Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 15 of 2005-2006)

Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted to ensure sound financial management and accountability within Commonwealth agencies. This Act, established by the Commonwealth Parliament, addresses the need for clear procedures when there is a change in agency functions, which can lead to shifts in appropriations between agencies. One such provision is section 32, which allows for the adjustment of appropriations when a function is transferred from one agency to another. On 28 February 2006, a Direction under Section 32 was issued to facilitate the transfer of an appropriation amount of $49,357,676 from the Department of Immigration and Multicultural Affairs to the Department of Family and Community Services and Indigenous Affairs, following a change in agency responsibilities as per the Administrative Arrangements Order issued on 27 January 2006. This adjustment ensures that the financial resources align with the new functional responsibilities as agreed upon by the relevant Chief Financial Officers.

Scope and Application

The Financial Management and Accountability Act 1997 (FMA Act) applies to adjustments of appropriations when a function of an agency, referred to as the 'old agency', becomes the function of another agency, known as the 'new agency', due to the abolition of the old agency or for any other reason. Under section 32 of the FMA Act, the Finance Minister can issue directions to transfer amounts appropriated for the function from the old agency to the new agency. This delegation is further passed to the General Manager, Financial Management Group, and the Division Manager, Financial Reporting and Cash Management Division, as outlined in the instrument. The instrument directs the transfer of specific appropriations to align with the change in agency functions. In this case, it mandates the transfer of an administered expenses appropriation of $49,357,676 from the Department of Immigration and Multicultural Affairs to the Department of Family and Community Services and Indigenous Affairs. This adjustment is necessary following the Governor-General's Administrative Arrangements Order on 27 January 2006, which transferred the indigenous affairs function from the Department of Immigration and Multicultural Affairs to the Department of Family and Community Services and Indigenous Affairs. The exact amount to be transferred was agreed upon by the Chief Financial Officers of both departments in accordance with established procedures.

Key Provisions

The main operative sections of the instrument (F2006L00659), made under Section 32 of the Financial Management and Accountability Act 1997, direct the transfer of specific appropriations from one government agency to another. Specifically, Section 32(2)(a) of the FMA Act allows for the adjustment of appropriations when there is a change in agency functions. This instrument enacts that particular provision by directing the transfer of administered expenses appropriations from the Department of Immigration and Multicultural Affairs to the Department of Family and Community Services and Indigenous Affairs, reflecting the administrative changes outlined in the Administrative Arrangements Order dated 27 January 2006. The obligations and requirements imposed by this Act on the parties involved are centred around ensuring the smooth transition of financial responsibilities that accompany a change in agency functions. The Chief Executive of the Department of Finance and Administration, as the delegated authority, must ensure that the appropriations are correctly identified, calculated, and transferred in accordance with the established processes. The departments involved must also collaborate to confirm the exact amount to be transferred, ensuring it aligns with the functions that are being reallocated. This collaboration includes the Chief Financial Officers of both the Department of Immigration and Multicultural Affairs and the Department of Family and Community Services and Indigenous Affairs, who must agree on the specifics of the appropriation transfer. The instrument itself does not explicitly outline specific offences, penalties, or consequences for breach. However, any failure to comply with the provisions of the Financial Management and Accountability Act 1997 could potentially lead to legal ramifications, including potential civil or criminal penalties. These could range from fines to more severe sanctions, depending on the nature and severity of the breach, as outlined under the general provisions of the Act. The precise penalties would be determined in the context of any subsequent legal action, taking into account the specific circumstances of the non-compliance.