EXPLANATORY STATEMENT
Financial Management and Accountability Act 1997, Section 31
Agreements for “Net Appropriations”
The instrument to which this explanatory statement relates
This explanatory statement relates to an instrument (the instrument) made under section 31 of the Financial Management and Accountability Act 1997 (FMA Act), which is entitled Financial Management and Accountability Net Appropriation Agreement for the Migration Review Tribunal Variation, commencing on 1 July 2006.
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 with other Ministers 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) 2004-2005), allows departmental (and in select cases, administered) appropriation items to be increased by amounts received by an agency as specified in the agreement.
Subsection 31(3) of the FMA Act provides that an agreement may be for any period (that is, it need not relate to a particular Appropriation Act or Acts), including a period longer than a financial year. 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 net appropriation agreement relating to the Refugee Review Tribunal, made pursuant to section 31 of the Financial Management ad Accountability Act 1997, is cancelled. The instrument is given effect by the annual appropriation Acts, which provide that the relevant departmental or administered appropriation item is increased in accordance with the agreement. This enables the receipts to be spent by the Migration Review Tribunal.
On 28 February 2007 the Department of Finance and Administration varied the Net Appropriation Agreement Migration Review Tribunal by the Financial Management and Accountability Net Appropriation Agreement Migration Review Tribunal Variation. The effect of the instrument is to cancel the Migration Review Tribunal section 31.
Notes on the instrument
Specific provisions within the annual Appropriation Acts give effect to the instrument. Therefore, the instrument only has effect while the relevant specific provisions exist in the annual Appropriation Acts.
Consultation
The Migration Review Tribunal is the agency affected by this instrument. The agency was consulted in the drafting of the instrument. As the instrument is for internal machinery of government purposes only, no consultation was considered necessary with other persons (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 Act 1997 (FMA Act) was enacted to address the need for effective financial management and accountability within the Australian Government. The Act provides a framework for the administration of Commonwealth finances, ensuring that funds are properly appropriated, managed, and accounted for. Section 31 of the FMA Act enables the Minister for Finance and Administration to enter into agreements with other ministers regarding items in Appropriation Acts marked as “net appropriation.” These agreements allow for the adjustment of departmental appropriation items based on specified receipts, facilitating more flexible financial management. The policy objective of the Act is to promote transparency and accountability in the use of public funds, ensuring that resources are allocated efficiently and effectively to meet the needs of the Australian Government.
Scope and Application
The Financial Management and Accountability Net Appropriation Agreement Migration Review Tribunal Variation, made under section 31 of the Financial Management and Accountability Act 1997, specifically pertains to the Migration Review Tribunal. This instrument serves to cancel the prior Net Appropriation Agreement concerning the Migration Review Tribunal, and it is operationalised through specific provisions within the annual Appropriation Acts. The instrument is designed to allow the Migration Review Tribunal to spend receipts in accordance with the agreement, thereby adjusting the relevant departmental or administered appropriation item. This agreement is applicable within the Commonwealth of Australia, and its scope extends to the Migration Review Tribunal as the sole agency affected. The instrument's effect is contingent on the existence of the relevant specific provisions in the annual Appropriation Acts. Additionally, while the instrument is for internal machinery of government purposes, the Migration Review Tribunal was consulted in its drafting. Notably, agreements under section 31 of the FMA Act are exempt from the parliamentary disallowance and sunsetting provisions of the Legislative Instruments Act 2003.
Key Provisions
The Financial Management and Accountability Act 1997 (FMA Act) includes section 31, which allows the Minister for Finance and Administration to enter into agreements with other ministers regarding appropriations marked as "net appropriations." These agreements, which can cover periods longer than a financial year and can be cancelled or varied by the Finance Minister without consent, enable departments or agencies to increase their appropriation items by amounts received as specified in the agreement (section 31(3) and (4)). The operation of these agreements is facilitated by specific provisions within the annual Appropriation Acts, which increase the relevant departmental or administered appropriation items in accordance with the agreement, allowing for the receipts to be spent by the relevant agency, such as the Migration Review Tribunal.
The obligations under this Act for the parties involved are primarily administrative and procedural. The Minister for Finance and Administration must enter into these agreements with other ministers for the purposes outlined in the Act, ensuring that the appropriations are appropriately marked and managed. The other ministers, in turn, must ensure that the agencies under their purview comply with the terms of the agreement and manage their appropriations as stipulated. This includes making sure that the specific provisions within the annual Appropriation Acts are in place to give effect to the instrument.
There are no explicit offences or penalties outlined in the section 31 of the FMA Act for breaches of the agreements. However, the act of not complying with the terms of these agreements could potentially lead to broader financial mismanagement or accountability issues within the government. The lack of parliamentary disallowance and sunsetting provisions for agreements under section 31 means that these agreements remain in effect unless specifically cancelled or varied by the Finance Minister. The Migration Review Tribunal, as the agency affected by this instrument, was consulted during the drafting of the instrument, ensuring that its interests and operational requirements are considered in the agreement.