Financial Procedure Act 1957

The management of the Consolidated Fund of a State and the supervision, control and direction of all matters relating to the financial affairs of a State not specifically assigned to any other person by any other law shall, subject to the Federal Constitution, the Constitution of the State and this Act, vest in the State financial authority.

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Consolidated Fund accounts

an account to be called the Consolidated Revenue Account in which account shall be kept of all moneys in the Fund other than such moneys as are mentioned in paragraphs (b) and (c);

an account to be called the Consolidated Loan Account in which account shall be kept of all moneys received by way of loan upon the public credit of the Federation or of the

State, as the case may be; and

an account to be called the Consolidated Trust Account in which account shall be kept of all moneys received subject to a trust and to be applied in accordance with the terms of the trust.

Custody and investment of moneys

All such moneys paid into a bank shall be deemed to be public moneys, the property of the Federation or of a State, as the case may be, lent by the Federation or the State to the bank.

Minister—

on deposit in any bank;

in any of the investments authorized by the

Trustee Act 1949 [Act 208], for the investment of trust funds;

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in any joint fund maintained by the Crown Agents for such investment; or

as otherwise authorized by federal law or by resolution of the Dewan Rakyat, and the investments together with any interest received therefrom shall form part of the Federal Consolidated Fund.

Moneys standing to the credit of a State with any bank, or otherwise held by the State, may be invested by the State financial authority—

on deposit in any bank;

in securities issued or to be issued by the Federal

Government;

with the written authority of the Treasury, in any of the investments authorized by the Trustee Act 1949, for the investment of trust funds, or in any joint fund maintained by the Crown Agents for such investment;

or

subject to the authority of State law or a resolution of the Legislature in any undertaking after consultation with the Treasury, and the investments, together with any interest received therefrom, shall form part of the Consolidated Fund of the State.

In subparagraph (b)(ii) “securities” includes stocks, funds, shares and bonds, and debentures and other instruments creating or evidencing a charge or lien on assets.

Interest received from the investment of any moneys in accordance with subsection (3) shall be accounted in the Consolidated

Revenue Account except that where it is so provided in any law or under the terms of any trust the interest received from the investment of any moneys standing to the credit of any trust account in the

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Consolidated Trust Account shall be paid to the credit of that trust account.

The investments specified in the First Schedule shall be authorized for the purposes of subparagraph (3)(a)(iv).

Trust accounts

The following moneys shall be paid to the credit of the trust account to which they relate:

all moneys appropriated for the purposes of any trust account;

all moneys received from the sale to any person or department of any articles purchased or produced, or for work paid for, with moneys standing to the credit of a trust account;

all moneys paid by any person for the purpose of any trust account; and

repayment of any loan or advance made from moneys standing to the credit of the trust account and where applicable any interest as provided in subsection 8(4).

Subject to any law and the terms of any trust, the financial authority shall in respect of any trust account or class of trust accounts specify the persons by whom and the manner in which the account or class of accounts shall be controlled.

Subject to any law and the terms of any trust, the financial authority may direct that any trust account shall be closed and thereupon after all liabilities of the account have been met the account shall be closed accordingly.

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Subject to any law and the terms of any trust, the financial authority may direct that any moneys standing to the credit of any trust account which are not required for the purposes of that account and the balance of moneys standing to the credit of a trust account closed under subsection (4) shall be paid as provided in subsection (6).

Where any moneys are required in accordance with subsection (5) to be paid the moneys shall, to such extent as they were appropriated out of moneys standing to the credit of the Consolidated

Loan Account, be paid to the Consolidated Loan Account and the balance shall be paid to the Consolidated Revenue Account.

Government trust funds

There shall be paid from the Consolidated Fund of a State into the funds specified in subparagraphs (i) and (ii) such sums as may from time to time be appropriated for the purposes of those funds by

State law—

in the case of Sabah and Sarawak, into any fund established and placed under the State financial authority by or in accordance with State law; and

in the case of the other States, into each of the funds specified in the Third Schedule or in accordance with paragraph (4)(b).

The Minister in the case of a fund specified in the Second

Schedule and the State financial authority in the case of a fund specified in the Third Schedule may apply the fund for the general purposes thereof or, subject to any written law, for such particular purposes as may from time to time be specified by resolution of the

Legislature.

