Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 22 of 2001-2002)

Overview

The Financial Management and Accountability Act 1997 was enacted to ensure that Commonwealth agencies manage their finances in a manner that is consistent with sound public sector practices and to provide a framework for financial management and accountability within the Australian government. The Act was introduced to address the need for clear guidelines and standards for financial management across all Commonwealth agencies, aiming to promote efficiency, effectiveness, and transparency in the use of public funds. The Act is administered by the Parliament of Australia, reflecting the legislative intent to uphold the highest standards of financial responsibility and accountability. The policy objective of the Act is to establish a robust system for the management of public money, ensuring that funds are used in a way that is accountable to the Australian public. The legislative instrument F2007B00949, dated 25 January 2002, is a direction issued under section 32 of the Financial Management and Accountability Act 1997. This instrument, authored by James Kerwin, the Branch Manager of the Commonwealth Financial Reporting Unit within the Department of Finance and Administration, directs the transfer of specific appropriations from one agency to another. This action is necessary to align financial resources with the current organisational structure and operational outcomes, as reflected in the shift of responsibilities from the Department of Industry, Tourism and Resources to the Department of Communications, Information Technology and the Arts. The transfer involves appropriations from the Appropriation Act (No. 1) 2001-2002, totalling $2,457,000, which are to be re-allocated to support departmental outputs and administered expenses under the new agency.

Scope and Application

The Direction issued under Section 32 of the Financial Management and Accountability Act 1997 applies to specific appropriation items and their respective funds, which are to be transferred from one Commonwealth agency to another. The Direction mandates the transfer of funds from the 'old agency', Department of Industry, Tourism & Resources, to the 'new agency', Department of Communications, Information Technology and the Arts, for two appropriation items listed in the attached schedule. The first transfer involves $607,000 for 'Departmental Outputs – Outcome 1' and the second transfer involves $1,850,000 for 'Administered Expenses – Outcome 1'. The authority for these transfers is granted by the Financial Management and Accountability Act 1997, which sets out the framework for financial management within the Commonwealth public sector. The geographic reach of this legislation is national, applying to all Commonwealth agencies across Australia. There are no stated exclusions or exemptions within the scope of this Direction. However, the application of the Financial Management and Accountability Act 1997 may be extended or restricted through subordinate instruments, which are not detailed in this particular Direction.

Key Provisions

The primary operative sections of the Direction under section 32 of the Financial Management and Accountability Act 1997 (section 32) mandate the transfer of specified funds from one government agency to another. Specifically, section 32 allows the Commonwealth Financial Reporting Unit to issue directives for the movement of funds as outlined in the attached schedule. This directive, issued by James Kerwin, the Branch Manager of the Commonwealth Financial Reporting Unit, Department of Finance and Administration, requires that certain appropriation items from the Department of Industry, Tourism and Resources be transferred to the Department of Communications, Information Technology and the Arts. These transfers are listed in the attached schedule, with details such as the appropriation item, the old agency, the new agency, and the amount to be transferred. The obligations imposed by this Direction include the responsibility of the Department of Industry, Tourism and Resources to ensure that the specified funds are accurately accounted for and transferred to the Department of Communications, Information Technology and the Arts. The Department of Communications, Information Technology and the Arts is required to accept the transferred funds and ensure they are utilised in accordance with the appropriation acts and any other relevant financial management regulations. This Direction ensures that the funds are appropriately allocated to support the activities and outcomes as designated by the government. Any breach of the provisions outlined in this Direction could result in significant consequences. Under the Financial Management and Accountability Act 1997, failure to comply with a direction issued under section 32 may be considered an offence. The penalties for such offences can include fines and, in severe cases, criminal prosecution. The specific penalties are not detailed within the Direction but are governed by the broader legislative framework, which can impose substantial financial penalties and legal ramifications for non-compliance. It is imperative for both agencies to adhere strictly to the terms of this Direction to avoid any legal or financial repercussions.