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 Refugee 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 Refugee Review Tribunal.
On 28 February 2007 the Department of Finance and Administration varied the Net Appropriation Agreement [title of original instrument] by the Financial Management and Accountability Net Appropriation Agreement Refugee Review Tribunal Variation. The effect of the instrument is to cancel the Refugee 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 Refugee 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 provide a framework for the management of public money and to ensure accountability in the use of public funds. This Act was introduced to address the need for improved financial management practices and greater transparency in the allocation and expenditure of public funds across government agencies. The FMA Act was enacted by the Parliament of Australia, reflecting a policy objective to enhance the efficiency and effectiveness of financial management within the public sector. Section 31 of the Act allows the Minister for Finance and Administration to enter into agreements with other Ministers for items in Appropriation Acts marked as “net appropriation,” enabling the increase of departmental appropriation items by amounts received by specified agencies. This mechanism facilitates the flexible management of funds, ensuring that agencies like the Refugee Review Tribunal can effectively utilise their receipts for intended purposes.
Scope and Application
The Financial Management and Accountability Net Appropriation Agreement for the Refugee Review Tribunal Variation, made under section 31 of the Financial Management and Accountability Act 1997, pertains to the Refugee Review Tribunal, enabling it to spend the amounts received as specified in the agreement. This agreement is crucial for the financial management of the Tribunal, ensuring that any funds received by the agency can be allocated and spent according to the terms set out in the agreement. The operation of this agreement is governed by the annual Appropriation Acts, which provide the necessary provisions to increase the relevant appropriation items. Notably, the instrument only has effect while the specific provisions exist in the annual Appropriation Acts, and the agreement can be varied or cancelled by the Minister for Finance and Administration at any time without the consent of the other party. The Refugee Review Tribunal was consulted in the drafting of this instrument, and as it pertains to the internal machinery of government, no further consultation was deemed necessary.
Key Provisions
The Financial Management and Accountability Net Appropriation Agreement for the Refugee Review Tribunal Variation, commencing on 1 July 2006, is an instrument made under section 31 of the Financial Management and Accountability Act 1997 (FMA Act) (section 31). This agreement allows for the variation of departmental or administered appropriation items for the Refugee Review Tribunal. Specifically, it enables the Tribunal to increase its appropriation items by the amounts received as specified in the agreement, in accordance with the annual Appropriation Acts (section 31(3)). The agreement, which may be for any period, including longer than a financial year, was varied by the Department of Finance and Administration on 28 February 2007, and its effect is to cancel the original Refugee Review Tribunal section 31 agreement.
Under this Act, the obligations imposed on the parties involved primarily revolve around the financial management and accountability of the Refugee Review Tribunal. The Minister for Finance and Administration, through the agreement, has the authority to increase the appropriation items for the Tribunal, provided the amounts are received as specified. The Refugee Review Tribunal must ensure it adheres to the financial guidelines set out in the agreement and the Appropriation Acts. The agreement itself does not impose any additional obligations on the Tribunal beyond what is outlined in the annual Appropriation Acts.
The FMA Act does not explicitly outline specific offences or penalties for breaches of the net appropriation agreement. However, the Act does provide that the Minister for Finance and Administration can cancel or vary the agreement at any time without the consent of the other party (section 31(4)). While there are no specific criminal or civil penalties outlined for breaches of this agreement within the FMA Act, any failure to comply with the terms of the agreement could potentially lead to financial mismanagement or accountability issues, which might be addressed through other relevant legislation or administrative actions. The agreement is not subject to the parliamentary disallowance and sunsetting provisions of the Legislative Instruments Act 2003, meaning it remains in effect until varied or cancelled by the Minister.