Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 29 of 2004-2005)

Overview

The Financial Management and Accountability Act 1997 was enacted to provide a framework for the management and accountability of public finances within the Australian government. The Act addresses the need for clear and efficient financial management practices, ensuring that public funds are used effectively and responsibly. The purpose of Section 32 of the Act, which allows for the adjustment of appropriations when agency functions are transferred, is to maintain fiscal integrity and ensure that funds allocated for specific purposes are not disrupted when responsibilities shift between government bodies. This section was introduced to avoid financial gaps or overlaps that could arise from such transfers, thereby maintaining the continuity and effectiveness of public services. The enactment of this provision was by the Parliament of Australia, reflecting the policy objective of safeguarding public funds and ensuring they are appropriately allocated to meet the needs of the government’s programs and services.

Scope and Application

The Financial Management and Accountability Act 1997, specifically section 32, addresses the transfer of appropriations when the functions of one government agency (the old Agency) are reassigned to another agency (the new Agency), whether due to the abolition of the old Agency or for other reasons. This legislation applies to instances where there is a change in agency functions, necessitating an adjustment in the appropriation allocated to the old Agency to ensure continuity of funding for the new functions under the new Agency. The Act provides the Finance Minister with the authority to issue directions for the transfer of funds from the old Agency to the new Agency. This authority has been delegated to the Chief Executive of the Department of Finance and Administration, who in turn delegated it to the Division Manager, Financial Reporting and Cash Management Division, Financial Management Group. This particular instrument concerns the transfer of specific appropriations from the Department of Family and Community Services to the Department of Human Services, reflecting a change in responsibility for the Child Support Agency Programme. The adjustments are made to ensure that the funding for the programme continues without interruption as it transitions to the new agency.

Key Provisions

The primary operative section in this context is section 32 of the Financial Management and Accountability Act 1997 (FMA Act), which allows for the adjustment of appropriations when a function of one agency (the old agency) becomes a function of another agency (the new agency). This can occur due to the abolition of the old agency or for any other reason (section 32(2)(a)). Under this section, the Finance Minister has the authority to issue directions to transfer amounts appropriated for a function from the old agency to the new agency. This authority has been delegated by the Finance Minister to the Chief Executive of the Department of Finance and Administration, and subsequently to the Division Manager, Financial Reporting and Cash Management Division, Financial Management Group, via an instrument dated 30 November 2004. In this specific case, the instrument dated 11 February 2005 directs the transfer of $135,000,000 in departmental appropriation and $5,809,996 in administered appropriation from the Department of Family and Community Services to the Department of Human Services. This transfer is mandated by the FMA Act to ensure that the appropriations provided to the Department of Family and Community Services for the Child Support Agency Programme are appropriately reallocated to the Department of Human Services following the issuance of an Administrative Arrangements Order by the Governor-General on 16 December 2004. The obligations imposed by the Act on the relevant parties include the requirement for the Finance Minister, or a delegate, to issue a direction for the transfer of appropriations when there is a change in agency functions. The instrument itself details the specific appropriations to be transferred and the departments involved in the transfer. Additionally, the Chief Executive of the Department of Finance and Administration and the Division Manager, Financial Reporting and Cash Management Division, Financial Management Group, must ensure that the transfer is executed as per the direction. Any failure to comply with the provisions of the FMA Act, or to follow the directions issued under section 32, may result in legal consequences. While the explanatory statement does not detail specific offences, penalties, or consequences for non-compliance, breaches of the Act generally could lead to civil or criminal sanctions depending on the nature and severity of the breach. The maximum penalties for contraventions of the Act can include substantial fines and, in more severe cases, imprisonment, as outlined in other sections of the FMA Act. The precise consequences would depend on the specific nature of the non-compliance and the court’s determination in any ensuing legal proceedings.