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 made under section 31 of the Financial Management and Accountability Act 1997 (FMA Act), which is titled Financial Management and Accountability Net Appropriation Agreement (Professional Services Review) Variation 2005, commencing 4 October 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 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 instrument varies the existing Professional Services Review section 31 agreement, which commenced on 24 May 2005. The instrument adds receipts received on or after 24 May 2005 from the transfer of annual leave entitlements between agencies to the list of eligible receipts.
The effect of the instrument will be to provide Professional Services Review with an appropriation authority to spend amounts equivalent to receipts from the transfer of annual leave entitlements received on or after 24 May 2005. The instrument authorises only future spending of past receipts. The instrument will bring the Professional Services Review section 31 agreement into line with the agreements entered by other agencies across the Commonwealth.
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.
The variation is set out in schedule 1 of the instrument.
Consultation
Professional Services Review is the agency affected by this instrument. The agency agrees with the form 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 Net Appropriation Agreement (Professional Services Review) Variation 2005, an instrument made under section 31 of the Financial Management and Accountability Act 1997 (FMA Act), aims to adjust the existing agreement concerning the Professional Services Review, which began on 24 May 2005. The Act was enacted in 1997 to provide a framework for the financial management and accountability of Commonwealth entities, including the management of appropriations. This specific instrument was introduced to align the Professional Services Review's agreement with other agencies across the Commonwealth by including receipts from the transfer of annual leave entitlements as eligible for appropriation. The instrument is effective only while the relevant provisions exist in the annual Appropriation Acts and is subject to variation or cancellation by the Minister for Finance and Administration at any time without the consent of other parties. The instrument does not require consultation beyond the affected agency, Professional Services Review, as it is intended solely for internal government machinery purposes.
Scope and Application
The Financial Management and Accountability Net Appropriation Agreement (Professional Services Review) Variation 2005 is an instrument made under section 31 of the Financial Management and Accountability Act 1997 (FMA Act), which allows the Minister for Finance and Administration to enter into agreements with other Ministers regarding items in Appropriation Acts marked as “net appropriation.” This particular instrument varies the existing agreement for Professional Services Review, adding receipts from the transfer of annual leave entitlements between agencies to the list of eligible receipts. The variation aims to provide Professional Services Review with an appropriation authority to spend amounts equivalent to these receipts, ensuring consistency with agreements entered by other agencies across the Commonwealth. The instrument is effective only for receipts received on or after 24 May 2005, and its authority is contingent on the existence of specific provisions in the annual Appropriation Acts. Notably, this instrument is 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 (Professional Services Review) Variation 2005 (instrument) is an amendment made under section 31 of the Financial Management and Accountability Act 1997 (FMA Act). The purpose of this instrument is to alter the existing agreement related to Professional Services Review (PSR) and includes receipts from the transfer of annual leave entitlements between agencies as eligible for appropriation. This amendment, which became effective on 24 May 2005, aims to align the PSR agreement with those of other Commonwealth agencies.
The main provisions of the instrument (section 31(3) and 31(4)) enable the Minister for Finance and Administration to enter into agreements that can extend beyond a financial year, and allows for the cancellation or variation of these agreements without the consent of the other party at any time. These agreements permit an increase in departmental appropriation items by amounts received by an agency as specified in the agreement. The instrument, detailed in Schedule 1, specifies that the PSR will now have appropriation authority to spend amounts equivalent to receipts from the transfer of annual leave entitlements received on or after 24 May 2005.
Entities governed by this Act, such as the PSR, must adhere to the conditions set forth in the agreement, which now includes receipts from the transfer of annual leave entitlements. This means that any future spending must be aligned with the provisions of the agreement and the specific provisions of the annual Appropriation Acts. The Minister for Finance and Administration has the authority to modify or cancel these agreements as necessary, ensuring that the appropriations are managed in accordance with the terms set out in the FMA Act.
There are no specific offences or penalties mentioned within the instrument for breach of the agreement provisions. However, general legal consequences may arise from any breach of the terms of the agreement, depending on the nature and extent of the violation. The instrument itself is not subject to the parliamentary disallowance or sunsetting provisions of the Legislative Instruments Act 2003, meaning that it remains in effect as long as the relevant specific provisions exist in the annual Appropriation Acts.