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 29 February 2008 and numbered 8 of 2007-2008.
The legislative authority under which the instrument is made
Note: the Financial Management and Accountability Act 1997 (‘the FMA Act’) was amended by the Financial Framework Legislation Amendment Act (No. 1) 2007 (FFLA) Act. Amendments to section 32 of the FMA Act took effect on 25 September 2007. As this transfer of functions took place prior to 25 September 2007, under item 17 of the FFLA Act, this transfer is made under section 32 as it applied at that time.
Section 32 of 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 Deregulation. 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 Deregulation 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 Division Manager, Financial Reporting and Cash Management Division.
Purpose of the instrument
The instrument directs that part of the departmental items, being an amount of $522,000.00 under Appropriation Act (No. 1) 2007-2008, $1,007,663.54 under Appropriation Act (No. 1) 2006-2007, $2,107,407.93 under Appropriation Act (No. 1) 2005-2006 and part of the other departmental item, being an amount of $264,125.35 in equity injections under Appropriation Act (No. 2) 2005-2006 provided to the Attorney-General’s Department (AGD) 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.
Transfers were previously made in an instrument entitled “Direction under Section 32, Financial Management and Accountability Act 1997”, dated 23 August 2007 and numbered 5 of 2007-2008.
Notes on the instrument
The instrument provides that the amounts set out in column 4 of the table for the appropriation items 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 (FMA Act) was enacted by the Parliament of Australia to ensure effective financial management and accountability within Commonwealth agencies. The 2008 instrument, "Direction under Section 32, Financial Management and Accountability Act 1997", addresses the problem of ensuring seamless financial transitions when agency functions change. The instrument enables the transfer of appropriations from one agency to another, in this case, from the Attorney-General’s Department to the Australian Commission for Law Enforcement Integrity, to maintain continuity in funding for specified activities. The policy objective is to facilitate efficient financial administration and prevent disruptions in service delivery when responsibilities are transferred between agencies. The instrument is issued under the authority of the Finance Minister, who has delegated this power to the relevant officials within the Department of Finance and Deregulation.
Scope and Application
The Financial Management and Accountability Act 1997, as amended, applies to the transfer of appropriations when the functions of an agency are altered or abolished. Specifically, section 32 of the Act allows for the adjustment of appropriations when an agency’s functions are transferred to another agency, either due to abolition or for other reasons. This process involves the Finance Minister issuing directions for the transfer of funds that were initially appropriated for the performance of specific functions by the old agency to the new agency. The authority to issue such directions has been delegated by the Finance Minister to the Chief Executive of the Department of Finance and Deregulation, and further to the General Manager, Financial Management Group, and the Division Manager, Financial Reporting and Cash Management Division. This legislative framework ensures that the financial resources are correctly aligned with the operational functions of agencies within the Commonwealth. The instrument in question pertains to the transfer of certain appropriations from the Attorney-General’s Department to the Australian Commission for Law Enforcement Integrity, reflecting a change in the agencies’ functions and the realignment of financial resources accordingly.
Key Provisions
The instrument under Section 32 of the Financial Management and Accountability Act 1997 (FMA Act) directs the transfer of certain appropriations from the Attorney-General’s Department (AGD) to the Australian Commission for Law Enforcement Integrity (ACLEI). Specifically, subsection 32(2)(a) of the FMA Act allows the Finance Minister to transfer appropriations that were originally intended for the old Agency to the new Agency when there is a change in functions. In this case, the instrument transfers $522,000.00 from Appropriation Act (No. 1) 2007-2008, $1,007,663.54 from Appropriation Act (No. 1) 2006-2007, $2,107,407.93 from Appropriation Act (No. 1) 2005-2006, and $264,125.35 in equity injections from Appropriation Act (No. 2) 2005-2006 from AGD to ACLEI. These appropriations are to support ACLEI’s functions in detecting, investigating, and preventing corruption within specified law enforcement agencies.
The obligations under this instrument require the AGD to facilitate the transfer of the specified amounts to ACLEI. This involves ensuring that the financial records and systems accurately reflect the transfer, and that all related documentation and reporting are updated accordingly. The instrument also mandates that ACLEI must properly account for the received funds in accordance with the provisions of the FMA Act and other relevant financial management regulations. Both AGD and ACLEI are required to comply with the directives set out in the instrument and to liaise with the Division Manager, Financial Reporting and Cash Management Division, as designated by the Chief Executive of the Department of Finance and Deregulation, to effect the transfer.
Breach of the provisions outlined in this instrument may result in civil or criminal penalties. Under the FMA Act, individuals or entities failing to comply with the directives may face legal action, including fines and other sanctions. The specific penalties depend on the nature and severity of the breach, but they could include substantial financial penalties or other corrective measures deemed necessary by the court. The exact penalties are not specified in the instrument but are governed by the broader legal framework provided by the FMA Act and other applicable legislation.