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All moneys not applied in accordance with subsection (2) shall be paid by the Minister or the State financial authority, as the case may be, into the Consolidated Fund and shall be accounted in a separate account in the Consolidated Trust Account to be applied in the manner provided in subsection (2).

The Legislative Assembly of a State, other than Sabah or

Sarawak, may from time to time by resolution specify funds for the purposes of this section and subparagraph (1)(b)(ii), subsections (2)

and (3) shall apply to such funds as they apply to the funds specified in the Third Schedule.

Contingencies Fund

All moneys appropriated to the Contingencies Fund shall be paid from the Federal Consolidated Fund into the Contingencies Fund and shall be applied by the Minister in accordance with subsection (3), and all moneys not so applied shall be paid into the Federal

Consolidated Fund and shall be accounted in a separate account in the

Consolidated Trust Account.

The Minister may, if he is satisfied that there has arisen an urgent and unforeseen need for expenditure for federal purposes for which no other provision exists and for which funds cannot be provided under subsection 15(4), make advances from the

Contingencies Fund to meet that need.

State Reserve Fund

The Minister or the Menteri Besar or Chief Minister, as the case may be, shall by warrant under his hand authorize the issue from the

Consolidated Fund of such sums as may be required to meet the cost of any service charged upon the Consolidated Fund, and those sums shall be accounted in the Consolidated Revenue Account:

Provided that this subsection shall not apply to sums issued from the

Consolidated Fund to meet the cost of any service charged upon the

Consolidated Fund—

authorized by law to be met from moneys accounted in the

Consolidated Loan Account or the Consolidated Trust

Account; and

withdrawn from the Consolidated Fund in accordance with subsection (4) or (5).

The Menteri Besar or Chief Minister may by warrant under his hand authorize the issue from the Consolidated Fund of the

State of sums to meet the expenditure appropriated by a Supply

Enactment or authorized by law for part of a year before the passing of

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the Supply Enactment, and the sums shall be accounted in the

Consolidated Revenue Account:

Provided that in neither of the above cases shall the aggregate of the sums under each purpose of expenditure exceed the total sum so appropriated or authorized in respect of the purpose.

Notwithstanding any general or specific authority which may have been given by him, it shall be within the discretion of the

Minister or the Menteri Besar or Chief Minister, as the case may be, to limit or suspend any expenditure so authorized.

The Minister or the Menteri Besar or Chief Minister, as the case may be, may by warrant under his hand authorize the issue from the

Consolidated Fund of sums to be applied for the purposes for which funds shall have been appropriated by or in accordance with any written law authorizing the raising of a loan and those sums shall be accounted in the Consolidated Loan Account.

The financial authority or any person specified under subsection 9(3) in respect of any trust account or class of trust accounts may withdraw moneys accounted in the Consolidated Trust Account.

Every warrant issued under this section for the service of any financial year shall lapse and cease to have any effect at the close of one calendar month following the financial year; and no payment in respect of any service authorized under the warrant shall be made during that month except in respect of work performed, goods received, services rendered or any other contractual arrangement made prior to the end of that year and properly chargeable to the accounts of that year.

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Guarantees

No guarantee involving a financial liability shall be binding upon a State unless it is entered into under a State law passed in accordance with Clause (3) of Article 111 of the Federal Constitution and such guarantee shall not be given except with the approval of the

Federal Government and subject to such conditions as may be specified by it.

Refunds, etc., charged on Consolidated Funds

The Treasury or the State financial authority with the prior approval of the Treasury, may, if it considers it essential and expedient to do so for the proper performance of a service related to the same

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purpose as provided for in paragraph (a) hereof but paid for out of moneys accounted for in a trust account, specify by warrant any of the public offices authorized under paragraph (a) to be employed for the purpose of that service and in such a case the personal emoluments of such offices and all incidental expenses thereto may be paid from the appropriate provision authorized for such service and accounted for in the same trust account.

Subject to Article 112 of the Federal Constitution, no addition to the public offices provided under any purpose of the State estimates may be made nor may the appropriation of the established salaries under any purpose be altered either as regards the number of appointments or the rates of personal emoluments, unless the approval of the Menteri Besar or Chief Minister shall first have been obtained.

