Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 13 of 2002-2003)

Overview

The Financial Management and Accountability Act 1997 was enacted by the Parliament of Australia to establish clear financial management and accountability frameworks for Commonwealth entities. This legislation was introduced to address the need for a consistent and transparent approach to financial management across all government agencies, ensuring that public funds are utilised efficiently, effectively, and in accordance with the law. The Act aims to provide the necessary mechanisms for financial reporting, budgeting, and oversight, thereby enhancing the integrity and efficiency of public sector financial management. In the context of this legislative instrument, the policy objective is to facilitate the transfer of specified funds from one government agency to another, ensuring that financial resources are appropriately allocated to support the intended outcomes and activities of the respective agencies. This transfer, as directed by James Kerwin, Manager of the Financial Reporting and Cash Management Division within the Department of Finance and Administration, is a practical application of the Act’s provisions to manage and reallocate budgetary resources as required.

Scope and Application

The direction under section 32 of the Financial Management and Accountability Act 1997 pertains to the transfer of specific appropriation items from one agency to another within the Commonwealth. The Manager, Financial Reporting and Cash Management Division, Department of Finance and Administration, exercises authority granted under the Act to ensure the financial resources are managed efficiently and effectively. The direction applies to the appropriation items listed in the attached schedule, specifying the old agency and the new agency responsible for the financial management of these items. The geographic and jurisdictional reach of this direction is confined to the Commonwealth of Australia, with the affected entities being government departments and agencies. The direction does not specify any exclusions, exemptions, or thresholds within its scope. The implementation of this direction is further facilitated through subordinate instruments, which may detail additional requirements or procedures for the transfer of funds as per the Act. This legislative instrument ensures that financial management within the government is transparent and accountable, aligning with the principles set out in 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 the transfer of specified funds from one agency to another. Specifically, section 32 allows the Manager, Financial Reporting and Cash Management Division, Department of Finance and Administration, to issue such a direction. This particular direction mandates that certain appropriation items listed in column 4, be moved from the 'old agency' in column 2 to the 'new agency' in column 3, as detailed in the attached schedule. For instance, the direction requires the transfer of $150,000 from the Attorney General’s Department to the Federal Magistrates Service for the Administered Expenses – Outcome 1 under the Appropriation Act (No. 1) 2002-2003. The obligations under this Act are clear and straightforward. The 'old agency' must ensure that the specified funds are available for transfer, while the 'new agency' must be prepared to receive and account for the transferred funds. The 'old agency' must update its records to reflect the transfer, and the 'new agency' must do the same upon receipt. This process ensures that financial records are accurate and that the accountability for the appropriated funds is maintained throughout the transfer. Breaches of the provisions set out in this legislative instrument could lead to serious consequences. The Financial Management and Accountability Act 1997 outlines various offences and penalties for non-compliance. For example, if the 'old agency' fails to transfer the funds as directed, it could be held liable for mismanagement of public funds. Similarly, the 'new agency' could face penalties if it does not properly account for the received funds. The maximum penalties for such offences can include fines and, in severe cases, imprisonment, depending on the nature and extent of the breach. Therefore, it is crucial that both agencies comply with the directive to avoid any legal repercussions.