EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Administration
Financial Management and Accountability Act 1997
Determination 2005/12 to establish a Special Account
Purposes of Determination 2005/12
The attached instrument makes a determination under subsection 20 (1) of the Financial Management and Accountability Act 1997 (FMA Act) to establish a Special Account entitled Other Trust Moneys - Department of Human Services Special Account. It also specifies the nature of amounts that may be credited to, and the purposes for which amounts may be debited from, the Other Trust Moneys - Department of Human Services Special Account.
Special Accounts Generally
In accordance with 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 used unless in accordance with an appropriation by the Parliament for the purposes of the Commonwealth. This determination establishes a Special Account, and sets out the amounts that may be credited to the Account 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 specified amounts from the CRF to be expended for a particular specified purpose.
The Finance Minister must table a copy of a determination relating to a Special Account in each House of Parliament. Either House may disallow a determination within five sitting days of tabling. If the determination is not disallowed, it comes into effect on the calendar day after the last day on which it could have been disallowed. Regulation 10 of the Legislative Instruments Regulations 2004 preserves the disallowance provisions under section 22 of the FMA Act by exempting Special Account determinations from subsections 57(2) and 57(5) of the Legislative Instruments Act 2003.
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.
Operation of the Determination 2005/12
Purpose of the Other Trust Moneys - Department of Human Services Special Account
The determination is required in order to establish a Special Account, to enable the Department of Human Services to temporarily hold amounts on behalf of persons or entities that are not subject to the FMA Act.
At the commencement of the FMA Act on 1 January 1998 a determination of the Finance Minister created Other Trust Moneys Special Accounts for all agencies that existed at that time. The Department of Human Services was created after 1 January 1998 and therefore requires its own Other Trust Moneys Special Account.
Other Trust Moneys Special Accounts provide agencies with an ability to hold amounts on behalf of others and the appropriation to expend these amounts. Typically these amounts are used to accommodate small amounts of miscellaneous moneys that the agency is holding on behalf others. For example the Other Trust Moneys Account may be used to provide an appropriation to allow moneys found by Commonwealth officials to be paid to their rightful owner once the owner has been identified. It may also be used to hold amounts received from Comcare in relation to employees entitled to receive workers’ compensation payments.
Up until this time the Department of Human Services has not identified amounts that it required to hold in an Other Trust Moneys Special Account.
Should the Department of Human Services change its name, due to a change in legislation or for some other reason, it is intended that the Special Account be retained by the successor agency. This will enable the amounts in the Special Account at that time to remain with the relevant agency.
Clause 6 specifies the purposes for which a Special Account can be debited.
- Paragraph 6(a) describes the primary purpose for expenditure of amounts from the Special Account.
- Paragraph 6(b) allows the Special Account to be debited, in a manner that would otherwise be permitted by section 28 of the FMA Act. It is included to simplify accounting for these transactions.
Consultation
The Department of Human Services is the agency affected by this instrument. The agency was provided with drafts of the instrument before it was finalised and agree with the form of the instrument. No community consultation was carried out as the instrument is for machinery of government purposes only (see sections 17 and 18 of the Legislative Instruments Act 2003).
Estimates of transactions on the Other Trust Moneys - Department of Human Services Special Account
| Opening Balance 2005-06 2004-05 $’000 | Credits 2005-06 2004-05 $’000 | Debits 2005-06 2004-05 $’000 | Closing Balance 2005-06 2004-05 $’000 |
Other Trust Moneys - Department of Human Services Special Account | 60 | 1,674 | 1,656 | 78 |
0 | 1,866 | 1,806 | 60 |
Overview
The Financial Management and Accountability Act 1997 (FMA Act) was enacted to provide a framework for the financial management of Commonwealth agencies, ensuring accountability and transparency in the use of public funds. The Act was introduced to address the need for a cohesive and structured approach to managing the finances of the Commonwealth government. Determination 2005/12, issued by the authority of the Minister for Finance and Administration, establishes a Special Account known as the Other Trust Moneys - Department of Human Services Special Account. This determination was made under subsection 20(1) of the FMA Act and serves to specify the nature of the amounts that may be credited to and debited from this account. The purpose of this Special Account is to allow the Department of Human Services to temporarily hold funds on behalf of entities not subject to the FMA Act, such as miscellaneous moneys found by Commonwealth officials or amounts received from Comcare for workers’ compensation payments. This instrument facilitates the management of these funds in accordance with parliamentary appropriations and aims to simplify accounting transactions as outlined in section 28 of the FMA Act.
