EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Financial Management and Accountability (Abolition of 24 Special Accounts) Determination 2012/02
Purpose of the Determinations
The determination is made under subsection 20(3) of the Financial Management and Accountability Act 1997 (FMA Act) and abolishes 24 Special Accounts.
Special Accounts generally
In accordance with the Constitution, all revenues or moneys raised or received by the Government of the Commonwealth form one Consolidated Revenue Fund (CRF) and may not be spent unless under an appropriation by the Parliament for the purposes of the Commonwealth. A Special Account may be established by a determination that sets out the amounts that may be credited and the purposes for which it may be debited. Special Accounts established by determination are supported by an appropriation under section 20 of the FMA Act. In effect, Special Accounts allow amounts from the CRF to be spent on the purposes specified in the determination.
Determinations that establish Special Accounts under subsection 20(1) of the FMA Act or vary Special Accounts under subsection 20(2) of the FMA Act are subject to the tabling and disallowance procedures in section 22 of the FMA Act. Section 22 of the FMA Act requires the Finance Minister to table a copy of the determination in each House of the Parliament. Either House may pass a resolution disallowing a determination within five sitting days of tabling. If the determination is not disallowed, it comes into effect on the day immediately after the last day on which it could have been disallowed.
Subsection 20(6) of the FMA Act exempts determinations that establish Special Accounts under subsection 20(1) of the FMA Act or vary Special Accounts under subsection 20(2) of the FMA Act from the operation of Part 6 (sunsetting) of the Legislative Instruments Act 2003.
Subsection 20(7) of the FMA Act exempts determinations that abolish Special Accounts under subsection 20(3) of the FMA Act from the operation of section 42 (disallowance) and Part 6 (sunsetting) of the Legislative Instruments Act 2003.
A Statement of Compatibility with Human Rights is not required for this legislative instrument. Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires a Statement of Compatibility with Human Rights for all legislative instruments subject to disallowance under section 42 of the Legislative Instruments Act 2003. While legislative instruments made or varied under subsections 20(1) or 20(2) of the FMA Act are subject to disallowance under section 22 of the FMA Act they are not subject to disallowance under section 42 of the Legislative Instruments Act 2003. Legislative instruments made under subsection 20(3) of the FMA Act are exempt from disallowance under subsection 20(7) of the FMA Act, as such a Statement of Compatibility with Human Rights is not required.
Operation of this Determination
The determination abolishes 24 Special Accounts which are no longer required. Twenty-one of these Special Accounts are standard purpose accounts named Other Trust Moneys Accounts (OTMs). The remaining three Special Accounts are a specific purpose accounts managed by the National Archives of Australia, the Office of Australian Accounting Standards Board and the Office of Auditing and Assurance Standards Board respectively.
The Special Accounts are abolished when the balance of the appropriation reaches zero or by 30 June 2012 as specified in Schedule 1 and 30 June 2013 as specified in Schedule 2. The Special Accounts are redundant to requirements.
Consultation
The Agencies affected by the determination were given an opportunity to comment on the instrument. As the instrument is for internal machinery of government purposes only, no consultation was necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).
There is no expected fiscal or underlying cash impact.
Overview
The Financial Management and Accountability (Abolition of 24 Special Accounts) Determination 2012/02, enacted under the authority of the Minister for Finance and Deregulation, serves to abolish 24 Special Accounts established under the Financial Management and Accountability Act 1997 (FMA Act). The purpose of this determination is to streamline and rationalise the financial management of the Commonwealth by eliminating redundant Special Accounts. Special Accounts, which are supported by appropriations under section 20 of the FMA Act, allow for the expenditure of funds from the Consolidated Revenue Fund for specific purposes. However, these 24 accounts have become obsolete due to changes in operational requirements or because their balances have reached zero. The abolition of these accounts ensures that the financial management practices remain efficient and aligned with current needs. This determination was made under subsection 20(3) of the FMA Act and follows the legislative processes outlined within the Act, including the requirement to table the determination in each House of the Parliament, without necessitating a Statement of Compatibility with Human Rights as it is exempt from certain disallowance provisions.
Scope and Application
The Financial Management and Accountability (Abolition of 24 Special Accounts) Determination 2012/02, made under the Financial Management and Accountability Act 1997, abolishes 24 Special Accounts which have become redundant. The Act applies to entities within the Commonwealth Government that require special appropriations to manage specific funds or purposes, and the abolition of these Special Accounts affects the manner in which certain funds are managed within the Consolidated Revenue Fund. The determination applies to the Commonwealth jurisdiction and impacts specific government agencies and entities that previously managed these Special Accounts. Notably, the Special Accounts being abolished include twenty-one Other Trust Moneys Accounts and three specific purpose accounts managed by the National Archives of Australia, the Office of Australian Accounting Standards Board, and the Office of Auditing and Assurance Standards Board. The abolition of these accounts occurs when the balance of the appropriation reaches zero or by specified dates in 2012 and 2013, as detailed in the schedules of the Determination. The Act does not require a Statement of Compatibility with Human Rights as the legislative instrument is exempt from certain disallowance provisions under the Legislative Instruments Act 2003.
Key Provisions
The main operative sections of this Determination (sections 2 and 3) specify the 24 Special Accounts to be abolished and outline the timeline for their abolition. Section 2 identifies the 24 Special Accounts, including 21 Other Trust Moneys Accounts (OTMs) and three specific purpose accounts managed by the National Archives of Australia, the Office of Australian Accounting Standards Board, and the Office of Auditing and Assurance Standards Board. Section 3 details the conditions under which these accounts will be abolished, either when the balance of the appropriation reaches zero or by specified dates: 30 June 2012 for some accounts and 30 June 2013 for others, as outlined in Schedules 1 and 2.
The Determination imposes obligations on the relevant agencies to cease any transactions in these Special Accounts upon their abolition. The agencies must ensure that any outstanding balances are appropriately managed and transferred in accordance with the Financial Management and Accountability Act 1997 (FMA Act). Furthermore, it requires the Finance Minister to table a copy of the determination in each House of the Parliament, allowing for a five-sitting-day period for disallowance by either House, as specified in section 22 of the FMA Act. Should the determination not be disallowed within this period, it comes into effect on the day immediately after the last day on which it could have been disallowed.
The Determination does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches. However, any failure to comply with the requirements of the FMA Act, including the abolition of these Special Accounts as specified, could potentially lead to administrative or legal repercussions. Given the nature of financial management and accountability legislation, non-compliance could result in disciplinary action against relevant officers or agencies, as well as possible financial audits and inquiries by the relevant parliamentary committees. The precise penalties would depend on the nature and severity of the non-compliance, as governed by other provisions of the FMA Act and associated regulations.