EXPLANATORY STATEMENT
Financial Management and Accountability Act 1997,
Section 31 Agreements for “Net Appropriations” Cancellation
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 Cancellation 2005” (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”.
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, allows appropriation items to be increased by amounts received by an agency for items specified in the agreement.
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 cancels all operative net appropriation agreements that commenced on or before 30 June 2004.
The Department of Finance and Administration, in consultation with all agencies subject to the FMA Act, has determined that no agency is currently relying on a net appropriation agreement that commenced on or before 30 June 2004. Consequently, there is no need for any such agreement to remain operational.
Section 52 of the Auditor-General Act 1997 provides that the Finance Minister must not cancel or vary a net appropriation agreement made with the Auditor-General, in respect of the Australian National Audit Office (ANAO), unless the Auditor-General consents. The instrument does not apply to a net appropriation agreement made in relation to the ANAO as its current net appropriation agreement was made on 29 June 2005.
Consultation
All FMA Act agencies have been consulted on the likely effect of the instrument. The Department of Finance and Administration has determined that no FMA Act agency is relying on any net appropriation agreement cancelled by the instrument.
The Australian Government Solicitor was consulted for technical advice on the 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.