Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 1 of 2001-2002)

Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted by the Parliament of Australia to ensure effective financial management and accountability within the Commonwealth. This Act was introduced to address the need for improved financial oversight, transparency, and management of public funds. It establishes a framework for financial management practices and reporting requirements for Commonwealth entities. The policy objective of the FMA Act is to enhance the efficiency and effectiveness of financial management within the public sector, thereby ensuring that public funds are used responsibly and in accordance with legislative mandates. The legislative instrument in question, issued under section 32 of the FMA Act, involves a direction by Jim Kerwin, Manager of Commonwealth Financial Reporting in the Department of Finance and Administration, to transfer specified funds from one agency to another. This directive reflects the ongoing implementation of financial reforms and reallocations to ensure that funds are appropriately directed towards achieving the intended outcomes and objectives of government programs and services. The transfer of $20,300,000 from the Department of Industry, Science and Resources to the Australian Geological Survey Organisation exemplifies the practical application of the FMA Act in managing and reallocating financial resources to better support national priorities.

Scope and Application

The direction issued under Section 32 of the Financial Management and Accountability Act 1997 applies to the transfer of specific moneys from the 'old agency' to the 'new agency' as outlined in the attached schedule. This particular legislative instrument involves the transfer of funds from the Department of Industry Science and Resources to the Australian Geological Survey Organisation, specifically relating to the appropriation item 'Departmental Outputs - Outcome 2' for the financial year 2001-2002. The geographic and jurisdictional reach of this direction is within the Commonwealth, impacting the allocation of budgetary resources between federal entities. The Act does not specify any exclusions, exemptions, or thresholds, but rather directly instructs the transfer of identified funds. This directive extends the application of the Financial Management and Accountability Act 1997 by specifying the manner in which certain appropriations are to be managed and reallocated between government agencies.

Key Provisions

The primary directive of this legislative instrument is to authorise the transfer of specified funds from one government agency to another, in accordance with section 32 of the Financial Management and Accountability Act 1997. Section 32 empowers the Manager, Commonwealth Financial Reporting, to direct such transfers when deemed necessary. This particular direction mandates the transfer of $20,300,000 from the Department of Industry Science and Resources to the Australian Geological Survey Organisation. This transfer pertains to the Appropriation Act (No. 1) 2001-2002, specifically for the Departmental Outputs Outcome 2 (sections 32(1)(a) and (2)). The obligations and requirements imposed by this Act primarily focus on ensuring that financial transactions within government agencies are managed in a transparent, accountable, and lawful manner. The Manager, Commonwealth Financial Reporting, is obligated to ensure that the transfer of funds is executed in accordance with the direction provided. This includes verifying the accuracy of the amounts listed in the schedule, ensuring that the correct appropriation items are transferred, and confirming that the 'old agency' and 'new agency' are correctly identified (section 32(3)). The Manager must also ensure that all relevant documentation and records are maintained and updated to reflect the transfer of funds. Failure to comply with the provisions of this Act could result in various civil and criminal consequences. While the specific offences and penalties are not detailed in the instrument itself, breaches of the Financial Management and Accountability Act 1997 could lead to significant penalties under the broader legislative framework. For instance, misapplying public money or failing to maintain proper financial records could result in criminal charges, including fines and imprisonment. Under the Public Sector Management Act 1994, officials found to have acted negligently or dishonestly in the performance of their duties could face further disciplinary action, including dismissal from service. The Act also allows for the recovery of any misapplied funds, ensuring that public money is used for its intended purpose.