7.14 Accountability arrangements for subsidiary companies
The enabling legislation of a Government Board (in the case of Government Boards established by statute) may expressly state whether a subsidiary body may be established.1 This is particularly the case with incorporated bodies.
In cases where the enabling legislation of a Government Board does not provide an express power for a Government Board to establish a subsidiary, the Government Board must obtain the prior approval of the relevant portfolio Minister. In these circumstances, the additional approval of the Treasurer may also be required. Those Government Boards subject to the SBFA Act may require the prior approval of the Treasurer for matters classified as ‘other financial arrangements’, which include establishing a subsidiary. Similarly, the Financial Accountability Act 2009 requires the Treasurer's approval for the formation of a company by a department where the formation involves the use of public moneys.
A Government Board then has a duty to ensure that a subsidiary does not engage in any activity that the Government Board itself does not have the power to engage in.
Agencies must disclose information about other bodies formed or acquired by the agency including their roles, functions, responsibilities, achievements and costs. This information is a mandatory requirement, however if sufficiently disclosed in the financial statements it is not necessary to repeat the information. The Department of the Premier and Cabinet's Annual Reporting Requirements for Queensland Government Agencies details the information that must be disclosed.
The annual financial statements of the Government Board must be prepared in accordance with the appropriate accounting standards pertaining to the preparation of consolidated group accounts (Refer also to Chapter 10 of this Guide which deals with Evaluating Government Board Performance).
- A Government Board that is an advisory body and is not constituted by statute does not have the legal power to establish a subsidiary.