This article applies to public bodies and Departments.
Financial Management Legislation Amendment Bill 2025 (Vic)
On 14 August 2025, the Financial Management Legislation Amendment Bill 2025 (Vic) (the Bill) passed the Victorian Parliament. The Bill received the Royal Assent and commenced on 19 August 2025.
Operationally Significant Changes
The Bill inserts a range of amendments into the Financial Management Act 1994 (Vic) (the Act). The most significant changes (from an operational perspective) include:
- the new financial management responsibilities for the board of public bodies;
- stating explicitly that the responsibility for the financial management and performance of the public body lies with the chief financial officer;
- new requirements relating to the budget of the public body and
- the removal of the requirement of a warrant to access funds.
The Bill also clarifies and enshrines in legislation the responsibilities of the accountable officer and chief financial officer (CFO) of public bodies, such as the requirement to ensure financially effective, economical, efficient and sustainable management of the operations and public resources for which the body is responsible.
Further Information
New Board Responsibilities
The Bill also introduces clearer responsibilities for boards of public and prescribed bodies to ensure proper financial oversight. Under new section 43A, boards now have a legislative requirement to ensure that Accountable Officers meet their general obligations under the Act. Boards must report on this compliance to the Head of the Department of Treasury and Finance (DTF), and for public bodies, also to the Department Head responsible to the relevant Minister
Accountable officer and Chief Financial Officer
The changes introduced in sections 43A to 44AD strengthen financial oversight and accountability across government departments, public and declared bodies. They clarify and expand the responsibilities of accountable officers and CFOs when it comes to managing public financial information and disclosing material risks.
Under the new provisions, accountable officers are required to manage their organisation’s operations and resources in a way that is effective, economical, efficient and sustainable. This includes establishing effective financial controls and reporting mechanisms and ensure the CFO fulfils their statutory responsibilities under the Act.
The reforms also introduce new requirements for sharing financial information and reporting material financial risks. Accountable officers must now provide financial information to relevant individuals such as ministers or department heads promptly upon request, or when they themselves identify that the information should be shared.
Similarly, CFOs of departments and public bodies are now obliged to report any material financial risks that could affect the State’s financial position or performance. These disclosures must be made to specified bodies, which may include the CFO or the Department Head of DTF, depending on the type of entity involved.
Obligations relating to the budget
Finally, the Bill introduces new obligations encouraging government agencies to stay within the approved budget and to report emerging financial risks through a formal early warning system. To support this, section 23D(1)(b) has been amended to reflect the new requirement.
To further support this approach, new section 44C requires departments and public bodies to notify the Head of the Department of Treasury and Finance in writing if they are likely to exceed their budgets. This notification must include a plan, prepared in a form set by DTF, outlining how the organisation intends to manage the budget risk and address any related financial issues. The Head of DTF is also empowered to request additional information about the budget risk or any details contained in the submitted plan.
Please click here to access the full Bill.
