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 (Office of Film and Literature Classification) Variation, commencing 29 June 2005.
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
On 29 June 2005 the Department of Finance and Administration varied the Net Appropriation Agreement For Office of Film and Literature Classification by the Financial Management and Accountability Net Appropriation Agreement (Office of Film and Literature Classification) Variation.
The effect of the instrument is to replace clause 1.3 in the Net Appropriation Agreement For Office of Film and Literature Classification, in order to vary the commencement date of the instrument.
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 Office of Film and Literature Classification 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 was enacted to provide a robust framework for the management and accountability of public finances in Australia. This Act was introduced to address the need for clear guidelines and controls on the use of public funds, ensuring that government spending is transparent, accountable, and in line with the appropriations made by Parliament. The enacting body for this Act is the Parliament of Australia, with the policy objective of enhancing the efficiency and effectiveness of financial management within the public sector. The Act allows the Minister for Finance and Administration to enter into agreements with other Ministers for items in Appropriation Acts that are marked "net appropriation", facilitating the adjustment of departmental appropriations based on specific agency receipts. This legislative instrument, effective from 29 June 2005, varies the Net Appropriation Agreement for the Office of Film and Literature Classification, ensuring that the commencement date of the instrument is appropriately aligned with the relevant provisions in the annual Appropriation Acts.
Scope and Application
The Financial Management and Accountability Net Appropriation Agreement (Office of Film and Literature Classification) Variation instrument, commencing on 29 June 2005, is a legislative instrument made under section 31 of the Financial Management and Accountability Act 1997. This Act allows the Minister for Finance and Administration to enter into agreements with other ministers concerning items marked "net appropriation" in Appropriation Acts. These agreements pertain to the appropriation items of certain departments and, in specific cases, administered items. The purpose of this particular instrument was to vary the Net Appropriation Agreement for the Office of Film and Literature Classification, modifying the commencement date of the agreement. The instrument only has effect while the specific provisions exist in the annual Appropriation Acts and can be varied or cancelled by the Finance Minister at any time without the consent of the other party. It is noteworthy that agreements made 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 Net Appropriation Agreement (Office of Film and Literature Classification) Variation, which came into effect on 29 June 2005, is an instrument made under section 31 of the Financial Management and Accountability Act 1997 (FMA Act) (paragraph 1). Section 31 of the FMA Act empowers the Minister for Finance and Administration to enter into agreements with other Ministers regarding items in Appropriation Acts that are marked as "net appropriation" (paragraph 2). These agreements can allow departmental appropriation items to be increased by amounts received by an agency as specified in the agreement (paragraph 3). Subsection 31(3) of the FMA Act states that an agreement can be for any period, and need not relate to a particular Appropriation Act or Acts, and can extend beyond a financial year (paragraph 4). Furthermore, subsection 31(4) of the FMA Act allows the Minister for Finance and Administration to cancel or vary an agreement at any time without the consent of the other party (paragraph 5).
The obligations and requirements imposed by the FMA Act on the parties involved include the need for the Minister for Finance and Administration to consult with the affected agency, in this case, the Office of Film and Literature Classification, during the drafting of the instrument (paragraph 6). Moreover, as the instrument is for internal machinery of government purposes, no further consultation with other persons is considered necessary (paragraph 7). Additionally, 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 (paragraph 8).
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach; however, it is essential to note that the 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 (paragraph 9). This means that any breaches or non-compliance with the terms of the agreements would likely be addressed through internal mechanisms and not necessarily through the imposition of fines, imprisonment, or other punitive measures (paragraph 10). The consequences of a breach would depend on the specific terms of the agreement and the nature of the breach itself.