Net Appropriation Agreement (Departmental) for the Department of Agriculture, Fisheries and Forestry (20/06/05)

Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted to address the need for robust financial management and accountability frameworks within the Australian government. The Act provides a legal basis for the management of public finances and ensures that government agencies adhere to stringent financial controls and accountability measures. Section 31 of the FMA Act specifically empowers the Minister for Finance and Administration to enter into agreements with other ministers regarding "net appropriations". These agreements allow for the increase of departmental appropriations by amounts received by an agency, such as proceeds from the sale of surplus assets, thereby ensuring that these funds can be utilised for departmental expenditure without the need for additional parliamentary appropriation. The instrument in question, which took effect on 20 June 2005, pertains to the Department of Agriculture Fisheries and Forestry and outlines the types of receipts that can augment existing appropriations for the department. The purpose of this agreement is to streamline financial management by enabling agencies to spend certain receipts directly, thereby improving operational efficiency and accountability within the government’s financial framework.

Scope and Application

The Financial Management and Accountability Act 1997, Section 31 Agreements for "Net Appropriations" pertains specifically to the Department of Agriculture Fisheries and Forestry. This legislative instrument, which commenced on 20 June 2005, allows for the increase of departmental appropriation items by amounts received by the agency, as specified in the agreement. Such agreements can cover any period and do not necessarily align with a particular Appropriation Act, potentially extending beyond a financial year. The Finance Minister retains the authority to cancel or vary these agreements at any time without requiring consent from other parties. The instrument is activated through specific provisions within the annual Appropriation Acts, making it effective only while these provisions exist. Eligible receipts covered by the instrument are detailed in clause 5.1, and the Department of Agriculture Fisheries and Forestry, being the affected agency, was consulted and agrees with the instrument's form. Notably, these agreements are exempt from the parliamentary disallowance and sunsetting provisions outlined in the Legislative Instruments Act 2003.

Key Provisions

The instrument under Section 31 of the Financial Management and Accountability Act 1997 (FMA Act) is a Net Appropriation Agreement for the Department of Agriculture, Fisheries, and Forestry, commencing on 20 June 2005. This agreement allows for the adjustment of departmental appropriation items based on certain receipts as specified in the agreement. The Minister for Finance and Administration can enter into these agreements to increase appropriations for departments through specific receipts (Section 31(1)). The agreement can be for any duration, including periods longer than a financial year, and it continues until circumstances necessitate its renewal (Section 31(3)). The Finance Minister has the authority to cancel or vary the agreement at any time without requiring the consent of the other party (Section 31(4)). The obligations under this Act require the Minister for Finance and Administration to ensure that any receipts specified in the agreement, such as sales of minor assets by the Department of Agriculture, Fisheries, and Forestry, are included in the relevant appropriation items. This enables the department to spend these receipts without needing further appropriation by Parliament. The agreement is given effect through the annual Appropriation Acts, which detail how the departmental appropriation item is increased in line with the agreement. The Department of Agriculture, Fisheries, and Forestry, being the agency affected, was provided with drafts of the instrument before finalisation and agrees with its form. Because this instrument is for internal machinery of government purposes only, no consultation was deemed necessary with other parties. There are no specific offences or penalties outlined in the instrument for breaching the terms of the agreement. However, it is important to note that 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. This means that such agreements remain in effect unless specifically cancelled or varied by the Minister for Finance and Administration. The implications of breaching the agreement would typically be internal to the government and would not result in criminal or civil penalties under this specific legislation. Instead, the consequences would likely involve internal government processes and potential financial management reviews.