Financial Management and Accountability Net Appropriation Agreement (Department of Industry, Tourism and Resources) Variation No. 1 (2007)

Overview

The Financial Management and Accountability Act 1997 was enacted to ensure that government funds are managed efficiently and effectively, and that accountability is maintained. The Act provides the framework for the appropriation of funds by the Commonwealth and the management of these funds by government entities. One of the key mechanisms introduced by the Act is the ability for the Minister for Finance and Administration to enter into agreements with other Ministers for items in Appropriation Acts that are marked as "net appropriations". This allows for flexibility in the management of departmental and administered appropriation items by enabling them to be increased by amounts received by an agency as specified in the agreement. The instrument made under section 31 of the Act, the Financial Management and Accountability Net Appropriation Agreement for the Department of Industry, Tourism and Resources Variation, is an example of how this mechanism is applied to allow for additional eligible receipts to be included in the agreement, such as those from the Australian Building Codes Board Special Account. The Act and its provisions are designed to ensure that the financial management of the Commonwealth is transparent, accountable, and in line with policy objectives set by the relevant legislature.

Scope and Application

The Financial Management and Accountability Act 1997 (FMA Act) authorises the Minister for Finance and Administration to enter into agreements with other Ministers concerning items in Appropriation Acts marked as “net appropriation”. The specific instrument in question, the Financial Management and Accountability Net Appropriation Agreement for the Department of Industry, Tourism and Resources Variation, was made under section 31 of the FMA Act. This instrument, which came into effect upon registration on the Federal Register of Legislative Instruments on 9 March 2007, modifies the original agreement to include an additional eligible receipt covering the Australian Building Codes Board Special Account. This variation aims to adjust the appropriation items of the Department of Industry, Tourism and Resources in accordance with the amounts received by the specified agency, as permitted by the annual Appropriation Acts. The agreement can extend beyond a single financial year and can be varied or cancelled by the Finance Minister at any time without the need for consent from the other party. The instrument is only in effect as long as the specific provisions in the annual Appropriation Acts remain in place. Notably, agreements under section 31 of the FMA Act are exempt from the parliamentary disallowance and sunsetting provisions outlined in the Legislative Instruments Act 2003.

Key Provisions

The Financial Management and Accountability Net Appropriation Agreement for the Department of Industry, Tourism and Resources Variation (section 31) represents a specific instance of an agreement under the Financial Management and Accountability Act 1997 (FMA Act). Section 31 of the FMA Act allows the Minister for Finance and Administration to enter into agreements with other Ministers concerning items in Appropriation Acts that are marked as “net appropriations.” This means that the appropriations available to a department can be increased by any amounts received by the agency, as specified in the agreement. The agreement can cover any period, not necessarily tied to a specific financial year, and can be varied or cancelled by the Minister for Finance and Administration without the consent of the other party. In this case, the agreement was varied on 9 March 2007 to include an additional eligible receipt for the Australian Building Codes Board Special Account. Under this Act, the obligations primarily rest on the Minister for Finance and Administration to ensure that agreements are made and maintained in accordance with the requirements of the FMA Act and the Appropriation Acts. The Minister must also consult with the affected department, in this case, the Department of Industry, Tourism and Resources, during the drafting of the agreement. The obligations also include the responsibility to ensure that any increases in appropriations are correctly accounted for and used for the purposes intended. The affected department, in this instance, the Department of Industry, Tourism and Resources, must comply with the terms of the agreement and ensure that any additional funds received are properly recorded and utilised within the scope of the agreement. For breaches of the obligations or terms of the agreement, the Act does not explicitly outline specific offences or penalties. However, given the nature of the agreement and its purpose within the framework of financial management and accountability, any significant non-compliance could potentially result in administrative or financial repercussions. The Minister for Finance and Administration has the authority to cancel or vary the agreement at any time, which serves as a form of enforcement. Additionally, any misuse of funds or failure to comply with financial management regulations could lead to broader legal or administrative consequences under other relevant Acts. It is important for all parties to adhere strictly to the terms of the agreement to avoid any adverse outcomes.