Name: Siti Nur Aishah Binti Mohd Rosman

Matrix No: 245078

Chapter 3 summary: Legal Framework And National Financial Institutions

Legality

Legality is all matters pertaining to financial administration must comply with all
applicable laws and regulations enacted by the Parliament and other authorities. Legality
resources are important to ensure that each agency will adopt similar rules and guidelines to
facilitate accounting procedures and checks and balances on management of public finances. The
source of legality is Federal Constitution. Financial Procedure Act 1957, Audit Act 1957,
Treasury Instruction, Statutory Bodies Act, Circular or Treasury Bills and other laws such as the
State Enactment. There have five legality principles in constitution such as receipts of public
money, deposits of public money, spending of public money, payment of public money and
Accounting of public money.

Accountability

Accountability is an obligation of a civil servant to carry out activities in accordance with

the procedures, instructions and regulations, and to explain to the public upon request. The
accountability goal is to ensure that the public management is made in accordance with the laws
and regulations and to provide an effective work system. Moreover, there have several
accountability instruments such as fiscal accountability, management accountability and programme
accountability. Not only that, there also have three stages of accountability. The first stage is control of
the parliament through the budget draft, report of Auditor General and Public Account Committee (PAC)
presentation. The second stages is treasury control that only remit resources to public agencies according
to the amount approved by the legislature and the last stage is control of the ministry / department that the
officer should play their own role on that ministry/ department.

3M CONCEPT

Definition of 3M concept is Money Keeper, Money Passer and Money Checker. There have
several advantages and disadvantages of 3M Concept. The first is to provide clear administrative
guidelines and tools to all parties with due respect on authority and functions supplied and Facilitate
accountability identification carried out by the respective institutions. The disadvantage is narrow focus
held by the individuals involved. Prefer existing functions without wanting to expand and excessive
control. There have role of three main agencies. The first is Treasury that was given the function as
money keeper. The next agencies is parliament that is honoured with the functions as money passer and
the last agencies is auditor general that their role is to ensure that public servants carry out their duties
with transparency and efficiency.