Explanatory Statement
Financial Management and Accountability Act 1997, Section 32 - Adjustments of Appropriations on Change of Agency Functions
The instrument to which this explanatory statement relates
This explanatory statement relates to an instrument (the instrument) entitled “Direction under Section 32, Financial Management and Accountability Act 1997”, dated 15 November 2005 and numbered 11 of 2005-2006.
The legislative authority under which the instrument is made
Section 32 of the Financial Management and Accountability Act 1997 (the FMA Act) applies if a function of an Agency (the old Agency) becomes a function of another Agency (the new Agency), either because the old Agency is abolished or for any other reason.
Subsection 32(2)(a) of the FMA Act enables the Finance Minister to, amongst other things, issue one or more directions to transfer from the old Agency to the new Agency some or all of an amount that has been appropriated for the performance of that function by the old Agency.
As noted in the FMA Act, the Finance Minister has delegated his power under section 32 to the Chief Executive of the Department of Finance and Administration. By way of an instrument dated 30 November 2004, the Chief Executive of the Department of Finance and Administration has, in turn, delegated the power to the General Manager, Financial Management Group, and the Division Manager, Financial Reporting and Cash Management Division.
Purpose of the instrument
The instrument directs that non-lapsing appropriations from prior years totalling $2,791,483.44, provided to the Department of Family and Community Services, be transferred to the Department of Employment and Workplace Relations.
Background
On 26 October 2004, the Governor-General issued an Administrative Arrangements Order which was gazetted in Special Notices Gazette S427 of 27 October 2004, transferring responsibility for income support and programmes for people of working age, and to help people with disabilities obtain employment, other than supported employment, from the Department of Family and Community Services to the Department of Employment and Workplace Relations.
An appropriation adjustment, pursuant to section 32 of the FMA Act, is required to ensure that appropriation provided to the Department of Family and Community Services for performance of these functions is transferred, as agreed, to the Department of Employment and Workplace Relations.
The amount to be transferred has been agreed between the Chief Financial Officers of the Department of Family and Community Services and the Department of Employment and Workplace Relations in line with established processes.
Notes on the instrument
The instrument provides that the moneys listed in column 4 of the schedule for the Department of Family and Community Services item be transferred to the Department of Employment and Workplace Relations item listed in column 1.
Overview
The Financial Management and Accountability Act 1997 was enacted by the Commonwealth Parliament to provide a framework for the financial management and accountability of Commonwealth entities. The Act addresses the need for clear and effective mechanisms for the allocation, management, and control of public funds. Section 32 of the Act specifically pertains to the adjustments of appropriations when there is a change in agency functions, ensuring that financial resources are appropriately aligned with the responsibilities of the relevant agencies. The policy objective is to maintain fiscal integrity and ensure that appropriations are used for their intended purposes, even when agency functions are re-allocated. The instrument in question, dated 15 November 2005, directs the transfer of non-lapsing appropriations from the Department of Family and Community Services to the Department of Employment and Workplace Relations, following the reassignment of certain functions as per the Administrative Arrangements Order issued on 26 October 2004. This transfer is in accordance with established processes and has been agreed upon by the Chief Financial Officers of the respective departments.
Scope and Application
The Financial Management and Accountability Act 1997 governs the management of public funds within Australian agencies and the accountability of public officers to the Parliament. Section 32 of the Act applies specifically to instances where a function previously assigned to an agency (referred to as the "old Agency") is reassigned to another agency (the "new Agency") due to the abolition of the old Agency or for any other reason. Under this section, the Finance Minister is empowered to issue directions that transfer appropriations from the old Agency to the new Agency, ensuring continuity of funding for the reassigned functions. The instrument, dated 15 November 2005, directs the transfer of $2,791,483.44 in non-lapsing appropriations from the Department of Family and Community Services to the Department of Employment and Workplace Relations. This adjustment follows an Administrative Arrangements Order issued by the Governor-General on 26 October 2004, which transferred certain responsibilities from the former to the latter department. The transfer of funds is executed in accordance with established procedures and has been agreed upon by the Chief Financial Officers of both departments. This instrument reflects the Commonwealth's jurisdictional reach in managing and reallocating appropriations to align with the changing responsibilities of government agencies.
Key Provisions
The Financial Management and Accountability Act 1997 (FMA Act) contains provisions to adjust appropriations when the functions of one agency are transferred to another. Section 32 of the FMA Act applies when a function of an agency (the old Agency) is transferred to another agency (the new Agency) due to abolition or any other reason. Subsection 32(2)(a) allows the Finance Minister to issue directions for the transfer of appropriated amounts from the old Agency to the new Agency. This process ensures that the financial resources align with the agency responsible for the functions.
The instrument, dated 15 November 2005, directs that non-lapsing appropriations totaling $2,791,483.44, which were provided to the Department of Family and Community Services, be transferred to the Department of Employment and Workplace Relations. This transfer follows the administrative arrangements order issued on 26 October 2004, which moved responsibilities for income support and employment programs from the Department of Family and Community Services to the Department of Employment and Workplace Relations.
Under the FMA Act, the Finance Minister has delegated his authority to the Chief Executive of the Department of Finance and Administration. This delegation extends further to the General Manager, Financial Management Group, and the Division Manager, Financial Reporting and Cash Management Division. The instrument is a manifestation of this delegation, ensuring the smooth transition of financial resources as mandated by section 32.
Breaches of the provisions under the FMA Act may result in civil or criminal consequences, though specific penalties are not detailed in the instrument. The obligations imposed on the agencies include ensuring that the transfer of appropriations is carried out as directed by the relevant authority, in accordance with established processes and agreements between the Chief Financial Officers of the involved departments.
The instrument underscores the importance of financial accountability and transparency in governmental transitions, ensuring that all appropriations are appropriately allocated to the agencies responsible for their intended functions. The outlined process facilitates the efficient management of financial resources and maintains the integrity of the appropriations system.