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

Overview

The Financial Management and Accountability Act 1997 was enacted to address issues surrounding financial management, accountability, and reporting within Commonwealth agencies. This Act was designed to enhance the effectiveness of financial management practices across the Australian government, ensuring transparency, efficiency, and adherence to legislative requirements. The Act was passed by the Parliament of Australia and outlines various provisions for financial reporting, accountability, and the management of public money. The policy objective of this Act is to provide a framework that ensures public funds are managed responsibly and that there is adequate accountability for the use of these funds. This legislative instrument, issued under section 32 of the Act, exemplifies the Act's intent by directing the transfer of specific appropriation items between agencies, thus maintaining fiscal discipline and ensuring resources are appropriately allocated and accounted for.

Scope and Application

This legislative instrument, F2007B00964, represents a direction issued under section 32 of the Financial Management and Accountability Act 1997, which pertains to the transfer of specific funds from one government agency to another. This direction applies to the appropriation items listed in the attached schedule, specifically directing the transfer of moneys from the 'old agency' to the 'new agency' as per the details provided in the respective columns of the schedule. The Financial Management and Accountability Act 1997 governs the financial management practices of Commonwealth entities, ensuring accountability and transparency in the use of public funds. This directive does not specify a broad geographic or jurisdictional reach beyond the specified agencies and appropriation items, but rather targets particular financial transactions within the Commonwealth framework. No exclusions, exemptions, or thresholds are explicitly mentioned in this directive, and it operates within the parameters set by the parent Act. The application of this direction is limited to the specific appropriation items and agencies outlined, and any further application or interpretation is subject to the overarching provisions of the Financial Management and Accountability Act 1997.

Key Provisions

The main operative sections of this Direction under section 32 of the Financial Management and Accountability Act 1997 (FMA Act) involve the transfer of specified moneys from one agency to another. As per section 32 of the FMA Act, the Direction mandates that certain appropriations be moved from the 'old agency' to the 'new agency' as listed in the schedule (section 32(1)). In this instance, the Direction is transferring funds from the Department of Defence and a specific appropriation under the Appropriation Act (No. 1) 2001-2002 from the Attorney-General's Department to the Department of Defence. This Direction imposes several obligations and requirements on the parties involved. Firstly, the 'old agency', in this case, the Attorney-General's Department, must ensure that the specified funds are accurately calculated and made available for transfer. The 'new agency', the Department of Defence, must be prepared to receive these funds and account for them appropriately in its financial records. Both agencies must adhere to the guidelines set out in the Direction and ensure that the transfer is completed in a timely manner. Compliance with this Direction is crucial for maintaining the integrity of the financial management processes as outlined in the FMA Act. In terms of potential breaches and consequences, the FMA Act outlines various offences and penalties for non-compliance. If an agency fails to comply with a Direction issued under section 32, it could face significant repercussions. Civil penalties may include fines, and in severe cases, criminal charges could be pursued. While the specific penalties are not detailed in this Direction, the FMA Act provides for substantial fines for breaches of financial management obligations. For example, section 14 of the FMA Act states that a person who contravenes certain provisions can be subject to fines of up to $21,000 for individuals and $105,000 for bodies corporate, depending on the severity of the breach. Therefore, it is imperative that both the 'old' and 'new' agencies comply fully with the Direction to avoid these potential penalties.