Direction under section 32, Financial Management and Accountability Act 1997 – Adjustments of Appropriations on Change of Agency Functions (No. 13 of 2004-2005)

Overview

The Financial Management and Accountability Act 1997 was enacted to provide a framework for the financial management and accountability of Commonwealth entities. This legislation was introduced to address the need for a comprehensive, consistent approach to managing financial resources across the Australian government. The Act aims to ensure that public funds are managed efficiently, effectively, and economically, and that public accountability is maintained. The Parliament of Australia enacted this Act to uphold the principles of responsible financial management and to provide clear guidelines for the allocation, use, and reporting of public funds. The policy objective is to foster transparency, efficiency, and effectiveness in the financial operations of government entities, thereby enhancing public trust and confidence in the government's fiscal stewardship.

Scope and Application

The Legislative Instrument F2006B11665 pertains to the Financial Management and Accountability Act 1997, and it concerns the transfer of funds between government agencies. Specifically, this direction applies to the appropriation items listed in the attached schedule, which involve the transfer of moneys from the Australian Greenhouse Office to the Department of the Environment and Heritage. This transfer is mandated by the Act and applies to the appropriation items listed for the financial years 2004-2005 as specified in the Appropriation Acts (No. 1 and No. 2). The directive is geographically and jurisdictionally within the Commonwealth of Australia, as it involves the reallocation of funds between federal government entities. The document does not explicitly state any exclusions, exemptions, or thresholds for the application of this direction, and it is executed by the Division Manager of Financial Reporting and Cash Management Division, Department of Finance and Administration. Any further extension or restriction of this application is potentially managed through subordinate instruments, although these are not detailed in the provided excerpt.

Key Provisions

The key operative sections of the legislation are contained within section 32 of the Financial Management and Accountability Act 1997 (FMA Act), which provides the authority for this direction. This section allows the Division Manager of Financial Reporting and Cash Management Division in the Department of Finance and Administration to issue a direction for the transfer of moneys from one agency to another. This direction is evidenced by the attachment, which lists the appropriation items, the old agency, the new agency, and the specific amounts to be transferred (section 32(1)). The obligations imposed by this Act on the parties involved include the requirement for the Division Manager to provide a detailed schedule of appropriation items, the old agency, the new agency, and the specific amounts to be transferred. The new agency must then accept these funds and utilise them for the purposes specified in the appropriation acts. The old agency, on the other hand, must ensure that these funds are no longer in their control and that any accounting records are updated to reflect the transfer (section 32(2)). Failure to comply with the provisions of this Act can lead to significant consequences. While the legislation does not explicitly detail offences, penalties, or civil/criminal consequences for breach, any non-compliance with the direction could potentially be considered an administrative breach, leading to internal departmental sanctions or even legal action. Given that the act is a legislative instrument under the FMA Act, severe breaches could also attract scrutiny from the Australian National Audit Office or the Commonwealth Ombudsman, leading to further investigations and potential penalties for the involved agencies (section 32(3)).