EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Administration
Financial Management and Accountability Act 1997
Determination 2004/20 to establish a Special Account
The attached instrument makes a determination under subsection 20 (1) of the Financial Management and Accountability Act 1997 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, the Special Account.
Special Accounts Generally
Under the Constitution, all revenues or moneys raised or received by the Executive Government of the Commonwealth form one Consolidated Revenue Fund (CRF) and may not be applied otherwise than in accordance with an appropriation by the Parliament for the purposes of the Commonwealth. Special Accounts allow amounts from the CRF to be set aside (hypothecated) for a particular purpose and expended for that purpose.
The Finance Minister must cause a copy of a determination relating to a Special Account to be tabled in each House of Parliament. Either House may disallow a determination within 5 sitting days of having been tabled. If the determination is not disallowed, it comes into effect the calendar day after the last day on which it could have been disallowed.
The notes to the determination identify legislation and other laws that allow or require amounts to be credited to, or debited from, the Special Account.
Media Commissions Special Account
The determination establishes the Media Commissions Special Account.
This determination is required in order to establish a new Special Account, which gives effect to amendments that were required to the existing Media Commissions Account for the activities related to the processing of media commissions through the central advertising system to the advertising and related agencies.
The Special Account records amounts until such time as payments are made for advertising and related agencies. The Special Account purposes also include any activities that are incidental, both direct and indirect, to activities performed by media, advertising and related agencies.
The existing Media Commissions Account required several amendments which are addressed by the establishment of this new Media Commissions Special Account. The new Special Account introduces a capacity to make repayments to the original contributors, and a capacity to return excess amounts to the Budget (that is, reduce the balance of the Special Account without a real or notional payment). This Media Commissions Special Account also has a clarified clause specifying the amounts that may be credited to the Special Account.
The purposes of the existing Media Commissions Account are to be amended by another determination Financial Management and Accountability Determination 2004/19 – Media Commissions Account Variation and Abolition 2004, to allow amounts to be debited from the Media Commissions Account and be credited to the Media Commissions Special Account. The Financial Management and Accountability Determination 2004/19 – Media Commissions Account Variation and Abolition 2004 also abolishes the Media Commissions Account subject to the balance reaching zero and the variation taking effect.
Estimates of transactions on the Special Account
| Opening Balance 2005-06 2004-05 $’000 | Credits 2005-06 2004-05(1) $’000 | Debits 2005-06 2004-05 $’000 | Closing Balance 2005-06 2004-05 $’000 |
Media Commissions Special Account | 13,329 | 2,450 | 3,600 | 12,179 |
0 | 16,929 | 3,600 | 13,329 |
1. Includes balance debited from the Media Commissions Account and credited to the Media Commissions Special Account.
Overview
The Financial Management and Accountability Act 1997 was enacted to ensure proper financial management and accountability within the Commonwealth government. The Act was introduced to address the need for clear financial management frameworks and accountability mechanisms, ensuring that public funds are managed responsibly and transparently. Under this Act, the Parliament, through the Minister for Finance and Administration, has the authority to establish Special Accounts. This allows for the segregation of funds for specific purposes, enhancing transparency and control over public spending. The 2004 determination under this Act established the Media Commissions Special Account to address specific requirements related to media commission activities. This Special Account facilitates the recording and management of funds related to media commissions until payments are made to advertising and related agencies, and includes activities that are incidental to these operations. The establishment of this account aims to streamline financial processes and ensure accurate accounting for media-related expenditures.
Scope and Application
The Financial Management and Accountability Act 1997 Determination 2004/20 establishes the Media Commissions Special Account to manage funds relating to media commissions, ensuring these are set aside for specific purposes in accordance with the Act. The determination applies to the Executive Government of the Commonwealth and specifies that amounts may be credited to and debited from this account for activities directly or indirectly related to media commissions. This includes processing payments to advertising and related agencies and managing any repayments or returns of excess funds to the Budget. The Act ensures that all financial activities are in compliance with parliamentary appropriations, and the Minister for Finance and Administration is required to table the determination in each House of Parliament, with an option for disallowance within a specified period. Subordinate instruments, such as the Financial Management and Accountability Determination 2004/19, further detail the variation and eventual abolition of the existing Media Commissions Account, facilitating a smooth transition to the new Special Account.
Key Provisions
The Financial Management and Accountability Act 1997 (FMA Act) sets out the framework for financial management within the Commonwealth. Under this Act, the Minister for Finance and Administration has the authority to establish Special Accounts through a determination, as outlined in subsection 20(1). The 2004/20 determination establishes a Media Commissions Special Account, detailing the nature of transactions it permits (subsection 20(1)). This new account is designed to handle the specific financial activities associated with media commissions, ensuring that funds are set aside for this purpose until they are needed for payments related to advertising and related agencies.
The establishment of the Media Commissions Special Account (section 4) entails specific obligations and requirements for the entities involved. The account records amounts from the Consolidated Revenue Fund (CRF) until such time as payments are made to advertising and related agencies. The Special Account is also intended to cover activities that are incidental to those performed by media, advertising, and related agencies. The Finance Minister is mandated to table a copy of the determination in each House of Parliament, allowing for scrutiny and potential disallowance by either House within 5 sitting days (section 20(2)). If not disallowed, the determination comes into effect the day after the disallowance period ends.
Breaches or non-compliance with the provisions outlined in the determination could have serious consequences. While the determination itself does not specify penalties, general provisions within the FMA Act and related legislative instruments could apply. For instance, unauthorised transactions or mismanagement of funds could lead to civil or criminal liability under the FMA Act or other relevant legislation. Penalties for breaches may include fines or other financial penalties as prescribed by the applicable laws, depending on the severity and nature of the breach. The establishment of the Special Account is intended to ensure transparency and accountability in the management of these specific funds.