Direction under section 32, Financial Management and Accountability Act 1997 - Adjustments of Appropriations on Change of Agency Functions (No. 9 of 2005-2006)

Overview

The Financial Management and Accountability Act 1997 was enacted to ensure the integrity of financial management within the Australian Public Service, addressing the need for clear accountability and proper management of public funds. The Act provides mechanisms for the management of appropriations and the accountability of public money, ensuring that funds are used efficiently and effectively for the purposes for which they are allocated. Section 32 of the Act specifically deals with the adjustments of appropriations when there is a change in the functions of an agency. This section allows for the reallocation of funds between agencies when responsibilities are transferred, ensuring that financial resources follow the functions they are intended to support. The instrument issued under Section 32 on 20 October 2005, directed by the Chief Executive of the Department of Finance and Administration, exemplifies the application of this section. In this instance, an appropriation of $4,292,500 from the Attorney-General’s Department was transferred to the Department of Prime Minister and Cabinet following the transfer of responsibility for managing the integrated accreditation and access control system for APEC 2007. This adjustment was made to ensure that the appropriated funds are appropriately aligned with the agency responsible for the related functions, thereby maintaining the integrity and effectiveness of the financial management processes as outlined in the FMA Act.

Scope and Application

The instrument in question, which is a Direction under Section 32 of the Financial Management and Accountability Act 1997, applies to the transfer of appropriations between two government departments. Specifically, it facilitates the transfer of departmental outputs amounting to $4,292,500 from the Attorney-General’s Department to the Department of Prime Minister and Cabinet, as agreed upon by the Chief Financial Officers of both departments. This adjustment arises due to the transfer of responsibility for managing the integrated accreditation and access control system for APEC 2007 from the Attorney-General’s Department to the Department of Prime Minister and Cabinet, a decision made by the Prime Minister on 2 August 2005. The instrument, authorised under Section 32 of the FMA Act, ensures that the appropriations provided for these functions are correctly reallocated to the new responsible department. The instrument is a tool used to implement the statutory provisions concerning the adjustment of appropriations when agency functions change, thereby maintaining financial accountability and compliance with legislative mandates.

Key Provisions

The primary operative section of the instrument is Section 32 of the Financial Management and Accountability Act 1997 (FMA Act), which deals with the adjustment of appropriations when there is a change in the functions of an agency. Specifically, subsection 32(2)(a) allows for the transfer of appropriations from an old agency to a new agency if the functions of the former are assumed by the latter, either due to the abolition of the old agency or for other reasons. In this context, the instrument mandates the transfer of a total of $4,292,500 from the Attorney-General’s Department to the Department of Prime Minister and Cabinet. The obligations and requirements imposed by the Act primarily concern the Finance Minister, who has the authority to issue directions for the transfer of appropriations as outlined in Section 32. The Finance Minister has delegated this power to the Chief Executive of the Department of Finance and Administration, who further delegated it to the General Manager, Financial Management Group, and the Division Manager, Financial Reporting and Cash Management Division. These officials are tasked with ensuring that the specified appropriations are correctly and efficiently transferred from the Attorney-General’s Department to the Department of Prime Minister and Cabinet. The transfer amount has been pre-agreed between the Chief Financial Officers of both departments in line with established financial processes. The instrument itself directs that the specific appropriations amounting to $4,292,500, which were originally provided to the Attorney-General’s Department in the Appropriation Act (No. 1) 2005-06, be reallocated to the Department of Prime Minister and Cabinet. This adjustment follows the Prime Minister’s decision on 2 August 2005 to transfer responsibility for managing the integrated accreditation and access control system for APEC 2007 from the Attorney-General’s Department to the Department of Prime Minister and Cabinet. The transfer is made in accordance with Section 32 of the FMA Act to ensure proper financial management and accountability. Any breach of the requirements set out in the instrument could result in various civil or criminal consequences. Although the explanatory statement does not specify particular offences or penalties, the underlying legislation, the FMA Act, does provide for potential sanctions. Under the FMA Act, unauthorised expenditure or mismanagement of funds can lead to significant penalties. The exact nature and severity of these penalties depend on the specific breach and the jurisdiction, but they can include fines and imprisonment for individuals found guilty of serious misconduct. The act of failing to comply with the directives could also have broader implications for the responsible officials and the agencies involved, potentially affecting their reputation and future financial allocations.