Financial Management and Accountability Net Appropriation Agreement (Department of Industry, Tourism and Resources) Variation (2006)

Overview

The Financial Management and Accountability Act 1997 was enacted by the Commonwealth Parliament to establish a robust framework for financial management and accountability within the Australian government. This Act was introduced to address the need for improved financial oversight and transparency, particularly in the context of managing government funds and ensuring that expenditures align with the appropriations approved by Parliament. Section 31 of the Act enables the Minister for Finance and Administration to enter into agreements with other Ministers concerning items in Appropriation Acts that are marked as “net appropriations.” The purpose of these agreements is to allow departmental appropriation items to be increased by specified amounts received by an agency, as outlined in the agreement. The policy objective is to provide flexibility in managing government finances while maintaining accountability and adherence to budgetary constraints. The 2006 variation to the Net Appropriation Agreement for the Department of Industry, Tourism and Resources exemplifies this flexibility by incorporating additional eligible receipts into the agreement, thereby enhancing the department’s ability to manage its finances effectively.

Scope and Application

The Financial Management and Accountability Net Appropriation Agreement Department of Industry, Tourism and Resources Variation 2006 is an instrument made under section 31 of the Financial Management and Accountability Act 1997, which allows the Minister for Finance and Administration to enter into agreements with other Ministers for items in Appropriation Acts that are marked "net appropriation". The purpose of this particular instrument is to vary the Net Appropriation Agreement for the Department of Industry, Tourism and Resources by inserting additional eligible receipts into the agreement. These additional receipts include various types of income received by the Department, such as receipts from the sale of goods and services, payments for associated benefits provided, and receipts from the sub-leasing of real property, among others. The instrument applies to the Department of Industry, Tourism and Resources and has effect only while specific provisions exist in the annual Appropriation Acts. The instrument was drafted in consultation with the Department, and as it is for internal machinery of government purposes, no further consultation was considered necessary. It is worth noting that 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.

Key Provisions

The Financial Management and Accountability Net Appropriation Agreement Department of Industry, Tourism and Resources Variation 2006, as provided under section 31 of the Financial Management and Accountability Act 1997 (FMA Act), allows the Minister for Finance and Administration to enter into agreements with other Ministers to adjust departmental appropriation items based on specific receipts (section 31(3)). This particular variation, effective from 24 June 2006, pertains to the Department of Industry, Tourism and Resources. It modifies clause 5.1 to include additional eligible receipts that can increase the department's appropriation items. These additional receipts encompass a wide range of income sources, including sales of goods and services, payments for benefits, proceeds from the sale of minor assets, transfers of leave entitlements, subsidy and grant monies, amounts received from the Australian Taxation Office, court-awarded costs, sponsorships, grants, donations, financial incentives from leasing arrangements, payments under the ADF Reserves Employer Support Payment Scheme, funds from the Energy Special Account and the Australian Building Codes Board Account, and sub-leasing of real property. Moreover, it includes amounts representing returned commissions for travel services booked through third parties on behalf of the Department. The obligations imposed on the parties governed by this Act include ensuring that any agreement entered into under section 31 is consistent with the annual Appropriation Acts and that the additional receipts identified are accurately reported and accounted for. The Finance Minister must also ensure that any agreements are reviewed and updated as necessary to reflect changes in the department's financial circumstances or legislative requirements. The affected department, in this case, the Department of Industry, Tourism and Resources, must comply with the terms of the agreement and report any relevant receipts as stipulated. The Finance Minister has the authority to cancel or vary any agreement at any time without the consent of the other party, providing flexibility in managing the appropriations. In terms of consequences for breach, the Act does not specify particular offences or penalties for non-compliance with the agreements or the variation. However, any failure to adhere to the terms of the agreements could lead to financial mismanagement or misreporting of funds, which may have broader implications under other sections of the FMA Act or other relevant legislation. Non-compliance could potentially lead to disciplinary actions, financial penalties, or other administrative consequences as deemed appropriate by the relevant authorities. Given the internal nature of these agreements, the primary focus is on ensuring accuracy and compliance rather than imposing punitive measures.