Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 42 of 2004-2005)

Overview

The Financial Management and Accountability Act 1997 was enacted to establish a framework for the financial management and accountability of Commonwealth agencies. This Act was introduced to address the need for clear and effective financial controls and accountability mechanisms within government agencies, ensuring that public funds are managed responsibly and transparently. The Act was passed by the Parliament of Australia and includes various provisions to facilitate proper financial management practices. In this context, section 32 of the Act is particularly relevant as it addresses the adjustments of appropriations when there is a change in agency functions. The policy objective behind this section is to ensure a seamless transition of financial resources when the responsibilities of one agency are transferred to another, thereby maintaining fiscal integrity and continuity of services.

Scope and Application

The Financial Management and Accountability Act 1997 applies to appropriations made to agencies within the Commonwealth of Australia, particularly when there is a change in agency functions. Specifically, Section 32 of the Act addresses the adjustment of appropriations when a function of one agency becomes the function of another agency, either due to the abolition of the original agency or for any other reason. The Act mandates that the Finance Minister can issue directions to transfer appropriated funds from the original agency to the new agency responsible for the function. In this instance, the instrument dated 16 June 2005 directs the transfer of specific appropriations from the Department of Family and Community Services to the Department of Human Services following the transfer of the Child Support Agency programme’s functions. The instrument also notes the delegation of powers 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. This transfer ensures that the appropriation for the Child Support Agency function remains appropriately allocated following the change in agency responsibility.

Key Provisions

The primary operative section of this instrument is section 32 of the Financial Management and Accountability Act 1997 (FMA Act). Specifically, subsection 32(2)(a) of the FMA Act enables the Finance Minister to transfer appropriations from one agency to another when a function of an agency becomes a function of another agency, either due to the abolition of the original agency or for any other reason. The instrument in question, dated 16 June 2005, directs the transfer of a specific amount from the Department of Family and Community Services to the Department of Human Services. Under this section, the obligations imposed on the relevant parties involve ensuring that the appropriations for a function that has shifted from one agency to another are appropriately reallocated. In this case, the instrument mandates that $15,218,486, initially provided to the Department of Family and Community Services, along with non-lapsing appropriations of $17,022,422, be transferred to the Department of Human Services. This adjustment is necessary to maintain proper financial management and accountability in line with the FMA Act. The instrument also includes provisions for the transfer of accumulated cash held by the Official Public Account for employee leave entitlements relating to Child Support Agency staff. This ensures that all financial resources associated with the transferred function are correctly accounted for and managed by the new agency. The Finance Minister, through delegation, has authorised these transfers to ensure the integrity and continuity of financial management practices. There are no specific offences or penalties mentioned in the instrument itself; however, failure to comply with the provisions of the FMA Act could result in civil or criminal consequences. The FMA Act provides for various penalties, including fines and imprisonment, for breaches of financial management and accountability provisions. The maximum penalties can vary depending on the nature and severity of the breach. It is important for the parties involved to adhere strictly to the requirements of the FMA Act to avoid any legal repercussions.