A ministerial direction is a direction addressed to the board of a public entity requiring it to act in a particular way in relation to certain aspects of its work.
The board and officers of the public entity should follow such a direction unless it is unlawful for some reason.
Some ministerial directions are authorised by legislation. These directions are normally written. Sometimes the Act under which a direction is made requires that directions must be noted in the annual report of the public entity or the annual report of the department.
A ministerial direction can be issued without the backing of an Act of parliament. These non-statutory directions are usually in writing but may not be required to be in written form.
Some directions can emanate from a minister other than the portfolio minister responsible for a particular public entity. For example, the Minister for Finance may issue a direction that affects a particular public entity despite not being the minister responsible for that public entity.
The board should:
- ensure that the nature and terms of the ministerial directions are complied with by the board and officers of the public entity
- assume that a ministerial direction must be complied with, unless the board has reliable advice that the direction is unlawful or cannot be complied with for some other reason
- ensure that, where a ministerial direction cannot be complied with for any reason, the minister is advised as soon as possible.
Ministerial Directions Not Issued under Acts of Parliament
It is part of a minister’s responsibility to parliament to take necessary action to ensure the efficient and proper discharge of the duties of the portfolio department and public entities. This action includes providing directions to public entities.
Ministerial directions most often relate to matters of general policy and procedures rather than to the resolution of particular public entity disputes or matters about an individual person.
Ministerial Directions Issued under Acts of Parliament
The establishing legislation of many public entities will articulate the minister’s powers of direction. These may be both broad and general and designed to give the minister extensive power of direction, or they may be quite limited or restricted to certain types of matters.
Victorian legislation deals with aspects of governance specifically refer to ministerial directions. This includes the following:
- The Minister for Finance may give a written direction to an authority, public body, accountable officer or chief finance and accounting officer. The direction may relate to anything covered under the Financial Management Act 1994. The directions may include, for example, management of public money, management of assets and procedures for purchase and supply of goods and services for or on behalf of the state (s.59).
- Standing directions of the Minister for Finance under the Financial Management Act.
- State Owned Enterprises Act 1992 applies to all state owned enterprises including:
- State bodies: directions from the Treasurer, for example, regarding repayment of capital of a state body following consultation with the portfolio minister and board.
- State business corporations: written directions, for example, regarding community service obligations and payment of capital.
- Public Administration Act 2004:
- The Premier may direct the State Services Authority to conduct a review of management systems, structures or processes (s. 50) or a special inquiry into any matter relating to a public service body, a public entity or a special body (s. 52) .
- The Premier may direct the State Services Authority to conduct a special review into any matter relating to a public service body or a public entity (s. 56).
- The relevant minister may direct a public entity regarding a public entity’s proposal to form a subsidiary (s. 84).
- On the recommendation of the Premier, the Governor in Council may require all public entities or a specified public entity or class of public entity to comply with a specified whole of government policy of any kind providing certain requirements have been met (s. 92).
The Minister for Finance has issued a series of standing directions that are applicable across the Victorian public sector. These are under regulation 12 of the Financial Management Regulations 1994 or regulation 16 of the Financial Management Regulations 2004.
Many of the standing directions cover matters of financial reporting detail. Some relate to governance including:
- a general delegation to a Deputy Secretary in the Department of Treasury and Finance of the power to issue directions under ss.8, 50 and 51 of the Financial Management Act
- the public entity must implement and maintain a financial code of practice relating to the probity of financial management (standing direction 2.1)
- directions on the requirement for an audit and risk management committee formed under specific guidelines and required to operate according to a number of specified procedures (standing direction 2.2)
- directions regarding the operations of the internal audit function and the relationship between the public entity’s audit and risk management committee and the external auditor (standing directions 2.5 and 2.6)
- directions for the public entity’s financial risk management (standing direction 2.3)
- directions for finance delegations within the public entity (standing direction 2.4).