Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 25 of 2005-2006)

Overview

The Financial Management and Accountability Act 1997 was enacted to ensure the proper management of financial resources within Australian Government Agencies. This Act was introduced to address the need for clear and effective financial management practices, particularly in the event of a change in the functions of an Agency. The legislation was enacted by the Australian Parliament and its policy objective is to maintain fiscal integrity and accountability within the government. The Act provides mechanisms for the adjustment of appropriations when there is a change in the functions of an Agency, ensuring that funds are appropriately allocated to the new responsible entity. Specifically, Section 32 of the Act facilitates the transfer of appropriations from an Agency that is abolished or whose functions are reassigned to another Agency, ensuring that financial resources are not left unallocated or mismanaged.

Scope and Application

The Financial Management and Accountability Act 1997 (FMA Act) applies to any Agency under the Commonwealth of Australia whose functions may change, either through abolition or for other reasons. Specifically, Section 32 of the FMA Act pertains to the transfer of appropriations when the functions of an existing Agency are reallocated to another Agency. This section empowers the Finance Minister to issue directions for the transfer of funds from the former Agency to the latter, ensuring financial accountability and continuity in service delivery. The instrument, dated 30 June 2006, directs the transfer of specific appropriations from the Department of Immigration and Multicultural Affairs to the Department of Families, Community Services and Indigenous Affairs following the reallocation of Indigenous Affairs functions on 27 January 2006. The instrument facilitates the transfer of non-lapsing prior years appropriations and departmental outputs as specified in the Appropriation Act (No.1) 2005-2006, ensuring that the new Department receives the necessary funding to continue these functions without disruption. The instrument is issued under delegated authority from the Finance Minister, demonstrating the structured delegation of power within the Commonwealth’s financial management framework.

Key Provisions

The main operative sections of the instrument, as referenced in section 32 of the Financial Management and Accountability Act 1997 (FMA Act), enable the transfer of appropriations between agencies when there is a change in their functions. Specifically, subsection 32(2)(a) of the FMA Act allows the Finance Minister to issue directions for the transfer of appropriated amounts from the old agency to the new agency. In this case, the instrument directs the transfer of non-lapsing prior years appropriation of $23,520,709.00 and departmental outputs in Appropriation Act (No.1) 2005-2006 of $3,166,998.00 from the Department of Immigration and Multicultural Affairs to the Department of Families, Community Services and Indigenous Affairs. The obligations and requirements imposed by the Act on the relevant parties are primarily procedural. The Finance Minister, or their delegate, must ensure that the transfer of appropriations is accurately calculated and appropriately reflected in the financial records of both the old and new agencies. The instrument must detail the specific appropriation items being transferred and the amounts involved. The transfer must also align with the original purpose of the appropriations, and any changes must be documented and justified. Under the FMA Act, there are potential civil and criminal consequences for non-compliance with the Act's provisions. The Act may provide for offences and penalties if appropriations are mismanaged or if the transfer of funds is not properly authorised or executed. While the specific penalties are not detailed in the explanatory statement, breaches of the Act can lead to financial penalties, legal action, and potential criminal charges if fraud or wilful neglect is involved. The exact penalties would depend on the nature and severity of the breach, but they could include fines or imprisonment for criminal offences.