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 Net Appropriation Agreement For Equal Opportunity For Women In The Workplace, commencing 23 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
The instrument identifies the types of receipts which increase an existing appropriation For Equal Opportunity For Women In The Workplace. 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 agency.
For example, where an agency sells minor assets, such as its surplus office furniture and fittings, the amounts received from the sale will be available for expenditure by that agency. Without the agreement, any amounts received by the agency would not be available to be spent by the agency, without further appropriation by Parliament.
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.
Eligible receipts covered by the instrument are set out in clause 5.1 of the instrument.
Consultation
The Equal Opportunity For Women In The Workplace is the agency affected by this instrument. The agency was provided with drafts of the instrument before the instrument was finalised and 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 Act 1997 (FMA Act) was enacted to address the need for robust financial management and accountability within the Australian government. This Act provides a framework for the effective management of public money and the accountability of government agencies. Section 31 of the FMA Act allows the Minister for Finance and Administration to enter into agreements with other ministers regarding net appropriations, enabling the increase of appropriation items by specific receipts. The policy objective is to ensure that agencies can utilise funds from specified sources without the need for additional appropriation by Parliament, thereby streamlining financial processes and enhancing efficiency. The instrument, Net Appropriation Agreement For Equal Opportunity For Women In The Workplace, specifies the types of receipts that can augment existing appropriations, ensuring these funds can be utilised for intended purposes.
Scope and Application
The Net Appropriation Agreement For Equal Opportunity For Women In The Workplace, made under section 31 of the Financial Management and Accountability Act 1997, applies to the agency responsible for equal opportunity for women in the workplace. This agreement enables the agency to increase its existing appropriations by receipts it receives, such as from the sale of minor assets like surplus office furniture and fittings. The agreement is not limited to a particular financial year, allowing it to continue until circumstances require its renewal. The Minister for Finance and Administration has the authority to enter into such agreements with other Ministers, and these agreements can be cancelled or varied at any time without the consent of the other party. The agreement is given effect by specific provisions within the annual Appropriation Acts and applies only while these provisions exist. The agency was provided with drafts of the instrument before it was finalised and agrees with its form. 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 instrument, which is an agreement under section 31 of the Financial Management and Accountability Act 1997 (FMA Act), pertains to the allocation of funds for equal opportunity for women in the workplace, effective from 23 June 2005. This agreement, titled "Net Appropriation Agreement For Equal Opportunity For Women In The Workplace," allows the Finance Minister to enter into agreements with other Ministers regarding items in Appropriation Acts marked as "net appropriation." This means that funds received by an agency, such as the sale of surplus office furniture, can be added to their existing appropriations and used for specified purposes without requiring further appropriation by Parliament.
The agreement can be for any duration and is not necessarily tied to a particular financial year, continuing until changes in circumstances necessitate renewal. The Finance Minister has the authority to cancel or modify the agreement at any time without the consent of the other party, as stipulated in subsection 31(4) of the FMA Act. This flexibility allows for adjustments in funding as needed.
The obligations imposed by this Act require the relevant agency, in this case, the Equal Opportunity For Women In The Workplace, to adhere to the terms of the agreement. The agency must ensure that the receipts covered by the agreement, such as the sale proceeds of minor assets, are correctly recorded and used for the specified purposes. Additionally, the agency was provided with drafts of the instrument and agrees with its form, indicating their consent and cooperation in implementing the agreement.
Failure to comply with the terms of the agreement could result in the agency being unable to utilise the receipts for their intended purposes, potentially impacting their ability to fund initiatives aimed at promoting equal opportunity for women in the workplace. The instrument's provisions are integrated into the annual Appropriation Acts, meaning its effectivity is contingent on the existence of these specific provisions within those Acts. Given that this agreement is for internal governmental machinery, no external consultation was deemed necessary, as per sections 17 and 18 of the Legislative Instruments Act 2003.