Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 43 of 2004-2005)

Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted by the Australian Parliament to provide a framework for the financial management and accountability of Commonwealth entities. This Act was introduced to address the need for clear and efficient mechanisms for managing appropriations and ensuring that funds are allocated and utilised in accordance with legislative intent. Section 32 of the FMA Act specifically deals with the adjustments of appropriations when there is a change in agency functions, either due to the abolition of an agency or for other reasons. The policy objective behind this provision is to ensure that the financial resources intended for particular functions are seamlessly transferred to the new responsible entity, thereby maintaining continuity in service delivery and financial accountability. In the context of the instrument dated 21 June 2005, the Finance Minister, through delegation to the Chief Executive of the Department of Finance and Administration, has exercised this authority to transfer a departmental outputs appropriation from the Department of Health and Ageing to the Department of Human Services following a change in administrative responsibilities as outlined in the Administrative Arrangements Order of 26 October 2004.

Scope and Application

The instrument under Section 32 of the Financial Management and Accountability Act 1997 pertains to the transfer of appropriations between government agencies when there is a change in the functions of those agencies. Specifically, this instrument concerns the transfer of a departmental outputs appropriation from the Department of Health and Ageing to the Department of Human Services. This legislative directive is triggered when a function of one agency becomes the responsibility of another, either due to the abolition of the original agency or for other reasons. The instrument authorises the Chief Executive of the Department of Finance and Administration to transfer specific amounts that were appropriated for the performance of a function by the old agency to the new agency. In this instance, the instrument directs the transfer of $616,000 in appropriations from the Department of Health and Ageing to the Department of Human Services, reflecting a change in the responsibilities of these entities as a result of an Administrative Arrangements Order issued by the Governor-General. This adjustment is necessary to ensure that the financial resources align with the revised functional responsibilities.

Key Provisions

The main operative sections of the instrument, as per the Financial Management and Accountability Act 1997 (FMA Act), pertain specifically to section 32, which governs the adjustments of appropriations when there is a change in agency functions. Section 32(2)(a) of the FMA Act allows the Finance Minister to issue directions for the transfer of appropriated funds from one agency to another when a function of an old agency becomes the responsibility of a new agency. In this particular instance, the instrument dated 21 June 2005, numbered 43 of 2004-2005, directs the transfer of a specific departmental outputs appropriation of $616,000 from the Department of Health and Ageing to the Department of Human Services. The obligations and requirements imposed by this Act on the relevant parties are clear and defined. The Finance Minister, or a delegate, must ensure that any transfer of funds resulting from a change in agency functions is properly authorised and documented. This involves the issuance of a formal direction under section 32 of the FMA Act. In this case, the Chief Executive of the Department of Finance and Administration has delegated this power to the Division Manager, Financial Reporting and Cash Management Division, Financial Management Group, who then issued the specific direction to transfer the appropriation in question. The departments involved must also comply with the terms of the direction, ensuring that the appropriated funds are correctly transferred and accounted for. The instrument itself details the specific appropriation to be transferred and the departments between which the transfer occurs. It stipulates that the $616,000 departmental outputs appropriation provided to the Department of Health and Ageing in the Appropriation Act (No. 1) 2004-05 is to be moved to the Department of Human Services. This transfer is necessitated by the Administrative Arrangements Order issued by the Governor-General on 26 October 2004, which assigned the Health Insurance Commission's service delivery functions to the Department of Human Services. In terms of offences, penalties, or consequences for breaches, the Act does not explicitly detail these within the explanatory statement. However, any failure to comply with the directions issued under section 32 of the FMA Act could potentially result in legal and financial repercussions. The seriousness of such non-compliance would depend on the specific circumstances, but it could involve rectification of financial records, potential audits, and possibly further legislative or administrative actions. The precise nature and extent of penalties would be determined by the relevant authorities based on the specifics of the breach.