ACT No. I of 2004 AN ACT to amend the Financial Administration and Audit Act, BE IT ENACTED by the President, by and with the advice and consent of the House, in this present Parliament assembled, and by the authority of the same, as follows>-

I assent.

G UIDO DE M ARCO

(L.S.)

President

27th February, 2004

ACT No. I of 2004

AN ACT to amend the Financial Administration and Audit Act,

BE IT ENACTED by the President, by and with the advice and

consent of the House, in this present Parliament assembled, and by the

authority of the same, as follows>-

The short title of this Act is the Financial Administration and

Audit (Amendment) Act, 2004, and shall be read and construed as one

with the Financial Administration and Audit Act, hereinafter referred

to as “the principal Act”.

Article 2 of the principal Act shall be amended as follows>

(a) immediately after the definition of “financial year”

therein there shall be added the following new definitions>

“ “internal audit” shall have the same meaning assigned

to it by article 2 of the Internal Audit and Financial

Investigations Act<

“irregularity” means an act or omission by any person

in breach of a contractual agreement with the Government or

in breach of any relevant provision of law or of any act the

binding force of which derives from any treaty or international

agreement entered into by Malta”< and

(b) for the definition of “public moneys” therein, there shall

be substituted the following>

“ “public moneys” means all revenue, loan, trust and

other funds received or managed or held by, for or on account

of the Government, including moneys which the Government

pays out or disburses from funds received from any

international or supranational organization or body or from

any of its institutions or bodies<”.

Subarticle (1) of article 4 of the principal Act shall be amended Amendment of

article 4 of the

as follows>

principal Act.

(a)

paragraph (f) thereof shall be renumbered as paragraph

(i)< and

(b) immediately after paragraph (e) thereof there shall be

inserted the following new paragraphs>

“(f) for the co-funding of economic and social

development programmes and initiatives from public moneys<

(g) for effecting adjustments, setoffs in and payments

from any account relating to public moneys as may be required

in connection with the co-financing referred to in the previous

paragraph and funding from any international or supranational

organization or body or from any of its institutions or bodies<

(h) for the preparation, codification and publication of

such sets of accounting standards, methodologies, policies

and procedures as may from time to time be deemed necessary

or expedient for the better carrying the provisions of this Act

into effect<”.

Immediately at the end of article 25 of the principal Act there Amendment of

article 25 of the

shall be added the following proviso>–

principal Act.

“Provided that the Minister may for such purposes from time

to time authorise the issue of such sums out of the Consolidated

Fund (not exceeding ten per cent of the sum appropriated for the

financial year, or such other percnetage as the House may by

resolution from time to time approve) as he may consider necessary

for the purpose without the need of any further appropriation other

than this Act, and he shall make a report thereon to the House

within one month of such appropriation, and where the House is

not sitting at the time not later than the third sitting after the House

reconvenes.”

Immediately after article 48 of the principal Act there shall be

added the following new articles 49 to 52>

49. (1) Where, on the detection of any irregularity

or fraud against public moneys, a report made in terms of the

provisions of the Auditor General and National Audit Office

Act or the Internal Audit and Financial Investigations Act is

sent or referred to a Head of Department he shall thereupon

take all necessary measures for the protection of such public

moneys, including the levying of administrative penalties in

accordance with regulations made under article 52 and legal

action for the recovery of the amount of any deficiency, loss,

improper payment caused or made as a result or in the course

of any such irregularity or fraud and the provisions of article

466 of the Code of Organization and Civil Procedure shall

apply to any amount recoverable as aforesaid.

(2) Notwithstanding any stipulation to the

contrary any bond, bank guarantee or other security given for

the proper performance of any contract payable out of public

moneys shall also extend to guarantee the recovery of any

moneys or administrative penalties in connection with the

contract and for which the person supplying the bond, bank

guarantee or other securitymay be liable.

(3) Where the deficiency, loss, or improper

payment as a result of the irregularity or fraud involves funds

received by the Government from any international or

supranational organization or body or from any of its

institutions or bodies or under the terms of any treaty or other

agreement between States any proceedings under this article

shall take place in consultation with the person in Malta, if

any, specifically charged with authorising the payment or

release of such funds by the Head of Department>

Provided that the lack of such consultation shall not in

any way whatsoever affect the validity of any proceedings

taken under this article.

(4) Where two or more persons are responsible

for the irregularity or fraud which resulted in the deficiency,

loss, or improper payment those persons shall be held jointly

and severally liable therefor together with any other person

who, although in duty bound to do so, failed to take reasonable

precautions and to exercise due diligence to prevent the

irregularity or fraud.

(5) Nothing in this article or in this Part shall be

construed as precluding any other person interested from

taking action, whether jointly with the Head of Department

or otherwise, for the recovery of any sum recoverable under

the provisions of this article.

(6) For the purposes of this article and the other articles

under this Part, “Head of Department” includes any director,

manager, secretary or other principal officer of a body,

whether vested with legal personality or not, which is

responsible for administering, holding or using public moneys

or which is a recipient or beneficiary of public moneys, or

who is a person having a power of representation of such a

body or having an authority to take decisions on behalf of

that body or having authority to exercise control within that

body.

50. On any amount recoverable under article 49 there

shall be charged interest equivalent to the average weighted

rate applicable on the due date on the local money market for

short-term public finance operations for the period during

which the amount remains unpaid from the date on which it

becomes payable.

51. For the purpose of recovering any moneys that may

Information.

be recoverable under the provisions of article 49 any Head of

Department who receives or to whom is referred a report as

provided in that article may, without prejudice to the

constraints imposed by professional secrecy according to law,

require any person managing public moneys to provide any

information in his possession relevant for the said purpose.

Administrative

52. The Minister may by regulations provide for

administrative penalties which may be imposed for any

irregularity, for the procedure to be followed for the imposition

of such penalties and for any other matter incidental or

supplementary to any of the foregoing matters >

Provided that an administrative penalty may not be

greater than fifty thousand liri.”.

Immediately following article 6 of the Set-off and Netting on

Insolvency Act, there shall be inserted the following new article>

(1) The Minister may make regulations to give

effect to the provisions of this Act and, without prejudice to

the generality of the foregoing, may in particular make

regulations to transpose and implement any Directive of the

European Parliament and of the Council on financial collateral

arrangements< and, in particular, regulations relating to any

aspect concerning financial collateral agreements and similar

arrangements< such regulations may define financial collateral,

may provide for the rights and obligations of the collateral

taker and the collateral provider, establish formal requirements

and rules on the enforcement of financial collateral agreements

and similar arrangements, the recognition of title and the non-

applicability of certain rules of the Civil Code and of legal

provisions relating to bankruptcy and insolvency, and such

regulations may also provide for relative rules on conflict of

laws and for any other matters as are incidental or connected

thereto.

(2) Regulations made under this article may be

made and published in the English language only.”.

Passed by the House of Representatives at Sitting No. 104 of the 23rd February,

2004. A NTON T ABONE

Speaker

R ICHARD J. C AUCHI

Clerk to the House of Representatives

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press