Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 25 of 2004-2005)

Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted to ensure proper financial management and accountability in the Australian government's agencies. This legislation was introduced to address the need for a comprehensive legal framework governing financial management, accountability, and appropriation adjustments within government agencies. The FMA Act is administered by the Parliament of Australia and its policy objective is to facilitate the efficient and transparent management of public funds by establishing clear guidelines and procedures. The explanatory statement provided pertains to a direction issued under Section 32 of the FMA Act, which concerns adjustments to appropriations when there is a change in agency functions. In this particular instance, the instrument directs the transfer of an administered appropriation from the Department of Immigration and Multicultural and Indigenous Affairs to the Department of Communications, Information Technology and the Arts, following the transfer of certain functions as outlined in the 2003 Administrative Arrangements Order.

Scope and Application

The Financial Management and Accountability Act 1997, specifically section 32, applies to situations where functions of one agency (referred to as the old Agency) are transferred to another agency (the new Agency). This transfer can occur due to the abolition of the old Agency or any other reason. Under this Act, the Finance Minister has the authority to issue directions to facilitate the transfer of appropriations intended for the performance of specific functions from the old Agency to the new Agency. The instrument, dated 6 January 2004 and numbered 25 of 2004-2005, details the direction for the transfer of $19,772,479 from the Department of Immigration and Multicultural and Indigenous Affairs to the Department of Communications, Information Technology and the Arts. This adjustment follows the Administrative Arrangements Order of 18 December 2003, which transferred certain Indigenous affairs functions to the latter department. The instrument ensures that the appropriated funds are correctly aligned with the new functions and departments, thereby maintaining financial accountability and management as prescribed by the FMA Act.

Key Provisions

The Financial Management and Accountability Act 1997 (FMA Act) includes provisions for the adjustment of appropriations when the functions of an agency change. Specifically, section 32 of the FMA Act applies when a function of an agency (referred to as the old agency) is transferred to another agency (referred to as the new agency) due to the abolition of the old agency or for any other reason. This section allows the Finance Minister to issue directions to transfer appropriations from the old agency to the new agency, ensuring that funding aligns with the functions being performed. In this context, subsection 32(2)(a) of the FMA Act empowers the Finance Minister to direct the transfer of appropriated funds from the old agency to the new agency. The instrument in question, dated 6 January 2004, authorises the SES Band 2 position holder in the Financial Reporting and Cash Management Division of the Department of Finance and Administration to exercise this power. The instrument specifically directs the transfer of an administered appropriation of $19,772,479 from the Department of Immigration and Multicultural and Indigenous Affairs to the Department of Communications, Information Technology and the Arts. This transfer is necessitated by an Administrative Arrangements Order issued by the Governor-General on 18 December 2003, which reassigned certain Indigenous affairs functions from the Department of Immigration and Multicultural and Indigenous Affairs to the Department of Communications, Information Technology and the Arts. The purpose of the instrument is to ensure that the appropriated funds are correctly aligned with the functions being performed by the new agency, as mandated by section 32 of the FMA Act. The obligations imposed by the Act require that any changes in agency functions be accompanied by appropriate adjustments to appropriations to maintain financial accountability and integrity. The instrument clearly outlines the specific funds to be transferred, ensuring compliance with the legislative requirements. Failure to adhere to these provisions could result in misallocation of funds and potential financial mismanagement. The consequences of non-compliance could include civil or criminal penalties, depending on the severity of the breach and the context in which it occurs.