FINANCIAL PROCEDURE ACT 1957

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 61 FINANCIAL PROCEDURE ACT 1957 As at 15 November 2023 This text is ONLY AN UPDATED TEXT of the Financial Procedure Act 1957 by the Attorney General’s Chambers. Unless and until reprinted pursuant to the powers of the Commissioner of Law Revision under subsection 14(1) of the Revision of Laws Act 1968 [Act 1], this text is NOT AN AUTHENTIC TEXT. 2 FINANCIAL PROCEDURE ACT 1957 First enacted … … … 1957 (Ordinance No. 62 of 1957) Revised … … … 1972 (Act 61 w.e.f. 1 March 1972) Latest amendment made by P.U. (A) 75/2003 which came into operation on … … … 14 March 2003 PREVIOUS REPRINTS First Reprint … … … … 1983 Second Reprint … … … … 1993 Third Reprint … … … … 1999 Fourth Reprint … … … … 2006 3 LAWS OF MALAYSIA Act 61 FINANCIAL PROCEDURE ACT 1957 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title 2. (Omitted) 3. Interpretation PART II ACCOUNTING OFFICERS 4. Duties of accounting officers 5. Bank accounts PART III CONTROL AND MANAGEMENT OF PUBLIC FINANCES 6. Management and control of Consolidated Funds 7. Consolidated Fund accounts 8. Custody and investment of moneys 9. Trust accounts 10. Government trust funds 11. Contingencies Fund 12. State Reserve Fund 13. Payment of moneys 4 Laws of Malaysia Section 14. Guarantees 14A. Refunds, etc., charged on Consolidated Funds 15. Estimates and virement 15A. Controlling officers 16. Yearly statement of accounts 17. Write-off 18. Surcharge 19. Notification of surcharge 20. Withdrawal of surcharge 21. Recovery of surcharge PART IV STATE FINANCIAL AND ACCOUNTING PROCEDURE 22−35. (Consolidated with Part III) PART V REGULATIONS 36. Regulations FIRST SCHEDULE SECOND SCHEDULE THIRD SCHEDULE ACT 61 5 LAWS OF MALAYSIA Act 61 FINANCIAL PROCEDURE ACT 1957 An Act to provide for the control and management of the public finances of Malaysia, and for financial and accounting procedure, including procedure for the collection, custody and payment of the public moneys of the Federation and of the States, and the purchase, custody and disposal of public property, other than land, of the Federation and of the States and for matters connected therewith. [Peninsular Malaysia—1 January 1958, L.N. 1/1958; Sabah and Sarawak—1 January 1964, L.N. 348/1963] PART I PRELIMINARY Short title 1. (1) This Act may be cited as the Financial Procedure Act 1957. *(2) This Act shall not apply to the Railway Administration established under the Railway Ordinance 1948 [M.U. 8 of 1948], nor to any person in the service of that Administration. 2. (Omitted). Interpretation 3. In this Act, unless the context otherwise requires— *NOTE—The Railway Ordinance 1948 has been repealed and the Railway Administration in existence under the said Ordinance is dissolved—see sections 105 and 92, Railways Act 1991 [Act 463]. 6 Laws of Malaysia ACT 61 “accounting officer” includes every public officer who is charged with the duty of collecting, receiving, or accounting for, or who in fact collects, receives or accounts for, any public moneys, or who is charged with the duty of disbursing, or who does in fact disburse, any public moneys, and every public officer who is charged with the receipt, custody or disposal of, or the accounting for, public stores or who in fact receives, holds or disposes of public stores; “bank” in relation to the Consolidated Fund of a State, but not in relation to the Federal Consolidated Fund means any office or branch in Malaysia of a bank licensed under the provisions of the *Banking and Financial Institutions Act 1989 [Act 372] or such other banks registered under the Co-operative Societies Act 1993 [Act 502] or established under any written law as may be approved by the Minister; “Consolidated Fund” means the Federal Consolidated Fund and the Consolidated Funds of the States as constituted by Article 97(1) and (2) of the Federal Constitution, and references to the Consolidated Revenue Account, Consolidated Loan Account and Consolidated Trust Account are references to the accounts of the particular Fund intended; “Enactment” means a law made by the Legislature of a State, including Sarawak; “financial authority” used in relation to the Federal Consolidated Fund means the Treasury and in relation to the Consolidated Fund of a State means the State financial authority and “State financial authority” means the principal officer, by whatever title called, in charge of the financial affairs of a State; “financial year” means a period of twelve months ending on the 31st day of December in any year; “Legislature” in relation to the Federal Consolidated Fund means the Dewan Rakyat and in relation to the Consolidated Fund of a State means the Legislative Assembly of that State; *NOTE—The Banking and Financial Institutions Act 1989 [Act 372] has since been repealed by the Financial Services Act 2013 [Act 758] which comes into operation on 30 June 2013—see sections 271 and 272 of