EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Administration
Financial Management and Accountability Act 1997
Determination 2002/04 establishing a Special Account under section 20
The attached Instrument makes a determination under subsection 20(1) of the Financial Management and Accountability Act 1997 (the Act) to establish a Special Account. It also specifies the nature of amounts which may be credited to, and the purposes for which amounts may be debited from, each account.
Special Accounts Generally
Under the Constitution, revenues or moneys received by the Executive Government of the Commonwealth form the Consolidated Revenue Fund (CRF) and may not be
spent except under a valid appropriation. Special Accounts allow money in the CRF to be set aside (hypothecated) for a particular purpose and expended for that purpose without the need for a further specific appropriation.
In effect, a determination establishing and/or allowing or requiring an amount to be credited to a Special Account makes a new appropriation for that amount. This is achieved via a standing appropriation (in subsection 20(4) of the Act) for the purposes of each Special Account, up to the balance of each Special Account.
Determinations relating to Special Accounts must be tabled in each House of Parliament by the Finance Minister. They may be disallowed by either House within 5 sitting days after they are tabled. If they are not disallowed, they come into effect the day after the last day on which they could have been disallowed.
The PSS Special Account
The determination establishes the PSS Special Account, to be administered by the PSS
Board.
The purpose of the Account is to provide for the expenditure of monies related to the administration of the PSS Scheme by the PSS Board, the performance of any other function conferred on the PSS Board under legislation, and the management and investment of the PSS Fund by the PSS Board, where a corresponding amount has been or is to be credited to the Account from the PSS Fund in respect of such expenditure.
Any monetary contributions appropriated from the CRF, or received by ComSuper as revenue relating to the PSS Scheme or in relation to the administration by the PSS Board of the PSS Scheme, or amounts paid from the PSS Fund in relation to expenditure incurred by the PSS Board on the management or investment of the PSS Fund and is to be met from the Account may be credited to the Account.
Overview
The Financial Management and Accountability Act 1997 was enacted by the Commonwealth Parliament to address the need for effective financial management and accountability in the administration of government funds. One mechanism introduced by the Act is the establishment of Special Accounts, which allow for the setting aside of moneys from the Consolidated Revenue Fund for specific purposes, thereby streamlining the appropriation process. The Act provides a framework for the creation of these Special Accounts through determinations made by the Minister for Finance and Administration, subject to disallowance by either House of Parliament. The 2002/04 Determination under section 20 of the Act establishes the PSS Special Account, administered by the PSS Board, to facilitate the administration of the PSS Scheme, the performance of functions under legislation, and the management and investment of the PSS Fund. This ensures that monies related to these activities can be credited to and debited from the Account for their intended purposes without the need for additional appropriations.
Scope and Application
The Financial Management and Accountability Act 1997 applies to the establishment and management of Special Accounts within the Commonwealth of Australia. The Act provides the framework for setting aside money within the Consolidated Revenue Fund for specific purposes, allowing for expenditures without the need for a separate appropriation for each transaction. The establishment of a Special Account, such as the PSS Special Account mentioned in the attached Instrument, is facilitated by a determination made under the Act and is subject to parliamentary oversight through disallowance processes. The PSS Special Account, administered by the PSS Board, is specifically intended for expenditures related to the administration of the PSS Scheme, the performance of functions conferred upon the PSS Board, and the management and investment of the PSS Fund. The Act outlines the nature of the transactions that can be credited to and debited from the Account, ensuring that any contributions or revenues related to the PSS Scheme, as well as payments from the PSS Fund, are appropriately accounted for within this Special Account.
Key Provisions
The Financial Management and Accountability Act 1997 (the Act), as supplemented by the attached Instrument, establishes a Special Account known as the PSS Special Account through a determination under section 20(1) of the Act. This determination outlines the nature of amounts that may be credited to, and debited from, the Account (subsection 20(4)). The Special Account is intended to set aside funds in the Consolidated Revenue Fund (CRF) for specific purposes without requiring further appropriation. Contributions to the Account can include monetary appropriations from the CRF, revenue received by ComSuper in relation to the PSS Scheme, or payments from the PSS Fund for the management and investment of the PSS Fund by the PSS Board.
The obligations under this Act require that the PSS Board, which administers the PSS Special Account, ensures that all funds within the Account are used strictly for the purposes outlined in the determination. These purposes include the administration of the PSS Scheme, the performance of functions conferred on the PSS Board, and the management and investment of the PSS Fund. Any funds credited to the Account must correspond to these activities, and any debits from the Account must be justified by these purposes. The Finance Minister is responsible for tabling these determinations in each House of Parliament, and they may be disallowed by either House within five sitting days after tabling.
Failure to adhere to the provisions of this Act can result in civil or criminal consequences, depending on the nature and severity of the breach. While the Act does not explicitly state maximum penalties for breaches, it is understood that non-compliance may lead to financial penalties or other legal actions. The seriousness of the consequences will depend on the extent to which the Act has been contravened and the impact of such contravention on the administration and integrity of the Special Account and related funds. It is imperative for the PSS Board to ensure strict compliance with the Act to avoid any legal repercussions.