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 6 July 2005 and numbered 2 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 previous years of $1,093,255, provided to the National Oceans Office, be transferred to the Department of the Environment and Heritage.
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, abolishing the National Oceans Office. An appropriation adjustment, pursuant to section 32 of the FMA Act, is required to ensure that unspent appropriation provided to the National Oceans Office for the performance of its functions, be transferred to the Department of the Environment and Heritage.
Notes on the instrument
The instrument provides that the moneys listed in column 4 of the schedule for the National Oceans Office item be transferred to the Department of the Environment and Heritage item listed in
column 1.
Overview
The Financial Management and Accountability Act 1997 was enacted to ensure effective financial management within government agencies. The Act was introduced to address the need for clear guidelines on the handling of appropriations when the functions of a government agency change, either due to the abolition of the agency or for other reasons. This legislative instrument, dated 6 July 2005, is a direction issued under section 32 of the FMA Act, which allows the Finance Minister to transfer appropriations from one agency to another when their functions change. The instrument specifically directs the transfer of non-lapsing appropriations from the abolished National Oceans Office to the Department of the Environment and Heritage, ensuring that unspent funds are appropriately allocated following the administrative changes. The purpose of this instrument is to facilitate a smooth transition of financial responsibilities between agencies, maintaining accountability and ensuring that funds are used for their intended purposes.
Scope and Application
The Financial Management and Accountability Act 1997 (FMA Act) applies to any situation where a function of an existing agency (referred to as the "old Agency") becomes the function of another agency (the "new Agency") due to the abolition of the old Agency or for any other reason. Specifically, Section 32 of the FMA Act enables the Finance Minister to issue directions for the transfer of appropriations from the old Agency to the new Agency, facilitating the continuation of funding for the transferred functions. This Act has a national jurisdictional reach as it pertains to Commonwealth agencies. The authority to issue such directions has been delegated to the Chief Executive of the Department of Finance and Administration, who has further delegated this power to specific managers within the Department. In practical terms, this legislation ensures that unspent funds appropriated for the functions of the old Agency are appropriately reallocated to the new Agency to maintain financial continuity and accountability.
Key Provisions
The main operative sections of the instrument are detailed under section 32 of the Financial Management and Accountability Act 1997 (FMA Act), which provides provisions for the adjustment of appropriations when a function of an agency changes. Specifically, subsection 32(2)(a) enables the Finance Minister to issue directions to transfer appropriations from the old agency to the new agency when a function is transferred. This instrument, dated 6 July 2005 and numbered 2 of 2005-2006, directs the transfer of $1,093,255 in non-lapsing appropriations from the abolished National Oceans Office to the Department of the Environment and Heritage.
The obligations imposed by this Act primarily concern the appropriate management and reallocation of financial resources when an agency's functions are altered or abolished. The Finance Minister, or a delegate such as the Chief Executive of the Department of Finance and Administration, must ensure that unspent appropriations are correctly transferred to the new agency to avoid any financial wastage or mismanagement. The instrument specifically mandates the transfer of non-lapsing appropriations from the National Oceans Office to the Department of the Environment and Heritage, ensuring continuity in the use of these funds for intended purposes.
There are no explicit offences, penalties, or consequences for breach outlined within the text of this particular instrument. However, any failure to comply with the provisions of section 32 of the FMA Act could potentially lead to financial mismanagement and accountability issues. The Act itself does not specify maximum penalties for breaches, but general legal consequences for non-compliance with financial management provisions could include administrative sanctions, financial penalties, or legal actions taken against those responsible for the oversight of the appropriations.
In summary, the instrument under section 32 of the FMA Act facilitates the transfer of appropriations when agency functions change, ensuring that financial resources are appropriately reallocated. The obligations require the Finance Minister or their delegate to manage this transfer accurately, and while the specific penalties for non-compliance are not detailed in this instrument, general legal consequences could apply for breaches of financial management provisions.