Scope and Application
The Financial Management and Accountability Act 1997 Determination 2005/12 pertains to the establishment of a Special Account, specifically the Other Trust Moneys - Department of Human Services Special Account, within the framework of the Financial Management and Accountability Act 1997 (FMA Act). This determination allows the Department of Human Services to temporarily hold funds on behalf of individuals or entities not governed by the FMA Act. The Special Account is established to facilitate the holding and expenditure of specified amounts, primarily small sums of money held for others, such as found moneys or payments from Comcare for workers’ compensation. The determination outlines the allowable credits and debits to the account, with credits permitted under the terms of the FMA Act and debits for specified purposes, including those allowed under section 28 of the FMA Act. The account is subject to appropriation and parliamentary disallowance provisions, and its establishment ensures that the funds remain with the relevant agency should the Department of Human Services change its name or structure.
The determination applies specifically to the Department of Human Services, established post the commencement of the FMA Act on 1 January 1998. The account is intended to remain with the successor agency in the event of a departmental name change, ensuring continuity in the management of these funds. The determination is subject to disallowance by either House of Parliament within five sitting days of tabling, after which it comes into effect if not disallowed. The establishment of this Special Account provides a clear framework for the temporary holding and expenditure of specific funds, ensuring compliance with the financial management requirements of the Commonwealth.
Key Provisions
The main operative sections of Determination 2005/12 under the Financial Management and Accountability Act 1997 (FMA Act) pertain to the establishment and operation of the Other Trust Moneys - Department of Human Services Special Account (section 2). This Special Account is intended to allow the Department of Human Services to temporarily hold moneys on behalf of persons or entities not subject to the FMA Act. The determination specifies the types of amounts that can be credited to and debited from this account. Clause 6 outlines the primary purposes for which the account can be debited, including the reimbursement of expenses and payments to rightful owners of found moneys (section 6(a)), and other debits that would otherwise be permitted under section 28 of the FMA Act (section 6(b)).
The obligations imposed by this determination on the Department of Human Services include the establishment of the Other Trust Moneys Special Account for the temporary holding of specified funds and the adherence to the outlined purposes for debiting the account. The Department must ensure that all transactions involving the account comply with the provisions of the FMA Act and the determination itself. The account must be used strictly for the purposes specified, and any deviation would require further legislative amendments or determinations. Additionally, the determination mandates that the account be retained by the successor agency if the Department of Human Services changes its name, ensuring continuity in the handling of these trust monies.
Any breach of the provisions outlined in this determination could result in civil or criminal consequences. While the determination does not explicitly state penalties, breaches of the FMA Act in general could lead to penalties under section 32, which includes fines and imprisonment. The specific penalties would depend on the nature and severity of the breach, but they could include fines of up to $21,000 for individuals and $105,000 for corporations, along with potential imprisonment terms. These penalties reflect the importance of adhering to financial management and accountability regulations to maintain public trust and fiscal integrity.
In summary, Determination 2005/12 establishes a Special Account for the Department of Human Services to manage trust monies temporarily. The determination sets out the permissible transactions for this account and mandates compliance with the FMA Act. Breaches of these provisions could lead to significant civil and criminal penalties, underscoring the importance of adhering to the financial management framework established by the FMA Act.