EXPLANATORY STATEMENT
Financial Management and Accountability Act 1997,
Net Appropriation Agreement (Australian Public Service Commission) Variation (2006)
The instrument to which this explanatory statement relates
This explanatory statement relates to an instrument, made under section 31 of the Financial Management and Accountability Act 1997 (FMA Act), entitled “Financial Management and Accountability Net Appropriation Agreement (Australian Public Service Commission) Variation (2006)” (the instrument).
The legislative authority under which the instrument is made
Section 31 of the FMA Act enables the Minister for Finance and Administration (the Finance Minister) to enter into agreements for the purposes of items in Appropriation Acts that are marked “net appropriation” (net appropriation agreements).
Section 31 of the FMA Act, together with certain standard provisions of the annual Appropriation Acts, for example section 10 of Appropriation Act (No.1) 2005-2006, provides for appropriation items to be increased by amounts received by an agency for items specified in the agreement, allowing amounts equivalent to the receipts to be spent.
Subsection 31(3) of the FMA Act provides that an agreement may be for any period, including a period longer than a financial year. An agreement need not relate to a particular Appropriation Act or Acts. Generally, agreements continue until circumstances require their renewal.
Subsection 31(4) of the FMA Act enables the Finance Minister to cancel or vary an agreement at any time without the consent of the other party.
Purpose and operation of the instrument
The instrument varies the operation of the current net appropriation agreement for the Australian Public Service Commission (APSC), which commenced on 23 June 2005.
The instrument adds receipts received as financial incentives to enter into leasing arrangements to the list of eligible receipts in the APSC’s current agreement.
The instrument commences upon registration on the Federal Register of Legislative Instruments.
Consultation
The Department of Finance and Administration (Finance) has consulted with APSC regarding the effect of this instrument.
As the instrument is for internal machinery of government purposes only, no consultation, beyond that identified above, was considered necessary (see sections 17 and 18 of the Legislative Instruments Act 2003).
Additional Information
Agreements made under section 31 of the FMA Act are not subject to the parliamentary disallowance and sunsetting provisions of the Legislative Instruments Act 2003: see item 19 in subsection 44(2) and item 17 in subsection 54(2) of the Legislative Instruments Act 2003.
Overview
The Financial Management and Accountability Net Appropriation Agreement (Australian Public Service Commission) Variation (2006) was enacted under the Financial Management and Accountability Act 1997. This instrument was introduced to address the need to update the net appropriation agreement for the Australian Public Service Commission (APSC) to include additional eligible receipts for financial incentives received from leasing arrangements. The instrument was enacted by the Minister for Finance and Administration, enabling the adjustment of the APSC’s net appropriation agreement to reflect changes in financial management practices. The policy objective is to ensure that the APSC’s appropriation agreements are flexible and responsive to the agency’s operational needs, allowing it to efficiently manage and allocate funds as required.
Scope and Application
The Financial Management and Accountability Net Appropriation Agreement (Australian Public Service Commission) Variation (2006) applies specifically to the Australian Public Service Commission (APSC) and pertains to the management and accountability of financial appropriations within the federal government. This instrument, made under section 31 of the Financial Management and Accountability Act 1997, modifies the existing net appropriation agreement for the APSC to include financial incentives received from leasing arrangements as eligible receipts. This variation allows the APSC to increase its appropriation items by the amounts received, enabling equivalent spending of these receipts. The agreement is applicable across the Commonwealth, with no specific geographic limitations, and remains in effect until circumstances necessitate its renewal or variation by the Minister for Finance and Administration. The Act does not specify any exclusions or exemptions, and the instrument itself does not extend or restrict application through subordinate instruments, though it is subject to the provisions of the Financial Management and Accountability Act 1997. The instrument is intended for internal governmental purposes, and thus, broader consultation beyond the APSC was deemed unnecessary.
Key Provisions
The Financial Management and Accountability Net Appropriation Agreement (Australian Public Service Commission) Variation (2006) modifies the existing agreement for the Australian Public Service Commission (APSC) which was originally established under section 31 of the Financial Management and Accountability Act 1997 (FMA Act). This instrument specifically addresses the inclusion of financial incentives received for entering into leasing arrangements as eligible receipts that can be spent by the APSC (subsection 31(3) of the FMA Act). Under the original agreement, these financial incentives were not considered eligible, but the variation now allows the APSC to spend these receipts in line with the agreement. The variation comes into effect upon its registration on the Federal Register of Legislative Instruments.
The primary obligation of the APSC, as modified by this instrument, is to account for and manage its financial resources in accordance with the terms of the net appropriation agreement. This includes ensuring that any financial incentives received from leasing arrangements are included in the budget and expenditure plans as per the agreement. The APSC must also ensure that the spending of these receipts aligns with the financial management policies and practices outlined in the FMA Act and other relevant legislation.
Failure to comply with the terms of the net appropriation agreement can have significant legal and financial consequences. Under the FMA Act, breaches of the agreement may result in civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties can include fines, restitution, or other financial penalties as deemed appropriate by the court. Criminal penalties may be imposed in cases of wilful or negligent breaches, with maximum penalties including fines of up to $21,000 for individuals and $105,000 for corporations, depending on the specific offence and jurisdiction. The consequences underscore the importance of adherence to the terms of the agreement and the financial management practices governed by the FMA Act.