Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 36 of 2004-2005)

Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted to provide a framework for the management of public money, ensuring accountability and transparency in the use of public funds. Section 32 of the Act specifically addresses the adjustment of appropriations when there is a change in agency functions, such as the transfer of functions from one agency to another. This section was introduced to address the need for seamless financial transitions when government responsibilities are realigned, ensuring that funds are appropriately reallocated to reflect the new functional responsibilities. The FMA Act is a Commonwealth Act, enacted by the Australian Parliament, with the policy objective of maintaining proper financial oversight and management across government agencies. The instrument in question, dated 22 April 2005, directs the transfer of appropriations from the Department of Family and Community Services to the Department of Employment and Workplace Relations and the Department of Education, Science and Training, following a restructuring of responsibilities as per an Administrative Arrangements Order issued on 26 October 2004.

Scope and Application

The Financial Management and Accountability Act 1997, specifically Section 32, addresses the adjustments of appropriations when there is a change in agency functions. This section applies to appropriations that were originally allocated to an agency (referred to as the old Agency) and need to be transferred to another agency (the new Agency) due to the abolition of the old Agency or any other reason resulting in a transfer of functions. The Act empowers the Finance Minister to issue directions for the transfer of some or all of the appropriated amount 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 has delegated this power to the Division Manager, Financial Reporting and Cash Management Division. The purpose of the instrument, as outlined in the explanatory statement, is to facilitate the transfer of specific departmental outputs appropriations from the Department of Family and Community Services to the Department of Employment and Workplace Relations and the Department of Education, Science and Training, following an Administrative Arrangements Order that shifted certain responsibilities to these new agencies. The instrument ensures compliance with the Centrelink Funding Model, as agreed upon by the relevant parties.

Key Provisions

The main operative sections of the Financial Management and Accountability Act 1997 (FMA Act) pertinent to the instrument are section 32, which deals with adjustments of appropriations when there is a change in agency functions (section 32(2)(a)). This section allows the Finance Minister to issue directions for the transfer of appropriated funds from one agency to another when the functions of the original agency are reassigned. In this case, the instrument, dated 22 April 2005 and numbered 36 of 2004-2005, directs the transfer of departmental outputs appropriation from the Department of Family and Community Services to the Department of Employment and Workplace Relations and the Department of Education, Science and Training. The Act imposes several obligations and requirements on the parties involved. Firstly, the Finance Minister, who has the authority under section 32, must issue directions for the transfer of funds as necessary when there is a change in agency functions. In this scenario, the Chief Executive of the Department of Finance and Administration has delegated this power to the Division Manager of the Financial Reporting and Cash Management Division. These officials must ensure that the transfer of funds is carried out as per the agreement and the requirements of the FMA Act. The instrument specifies the exact amounts to be transferred, ensuring clarity and accountability in the financial process. The instrument includes provisions for specific transfers of funds, with $200,086,120 to be reallocated from the Department of Family and Community Services. Of this amount, $181,072,221 is to go to the Department of Employment and Workplace Relations, and $19,013,899 is to go to the Department of Education, Science and Training. This reallocation aligns with the Centrelink Funding Model agreed upon by both parties on 19 April 2005. The instrument further details that the funds listed in column 4 of the schedule for the Department of Family and Community Services are to be transferred to the respective departments listed in column 1. Any breach of the obligations and requirements set out in the instrument could lead to civil or criminal consequences. Under the FMA Act, failure to comply with the directions regarding the transfer of appropriations can result in legal action being taken against the responsible parties. The exact penalties for non-compliance are not specified in the explanatory statement, but the Act generally provides for enforcement actions, including fines and other penalties that could be imposed by a court. The severity of these penalties can depend on the nature and extent of the breach, with potential maximum penalties as outlined in the relevant sections of the FMA Act.