Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 8 of 2003-2004)

Overview

The Financial Management and Accountability Act 1997 was enacted to ensure robust financial management and accountability within the Commonwealth, addressing the need for transparency and efficiency in the allocation and utilisation of public funds. This Act empowers the enactment of various legislative instruments, such as the Direction issued under section 32, to facilitate the transfer of funds between agencies to ensure that financial resources are directed in line with parliamentary intent and policy objectives. The Direction, issued by Jim Kerwin on behalf of the Department of Finance and Administration, exemplifies the application of the Act by authorising specific transfers of appropriations from one agency to another. This legislative instrument aims to align resources with the evolving needs of government services and to maintain fiscal discipline and accountability in the execution of the budget. The policy objective is to ensure that public money is managed effectively and in accordance with legislative requirements, thereby upholding the principles of financial integrity and stewardship.

Scope and Application

The Financial Management and Accountability Act 1997 is a pivotal piece of Australian legislation designed to ensure effective financial management and accountability within the Commonwealth sector. This Act applies to all Commonwealth entities, including departments, agencies, and statutory authorities, governing their financial practices, reporting, and accountability measures. The legislation is geographically applicable across the Commonwealth jurisdiction, ensuring uniform financial management standards are adhered to throughout all federal entities. The scope of this Act encompasses various aspects of financial conduct, including appropriations, budgetary processes, and financial reporting requirements, aiming to enhance transparency and accountability in the management of public funds. Under the authority of section 32 of the Act, the Director can issue directives for the transfer of moneys between specified agencies. The directive in question specifically authorises the transfer of certain appropriations from the 'old agency' to the 'new agency', as detailed in the attached schedule. This particular direction, issued by Jim Kerwin, Division Manager of Financial Reporting and Cash Management Division in the Department of Finance and Administration, mandates the reallocation of funds from the Joint House Department to the Department of Parliamentary Services. The transfers include specific appropriations from the Appropriation (Parliamentary Departments) Act (No. 1) 2003-2004 and the Appropriation Act (No. 1) 2003-2004, totalling $4,000,000 and $3,000,000 respectively. This directive does not specify any exclusions or exemptions, applying strictly to the outlined appropriations and agencies as per the directive.

Key Provisions

The primary operative section of this legislative instrument is section 32 of the Financial Management and Accountability Act 1997. Pursuant to this section, the Division Manager of Financial Reporting and Cash Management Division, Department of Finance and Administration, directs the transfer of specific appropriations from one agency to another. The schedule attached to the instrument lists the appropriation items, the 'old agency', the 'new agency', and the amounts to be transferred. For instance, the appropriation from the "Appropriation (Parliamentary Departments) Act (No. 1) 2003-2004" for administered expenses for Outcome 1, previously allocated to the Joint House Department, is to be transferred to the Department of Parliamentary Services. Another example includes a non-lapsing appropriation from prior years, again for administered expenses, being moved from the Joint House Department to the Department of Parliamentary Services. The obligations and requirements imposed by this Act primarily concern the financial management and accountability of the agencies involved. The Direction under section 32 mandates that the specified appropriations be transferred accurately and promptly from the 'old agency' to the 'new agency'. This involves ensuring that the financial records reflect the changes as per the Direction. The Division Manager, Jim Kerwin, must also ensure that the transfers comply with the relevant financial management policies and procedures outlined in the Financial Management and Accountability Act 1997. Breaching the obligations set out in this legislative instrument can lead to significant civil or criminal consequences. If the required transfers are not made as directed, it could result in non-compliance with the Financial Management and Accountability Act 1997. The maximum penalties for non-compliance may include substantial fines or, in severe cases, imprisonment, depending on the severity and intent behind the breach. Additionally, failure to accurately reflect these transfers in financial records could result in further administrative penalties or legal action. Therefore, it is crucial that all parties adhere strictly to the provisions of this Direction to avoid such repercussions.