Direction under section 32, Financial Management and Accountability Act 1997 – Adjustments of Appropriations on Change of Agency Functions (No. 14 of 2005-2006)

Overview

The Financial Management and Accountability Act 1997 was enacted to establish a framework for the financial management and accountability of Commonwealth agencies, ensuring efficient and effective use of public resources. Section 32 of the Act specifically addresses the adjustments of appropriations when there is a change in agency functions, either due to the abolition of an agency or for other reasons. This provision ensures that appropriations are appropriately reallocated to maintain continuity of services and financial accountability. The instrument in question, dated 27 February 2006, pertains to a direction issued under Section 32 of the Act, facilitating the transfer of non-lapsing appropriations from the Department of Communications, Information Technology and the Arts to the Attorney-General’s Department following a change in function responsibility as outlined in an Administrative Arrangements Order. This transfer was necessitated by the reassignment of the Commonwealth copyright coordination function from the former department to the latter, reflecting the policy objective of ensuring that appropriations are aligned with the current functions and responsibilities of agencies.

Scope and Application

The instrument under the Financial Management and Accountability Act 1997, dated 27 February 2006, pertains to the adjustment of appropriations following a change in agency functions, specifically directing the transfer of a non-lapsing appropriation from the Department of Communications, Information Technology and the Arts to the Attorney-General’s Department. This adjustment is necessitated by the transfer of the Commonwealth copyright coordination function, as outlined in an Administrative Arrangements Order issued on 16 December 2004. The instrument authorises the transfer of $35,474.74 from departmental outputs Outcome 3 to departmental outputs Outcome 1, ensuring compliance with the Financial Management and Accountability Act. The authority for this transfer stems from Section 32 of the FMA Act, which allows for the Finance Minister to issue directions for the transfer of appropriations when a function shifts from one agency to another, a power that has been delegated to the General Manager, Financial Management Group, and the Division Manager, Financial Reporting and Cash Management Division within the Department of Finance and Administration.

Key Provisions

The Financial Management and Accountability Act 1997 (FMA Act) includes provisions for the adjustment of appropriations when there is a change in agency functions. Specifically, Section 32(2)(a) of the FMA Act allows the Finance Minister to issue directions for the transfer of funds from an agency that is abolished or has had its functions transferred to another agency. This provision is designed to ensure that appropriations are correctly allocated to reflect the change in responsibility for specific functions. In the case of the instrument under consideration, the Finance Minister has delegated this authority to the Chief Executive of the Department of Finance and Administration, who in turn has delegated it to the General Manager, Financial Management Group, and the Division Manager, Financial Reporting and Cash Management Division. The instrument dated 27 February 2006 directs that non-lapsing appropriations totaling $35,474.74, previously allocated to the Department of Communications, Information Technology and the Arts, be transferred to the Attorney-General’s Department. The obligations and requirements imposed by the FMA Act on the entities involved are stringent and procedural. When there is a change in agency functions, the Finance Minister, through the designated officials, must ensure that the transfer of appropriations is carried out accurately and in accordance with the established processes. This involves the Chief Financial Officers of the affected departments agreeing on the amount to be transferred, as was done in this case. The instrument specifies that the agreed amount of $35,474.74 be moved from the Department of Communications, Information Technology and the Arts to the Attorney-General’s Department. This procedural adherence ensures that the financial resources are correctly allocated to reflect the new functional responsibilities. The Act also outlines potential consequences for non-compliance with the requirements set forth in Section 32. While the explanatory statement does not specify maximum penalties, it is clear that failure to comply with the directions issued by the Finance Minister or the designated officials could result in civil or criminal consequences. These could include financial penalties, legal action, or other sanctions as prescribed by law. The emphasis on precise and procedural adherence underscores the importance of maintaining financial integrity and accountability within the government’s financial management framework.