Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted to ensure the proper management and accountability of Commonwealth financial resources. The FMA Act addresses the need for the effective and transparent use of public funds by setting out requirements for the financial management of the Commonwealth. Determination 2005/21, issued by the Minister for Finance and Administration, was introduced to establish a Special Account, specifically the Other Trust Moneys - Insolvency and Trustee Service Australia Special Account. This account is intended to allow the Insolvency and Trustee Service Australia to temporarily hold funds on behalf of persons or entities that are not subject to the FMA Act. The creation of this Special Account is essential for the agency to manage small amounts of miscellaneous moneys, such as moneys found by Commonwealth officials or payments received from Comcare for workers' compensation. The determination outlines the nature of the amounts that may be credited to and debited from the account, ensuring that these transactions align with the financial management principles established by the FMA Act. The determination process requires the Finance Minister to table a copy in each House of Parliament, with the option for disallowance within five sitting days of tabling. If not disallowed, the determination comes into effect on the day after the last day for disallowance.

Scope and Application

The Financial Management and Accountability Act 1997 Determination 2005/21, issued under subsection 20(1) of the Act, establishes a Special Account named the Other Trust Moneys - Insolvency and Trustee Service Australia Special Account. This determination outlines the permissible amounts that can be credited to and debited from the account, and specifies the purposes for which these transactions can occur. The Act applies to the Insolvency and Trustee Service Australia, allowing it to temporarily hold funds on behalf of individuals or entities not governed by the FMA Act. This special account is part of the Consolidated Revenue Fund, and its establishment is supported by an appropriation under section 20 of the FMA Act, enabling specified amounts to be expended for a particular purpose. The Finance Minister is required to table a copy of this determination in each House of Parliament, with either House having the ability to disallow it within five sitting days of tabling. If not disallowed, the determination takes effect on the day following the last possible day for disallowance. The determination also specifies the purposes for which the Special Account can be debited, with primary expenditures outlined in clause 6(a) and additional allowances in clause 6(b) to simplify accounting transactions. The creation of this Special Account is necessary for the Insolvency and Trustee Service Australia, established after the commencement of the FMA Act on 1 January 1998, to temporarily hold funds on behalf of those not subject to the FMA Act. The account is designed to accommodate small amounts of miscellaneous moneys, such as funds found by Commonwealth officials or payments from Comcare related to workers' compensation. This determination ensures that if the Insolvency and Trustee Service Australia changes its name, the Special Account will remain with the successor agency, preserving the funds within the relevant agency. The agency was consulted during the drafting process and agreed with the form of the instrument, and no community consultation was undertaken as the instrument pertains solely to machinery of government purposes.

Key Provisions

The key operative sections of Determination 2005/21 (F2005L02306) under the Financial Management and Accountability Act 1997 (FMA Act) are concerned with the establishment of the Other Trust Moneys - Insolvency and Trustee Service Australia Special Account. This Special Account is designated for the temporary holding of funds on behalf of entities not subject to the FMA Act. Clause 6 of the determination specifies the purposes for which the Special Account can be debited. Clause 6(a) outlines the primary purpose for expenditure, while clause 6(b) allows for debiting in a manner consistent with section 28 of the FMA Act to simplify accounting. The determination also notes that if the Insolvency and Trustee Service Australia changes its name, the Special Account will be retained by the successor agency to ensure continuity in fund management. The obligations imposed by this determination on the Insolvency and Trustee Service Australia include the requirement to hold specified amounts in the Special Account for particular purposes, such as holding moneys found by Commonwealth officials or amounts received from Comcare for workers’ compensation payments. The agency must ensure that these funds are managed in accordance with the terms set out in the determination. Furthermore, the Finance Minister is obligated to table a copy of the determination in each House of Parliament, and the Insolvency and Trustee Service Australia must have been consulted on the draft instrument before its finalisation. If the determination is not disallowed within five sitting days of tabling, it comes into effect on the calendar day after the last day on which it could have been disallowed. In the event of a breach of the terms specified in the determination, the consequences can be both civil and criminal, depending on the nature and severity of the breach. While the determination itself does not specify maximum penalties, breaches of the FMA Act can lead to significant penalties under Australian law. Civil penalties may include fines up to a maximum of $19,950 for individuals and $99,750 for corporations, depending on the specific breach and relevant sections of the FMA Act. Criminal penalties can also be imposed, including imprisonment and fines, depending on the seriousness of the offence. These penalties underscore the importance of compliance with the provisions set out in the determination and the broader framework of the FMA Act.