Explanatory Statement
Financial Management and Accountability Act 1997, Section 32 - Adjustment of appropriations on change of Agency functions
The instrument to which this explanatory statement relates
This explanatory statement relates to an instrument (the instrument) entitled “Direction under Section 32, Financial Management and Accountability Act 1997”, dated 23 August 2007 and numbered 5 of 2007-2008.
The legislative authority under which the instrument is made
Section 32 of the Financial Management and Accountability Act 1997 (‘the FMA Act’) applies if a function of an Agency (the old Agency) becomes a function of another Agency (the new Agency), either because the old Agency is abolished or for any other reason.
Subsection 32(2)(a) of the FMA Act enables the Finance Minister to, amongst other things, issue one or more directions to transfer from the old Agency to the new Agency some or all of an amount that has been appropriated for the performance of that function by the old Agency.
By way of an instrument effective from 1 July 2007 made under section 62 of the FMA Act, the Finance Minister has delegated his power under section 32 to the Chief Executive of the Department of Finance and Administration. By way of an instrument effective from 1 July 2007 made under section 53 of the FMA Act, the Chief Executive of the Department of Finance and Administration has, in turn, delegated the power to the General Manager, Financial Management Group, and the Division Manager, Financial Reporting and Cash Management Division. The direction is issued by the Acting Division Manager, Financial Reporting and Cash Management Division.
Purpose of the instrument
The instrument directs that part of the departmental item, being an amount of $1,500,000 provided to the Attorney-General’s Department (AGD) in Appropriation Act (No. 1) 2007-2008 be transferred to the Australian Commission for Law Enforcement Integrity (ACLEI).
Background
The Law Enforcement Integrity Commissioner Act 2006 established the office of the Integrity Commissioner, supported by a statutory agency, ACLEI. The Integrity Commissioner's role is to detect, investigate and prevent corruption in the Australian Crime Commission, the Australian Federal Police and other prescribed Australian Government agencies with law enforcement functions. The Integrity Commissioner also has a role to maintain and improve the integrity of staff members of law enforcement agencies, and to process intelligence on corruption in Commonwealth law enforcement. ACLEI has also been established as a prescribed agency under the FMA Act (Item 107AA, Schedule 1, Part 1, Financial Management and Accountability Regulations 1997).
ACLEI took internal responsibility for its financial management on 1 July 2007.
Notes on the instrument
The instrument provides that the amounts set out in column 4 of the table for the appropriation item in column 1 for AGD be transferred to ACLEI.
In accordance with the Legislative Instruments Act 2003, AGD and ACLEI were consulted in the preparation of this instrument.
Overview
The Financial Management and Accountability Act 1997 was enacted to address the need for effective financial management and accountability across Australian Government agencies. This Act was introduced by the Parliament of Australia to ensure that public funds are managed responsibly and transparently, and to provide a framework for the accountability of agencies in their use of public resources. One of the key provisions of the Act, Section 32, pertains to the adjustment of appropriations when the functions of an agency change, either due to the abolition of the agency or for other reasons. This section empowers the Finance Minister to issue directions for the transfer of appropriated funds from the old agency to the new agency responsible for the same functions. The purpose of the instrument in question is to direct a transfer of $1.5 million from the Attorney-General's Department to the Australian Commission for Law Enforcement Integrity, reflecting the shift of certain integrity-related functions to ACLEI as per the Law Enforcement Integrity Commissioner Act 2006. This delegation of authority ensures that financial adjustments are made efficiently and in accordance with the legislative framework established by the FMA Act.
Scope and Application
The Financial Management and Accountability Act 1997 (FMA Act) pertains to adjustments in appropriations when there is a change in the functions of an agency, either due to the agency’s abolition or for any other reason. Specifically, Section 32 of the FMA Act empowers the Finance Minister to issue directions that transfer appropriations from an old agency to a new agency that assumes the functions. This power has been delegated under section 62 of the FMA Act to the Chief Executive of the Department of Finance and Administration and further delegated to the General Manager, Financial Management Group, and the Division Manager, Financial Reporting and Cash Management Division. The instrument directs the transfer of $1,500,000 from the Attorney-General’s Department (AGD) to the Australian Commission for Law Enforcement Integrity (ACLEI), reflecting the transfer of functions related to the integrity of law enforcement agencies. The legislation applies to agencies and their functions within the Commonwealth jurisdiction, with the specified exclusions and thresholds based on the legislative delegations and the appropriation item details.
Key Provisions
Section 32 of the Financial Management and Accountability Act 1997 (FMA Act) pertains to the adjustment of appropriations when there is a change in the functions of an agency. Specifically, if a function of one agency (the old agency) becomes the function of another agency (the new agency), either due to the old agency being abolished or for any other reason, the Act requires that the Finance Minister issue directions to transfer some or all of the appropriated amount from the old agency to the new agency. Under section 32(2)(a) of the FMA Act, the Finance Minister has the authority to issue such directions. In this context, the instrument dated 23 August 2007, numbered 5 of 2007-2008, directs the transfer of $1,500,000 from the Attorney-General’s Department (AGD) to the Australian Commission for Law Enforcement Integrity (ACLEI).
The obligations imposed by this Act on the relevant parties include ensuring that the transfer of appropriations is conducted in accordance with the directions issued by the appropriate authority. The Finance Minister, having delegated this power to the Chief Executive of the Department of Finance and Administration, and subsequently to the General Manager, Financial Management Group, and the Division Manager, Financial Reporting and Cash Management Division, must ensure that the financial management process adheres to the legislative requirements. Additionally, the Attorney-General’s Department and the Australian Commission for Law Enforcement Integrity must cooperate in the preparation and execution of the instrument, as mandated by the Legislative Instruments Act 2003. This cooperation involves consultation to ensure that the transfer of funds is carried out smoothly and in accordance with the legislative intent.
Failure to comply with the directions issued under section 32 of the FMA Act could result in civil or criminal consequences, although the specific penalties are not detailed in the provided text. However, given the nature of the Act, breaches may lead to enforcement actions by the relevant authorities, potentially including fines or other penalties as prescribed by law. It is important for the parties involved to adhere strictly to the directions to avoid any legal repercussions, ensuring the integrity and proper management of public funds.