Act 758. Financial Procedure 7 “Menteri Besar or Chief Minister” in relation to the Consolidated Fund or estimates of a State means— (a) in the case of Sabah, the Minister responsible for finance in the State; and (b) in the case of the other States, the Menteri Besar or Chief Minister of the State and includes the State financial authority of the State, acting in accordance with any directions given to him by the Menteri Besar or Chief Minister; “public moneys” means all revenue, loan, trust and other moneys and all bonds, debentures, and other securities whatsoever raised or received by or on account of the Federation or by or on account of a State but does not include Zakat, Fitrah, Baitul Mal or similar Islamic religious revenues; “public services of the Federation” means the services specified in paragraph (1)(a), (b), (c), (d), (f) and (h) of Article 132 of the Federal Constitution; “public stores” means chattels the property of or in the possession or under the control of the Federation or of a State; “State accounting officer” means an accounting officer in the service of and engaged in handling the public moneys or public stores of a State. PART II ACCOUNTING OFFICERS Duties of accounting officers 4. Every accounting officer shall be subject to this Act and shall perform such duties, keep such books and render such accounts as may be prescribed by or under this Act or by instructions issued by the 8 Laws of Malaysia ACT 61 Treasury in matters of financial and accounting procedure not inconsistent therewith: Provided that a State accounting officer shall in addition be subject to any instructions of the State financial authority not inconsistent with the foregoing. Bank accounts 5. No accounting officer shall open any public or official account in any bank without the authority in writing of the Treasury in respect of public moneys of the Federation, or of the State financial authority in respect of public moneys of a State, and no accounting officer shall overdraw and no bank shall permit an overdraft on any public or official account unless the same be authorized by the Treasury, in respect of an account of public moneys of the Federation, or under the authority of a law made in accordance with Article 111 of the Federal Constitution. PART III CONTROL AND MANAGEMENT OF PUBLIC FINANCES Management and control of Consolidated Funds 6. (1) The management of the Federal Consolidated Fund and the supervision, control and direction of all matters relating to the financial affairs of the Federation not specifically assigned to any other person by any other law shall, subject to the Federal Constitution and this Act, vest in the Minister. (2) 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. Financial Procedure 9 Consolidated Fund accounts 7. There shall be maintained by the financial authority in respect of the Consolidated Fund three separate accounts— (a) 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); (b) 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 (c) 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 8. (1) Moneys paid to the Consolidated Fund may be kept with such bank or banks as the financial authority shall from time to time direct. (2) 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. (3) (a) Moneys standing to the credit of the Federation with any bank, or otherwise held by the Federation, may be invested by the Minister— (i) on deposit in any bank; (ii) in any of the investments authorized by the Trustee Act 1949 [Act 208], for the investment of trust funds; 10 Laws of Malaysia ACT 61 (iii) in any joint fund maintained by the Crown Agents for such investment; or (iv) 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. (b) 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— (i) on deposit in any bank; (ii) in securities issued or to be issued by the Federal Government; (iii) 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 (iv) 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. (c) 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. (4) 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 Financial Procedure 11 Consolidated Trust Account shall be paid to the credit of that trust account. (5) The investments specified in the First Schedule shall be authorized for the purposes of subparagraph (3)(a)(iv). Trust accounts 9. (1) The financial authority may establish such trust accounts as may be deemed necessary for the proper accounting of moneys in the Consolidated Trust Account. (2) The following moneys shall be paid to the credit of the trust account to which they relate: (a) all moneys appropriated for the purposes of any trust account; (b) 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; (c) all moneys paid by any person for the purpose of any trust account; and (d) repayment of any loan or advance made from moneys standing to the credit of the trust account and where applicable any interest as provide