Net Appropriation Agreement for the Office of the Official Secretary to the Governor-General

Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted to provide a framework for the management of public money by the Commonwealth. This Act aims to address the need for clear and accountable financial management practices within government agencies. Section 31 of the FMA Act allows the Minister for Finance and Administration to enter into agreements with other Ministers concerning items in Appropriation Acts that are marked "net appropriation". These agreements enable certain receipts, such as those from the sale of minor assets, to be added to existing appropriations, thereby increasing the funds available for expenditure by the relevant agency without requiring additional appropriation by Parliament. The purpose of the instrument is to identify the types of receipts that can increase existing appropriations for specific agencies, such as the Office of the Official Secretary to the Governor-General, ensuring that these receipts can be used for intended expenditures. This legislative instrument is essential for maintaining efficient financial management within government departments and administered entities.

Scope and Application

The Financial Management and Accountability Act 1997, through Section 31, facilitates agreements concerning "net appropriations" for specific items in Appropriation Acts. This Act applies to the Minister for Finance and Administration, who can enter into agreements with other Ministers to enhance departmental or administered appropriation items by amounts received by an agency as specified in the agreement. Such agreements are not restricted to a particular Appropriation Act or financial year and can continue beyond a financial year. The purpose of the instrument in question is to identify the types of receipts that increase an existing appropriation for the Office of the Official Secretary to the Governor-General, with these agreements taking effect through specific provisions in the annual Appropriation Acts. The Office of the Official Secretary to the Governor-General is the primary entity affected by this instrument and was consulted during its drafting. Notably, 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 Act 1997 (FMA Act) provides for the establishment of agreements regarding "net appropriations," as detailed in section 31. These agreements allow the Minister for Finance and Administration to collaborate with other Ministers to enhance specific appropriation items within the Appropriation Acts that are marked as "net appropriations." This is achieved by adding the amounts received by an agency, as specified in the agreement (section 31(1) and (2)). The agreements can span any duration, not necessarily tied to a specific Appropriation Act or financial year, and generally continue until circumstances necessitate renewal (section 31(3)). The Minister for Finance and Administration retains the authority to cancel or amend these agreements at any time, without needing consent from the other party (section 31(4)). The obligations imposed by the FMA Act on parties involved in these agreements are primarily administrative and procedural. The Minister for Finance and Administration must ensure that any increase in appropriation items is accurately reflected in the annual Appropriation Acts, which incorporate the terms of the net appropriation agreements. This includes specifying the types of receipts that qualify for increasing an appropriation, as stipulated in the agreement (section 31(1)). Additionally, the agency affected by the agreement must adhere to the financial management practices outlined in the FMA Act, ensuring that any increased appropriations are used in accordance with legislative requirements and intended purposes. Breaches of the obligations under the FMA Act may not directly result in criminal or civil penalties within the FMA Act itself. However, any misuse of funds or mismanagement that results from not adhering to the requirements of the net appropriation agreements could potentially lead to disciplinary actions against public officials, as well as civil or criminal liability under other relevant legislation. The consequences for non-compliance could include financial penalties, restitution, or other corrective measures, depending on the nature and severity of the breach. The explanatory statement notes that agreements made under section 31 of the FMA Act are exempt from the parliamentary disallowance and sunsetting provisions outlined in the Legislative Instruments Act 2003. This exemption means that these agreements do not require parliamentary approval to come into effect and are not subject to automatic expiry unless specifically addressed by the Act (subsections 44(2)(19) and 54(2)(17) of the Legislative Instruments Act 2003). This streamlined process ensures that the financial management and appropriation processes can be efficiently managed without unnecessary delays.