If the exigencies of the public service render it necessary to alter the proportions assigned to the subdivisions under a purpose of expenditure shown in the estimates referred to in subsection (1) or to create a new subdivision, the Treasury or the Menteri Besar or Chief

Minister, as the case may be, may direct that there shall be applied in aid of any subdivision which may be deficient or any new subdivision a further sum out of any surplus arising on any other subdivision of the same purpose provided that the amount appropriated under any purpose of expenditure by a Supply Act or Enactment is not thereby exceeded.

Controlling officers

Every controlling officer shall, subject to any written law and of any instructions issued by the financial authority under section 4, prescribe the extent to which the powers and duties conferred or imposed upon him may be exercised or performed on his behalf by any accounting officer under his control, and give such directions as may be necessary to secure the proper exercise or performance of such powers and duties.

Every controlling officer shall, if so required by the Minister or the State financial authority, as the case may be, to the extent that he is responsible for the control of the public moneys to which any part of the statements referred to in section 16 relates, certify under his hand, subject to such explanation or qualification as he may think necessary, the correctness of that part of the statement and the propriety of the charges shown therein.

Every controlling officer shall report in writing to the appropriate Service Commission and financial authority every event of possible surcharge under paragraph 18(a), (b), (c), (d) or (e) which arises or occurs under his control.

The officer appointed under subsection (1) to be controlling officer in respect of each purpose of expenditure provided for any financial year shall be designated by the title of his office in the estimates of expenditure in respect of that year laid before the

Legislature pursuant to Article 99 of the Federal Constitution or pursuant to the Constitution of the State, and such designation in the estimates shall constitute sufficient notification of the appointment.

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Yearly statement of accounts

a full and particular statement of the Consolidated Revenue

Account showing under the purposes and subdivisions of the estimates laid before the Legislature in respect of that year the amounts estimated to be received and spent in that year and the amounts actually received and spent together with amounts actually received and spent under any purposes and subdivisions not included in the estimates so laid;

a full and particular statement of the Consolidated Loan

Account showing receipts and expenditure of loan moneys;

a statement of receipts and expenditure of moneys accounted in the Consolidated Trust Account;

a statement of the accounts of any fund created by the Federal

Constitution or by or under section 10 and not accounted in the Consolidated Trust Account;

so far as is practicable, a statement of the assets and liabilities of the Federation or the State at the end of the financial year, the manner in which the assets are invested or held, and the general purposes in respect of which the liabilities are outstanding; and

such other statements as the financial authority may think fit.

As soon as possible after the Auditor General has caused the statements referred to in subsection (1) to be examined and audited, they shall be laid before the Legislature.

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Write-off

to write off losses or deficiencies of public moneys and the value of lost, deficient, condemned, unserviceable or obsolete stores; and

to abandon irrecoverable amounts of revenue, debts and overpayments.

Surcharge

has failed to collect any moneys owing to the Federal

Government or the Government of the State for the collection of which he is or was responsible;

is or was responsible for any improper payment of public moneys of the Federal Government or the Government of the

State or for any payment of public moneys which is not duly vouched;

is or was responsible for any deficiency in, or for the destruction of, any public moneys, stamps, securities, stores, or other property of the Federal Government or the

Government of the State;

being or having been an accounting officer, fails or has failed to keep proper accounts or records; or

has failed to make any payment, or is or was responsible for any delay in the payment, of public moneys of the Federal

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Government or the Government of the State to any person to whom such payment is due under any law or under any contract, agreement or arrangement entered into between that person and the Federal Government or the Government of the

State, and if a satisfactory explanation is not, within a period specified by the

Commission, furnished to the Commission with regard to the failure to collect, improper payment, payment not duly vouched, deficiency or destruction, or failure to keep proper accounts or records, or failure to make payment, or delay in making payment, the Commission may surcharge against the said person a sum not exceeding the amount of any such amount not collected, such payment, deficiency, or loss or the value of the property destroyed, as the case may be; and with regard to the failure to keep proper accounts or records, or the failure to make payment, or the delay in making payment, the Commission may surcharge against the said person such sum as the Commission may think fit.

Notification of surcharge

from the salary of the person surcharged if the Minister or the

Menteri Besar or Chief Minister so directs; or

from the pension of the person surcharged if the Minister so directs, by equal monthly instalments not exceeding one-fourth of the total monthly salary or pension, as the case may be, of the officer.