalf of the state.

Governor in Council
Powers exercised by the Governor at the Executive Council meeting, on the advice of the Executive Council, which consists of the ministers of the state.

Government Gazette (Victoria)
The Victoria Government Gazette provides official notification of decisions or actions taken by, or information from, the Governor of Victoria, government authorities, government departments, local councils, companies and individuals.

Growing Victoria Together (GVT)
Growing Victoria Together (GVT) is a ten-year vision that articulates what is important to Victorians and the priorities the government has set to build a better society. It is based on careful discussion and consultation with many groups in the community.

Inputs
Labour, materials and other resources used to produce outputs.

Integrated Management Cycle (IMC)
The Integrated Management Cycle (IMC) identifies the major planning, resource allocation, and accountability milestones through the year, and outlines the process requirements and the relationships between various activities. The IMC is designed to be used as a tool to improve planning processes and capability in departments. The IMC comprises a calendar and guide.

International Public Sector Accounting Standards Board (IPSASB)
The International Public Sector Accounting Standards Board (IPSASB) focuses on the accounting and financial reporting needs of national, regional and local governments, related governmental entities, and the constituencies they serve. It addresses these needs by issuing and promoting benchmark guidance and facilitating the exchange of information among accountants and those who work in the public sector or rely on its work.

Investment Lifecycle Guidance material
These guidelines are to be applied to each investment of the Victorian Government so they provide the maximum benefit for the citizens and businesses of Victoria. They provide practical assistance to shape investment proposals, inform investment decisions, monitor delivery of investments and track the ultimate attainment of benefits.

Legislation
Laws enacted by a legislature or parliament.

Machinery of government
The expression ‘machinery of government’ has long been used to refer to the allocation and reallocation of functions between departments and ministers. In Victoria, machinery of government matters are the sole responsibility of the Premier.

Minister
A member of the government responsible for one or more portfolios or government departments; he or she is also a member of Cabinet.

Ministerial directions
In the case of this discussion paper, ministerial directions support the Financial Management Act. They specify matters with which government departments and public bodies must comply to implement and maintain appropriate financial management practices. In so doing they achieve a consistent standard of accountability and financial reporting. The directions specify high-level requirements for financial management. This allows government departments and public bodies to develop specific systems, procedures and compliance practices.

Multi-year appropriations
Multi-year appropriations make amounts available for a particular purpose over more than one financial year.

Non-government organisation
An organisation that is neither owned nor controlled by government.

Outcomes (government)
Outcomes refer to the government’s desired or intended impacts/effects on the community.

Outputs
Outputs are goods or services produced or delivered by, or on behalf of, a department or entity.

Parliament
The Parliament of Victoria consists of the Queen, the Legislative Assembly, and the Legislative Council; also used to refer to the two houses.

Program budgeting
Program budgeting sets programs as the basis for budget appropriations.

Public account
The government’s official bank account, maintained at one or more banks as required by the Financial Management Act. It holds the balances of the consolidated fund and the trust fund.

Public non-financial corporations
The public non-financial corporations sector comprises bodies mainly engaged in the production of goods and services (of a non-financial nature) for sale in the market place at prices that aim to recover most of the costs involved (e.g. water and port authorities).

Public financial corporations
Public financial corporations are bodies primarily engaged in the provision of financial intermediation services or auxiliary financial services.

Public service bodies
Defined under s. 4(1) of the Public Administration Act to mean a department; administrative office; or the State Services Authority.

Public value
Public value is what the public values in terms of public services and efficiency.

Service delivery
In Victoria, service delivery relates to the production or delivery of outputs by, or on behalf of, a department and its entities to achieve government's desired outcomes. Output performance measures relating to quantity, quality, timeliness and cost are used to assess each department’s performance in service delivery.

Special bodies
Those bodies prescribed under s. 6(1) of the Public Administration Act, and any body declared by the Governor in Council, under s. 6(2) of the Act, to be a special body for the purpose of the Act.

Special purpose reporting
Reports tailored to meet the specific information needs of a particular user.

Specific Purpose Payments (SPPs)
Grants made by the Commonwealth to state and territory governments subject to terms and conditions laid down by the Commonwealth, generally with a view to ensuring that Commonwealth policy objectives (or national objectives agreed between the Commonwealth and the states) are met.

State Services Authority (SSA)
The State Services Authority (SSA) is responsible for fostering the development of an efficient, integrated and responsive public sector which is highly ethical, accountable and professional in the ways it delivers services to the Victorian community.

Subordinate legislation
Regulations or similar rules made under the authority of an Act.

Tax
A sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, et cetera.

Treasury management guidelines
The Treasury management guidelines set a framework to guide government business enterprises in the development and management of their treasury function.

Trust fund
Trust fund comprises a series of separate trust accounts which contain money held for a specific purpose(s), each generally but not necessarily administered by one department.

Uniform Presentation Framework
The primary objective of the Uniform Presentation Framework is to ensure that the Australian, state and territory governments present their financial statements on a standard, comparable basis. The format of the Uniform Presentation Framework is based on the reporting standards of the Australian Bureau of Statistics (ABS) Government Finance Statistics (GFS) framework.

Victorian Government Purchasing Board (VGPB)
The Victorian Government Purchasing Board (VGPB) was established under the Financial Management Act and replaced the State Tender Board from 1 February 1995. The VGPB meets bi-monthly to develop and approve policies, approve major requisitions from departments, and discuss related procurement policy and practice matters. Three of the VGPB members, including the Chairperson, are external appointees, and the remainder are appointed from government departments. VGPB reports to the Minister for Finance.

Warrant
A warrant is a written authority to spend specified sums during the financial year from the consolidated fund, the government’s bank account. A warrant must be signed by the Treasurer, the Auditor-General and the Governor. Conceptually, a warrant is similar to approval to draw cheques on a bank account.

Westminster system
The system of government that exists in Great Britain and which has been copied, to a greater or lesser extent, by many Commonwealth countries; so called because it is named after the precinct of Westminster, where the House of Commons and the House of Lords meet.

Whole-of-government
Includes departments and entities.

View other sections of this Discussion Paper:

Foreword
Introduction
1. Victoria’s current public finance system
2. The case for change
3. Possible directions for reform
4. Next steps
Appendix A: Extract from Public Administration Act 2004, Part 1, s. 5
Appendix B: Extract from Public Administration Act 2004, Part 5, s. 81
List of shortened forms
Glossary of terms