Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 1 of 2003-2004)

Overview

The Financial Management and Accountability Act 1997 was enacted by the Parliament of Australia to ensure that public sector entities effectively manage their financial resources. This Act provides the legislative framework for financial management and accountability in the public sector, aiming to enhance transparency, efficiency, and effectiveness in the use of public funds. The problem or gap this Act addresses is the need for a robust legal structure that governs financial practices, ensuring compliance with budgetary controls and accountability requirements across government departments and agencies. The policy objective is to establish a unified approach to financial management, thereby fostering prudent and responsible use of public resources. On 2 July 2003, Jim Kerwin, Division Manager of the Financial Reporting and Cash Management Division in the Department of Finance and Administration, issued a direction under section 32 of the Financial Management and Accountability Act 1997. This direction mandates the transfer of specified appropriation items from one agency to another. The document details the appropriation items, the agencies involved in the transfer, and the respective amounts. This action is intended to facilitate the realignment of financial resources to better align with departmental objectives and priorities, ensuring that funds are allocated in accordance with legislative mandates and fiscal responsibilities.

Scope and Application

The direction issued under section 32 of the Financial Management and Accountability Act 1997 pertains to the transfer of specific appropriations from one government agency to another. This instrument applies to the entities specified in the attached schedule, namely the Department of Communications, Information Technology and the Arts, and the Department of Education, Science and Training. The legislation involves the reallocation of funds as listed in the schedule, which in this case is $9,700,000 under the Appropriation Act (No. 1) 2003-2004 for Departmental Outputs. The authority to make such a direction stems from the Commonwealth's need to ensure financial resources are allocated efficiently and effectively across different government agencies. The scope of this direction is limited to the appropriation items and agencies listed in the schedule, and no broader exclusions or exemptions are specified within the text of this directive. The application of this legislation is confined to the transfer of funds within the parameters set by the Financial Management and Accountability Act 1997.

Key Provisions

Pursuant to section 32 of the Financial Management and Accountability Act 1997, the legislative instrument directs that specific moneys be transferred from one agency to another. Section 32 of the Act empowers the Division Manager, Financial Reporting and Cash Management Division, Department of Finance and Administration, to issue such directions. In this case, Jim Kerwin, Division Manager, has directed the transfer of funds as listed in the attached schedule. Column 1 lists the appropriation items, column 2 the old agency, column 3 the new agency, and column 4 the amounts to be transferred. For instance, appropriation item for the year 2003-2004 from the Department of Communications, Information Technology and the Arts is to be transferred to the Department of Education, Science and Training. The exact amount of $9,700,000 is specified for this transfer. The obligations imposed by this legislative instrument on the agencies involved are clear and straightforward. The 'old agency' must ensure that the specified funds are made available for transfer as directed. The 'new agency' must be prepared to receive the funds and account for them as part of its financial records. The Division Manager's direction is legally binding and must be complied with within the stipulated timeframe. Any failure to comply with this direction could lead to financial mismanagement and accountability issues, which are serious breaches under the Act. The Act also outlines the consequences for non-compliance with its provisions. While the specific offences, penalties, or consequences for breaching this direction are not detailed in the instrument itself, the Financial Management and Accountability Act 1997 generally provides for significant penalties. These can include fines, imprisonment, or both, depending on the severity of the breach. The Act aims to ensure that public funds are managed responsibly and transparently, and any failure to adhere to the direction can result in severe repercussions for both the agencies involved and the individuals responsible.