EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Administration
Financial Management and Accountability Act 1997
Determination 2007/01 to establish a Special Account
Purposes of Determination 2007/01
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 - Office of the Australian Building and Construction Commissioner 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 - Office of the Australian Building and Construction Commissioner Special Account.
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 is 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 a purpose specified in the determination.
Determinations that establish Special Accounts, or vary determinations that establish Special Accounts, are subject to section 22 of the FMA Act. Section 22 of the FMA Act requires the Finance Minister to table a copy of the establishing or varying determination 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.
Special Accounts can be abolished by a determination of the Finance Minister. However, there is no requirement to table the determination to abolish a Special Account.
Operation of the Determination 2007/01
Purpose of the Other Trust Moneys - Office of the Australian Building and Construction Commissioner Special Account
The determination is required in order to establish a Special Account, to enable the Office of the Australian Building and Construction Commissioner to temporarily hold amounts on behalf of persons or entities other than the Commonwealth.
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 Other Trust Moneys Special Accounts are used to accommodate small amounts of miscellaneous moneys. For example, the Other Trust Moneys Special 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. In limited circumstances it may also be used to hold amounts received from Comcare in relation to employees entitled to receive workers’ compensation payments.
At the commencement of the FMA Act on 1 January 1998, a determination signed by the Minister for Finance and Administration created Other Trust Moneys Special Accounts for all agencies that existed at that time. The Office of the Australian Building and Construction Commissioner was created on 1 July 2006 and has identified amounts that will be required to be held in an Other Trust Moneys Special Account.
Should the Office of the Australian Building and Construction Commissioner 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 5 specifies the purposes for which a Special Account can be debited.
- Paragraph 5(a) describes the primary purpose for expenditure of amounts from the Special Account.
- Paragraph 5(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 Office of the Australian Building and Construction Commissioner is the agency affected by this instrument. The agency was provided with drafts of the instrument and agrees with the form of the instrument. As the instrument is for internal machinery of government purposes only, no consultation was considered necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).
Estimates of transactions on the Other Trust Moneys - Office of the Australian Building and Construction Commissioner Special Account
| Opening Balance 2007-08 2006-07 $’000 | Credits 2007-08 2006-07 $’000 | Debits 2007-08 2006-07 $’000 | Closing Balance 2007-08 2006-07 $’000 |
Other Trust Moneys - Office of the Australian Building and Construction Commissioner Special Account | 0 | 1 | 1 | 0 |
0 | 1 | 1 | 0 |
Overview
The Financial Management and Accountability Act 1997, as amended by Determination 2007/01, introduces a Special Account named "Other Trust Moneys - Office of the Australian Building and Construction Commissioner Special Account". This determination was enacted by the Minister for Finance and Administration under subsection 20(1) of the FMA Act to facilitate the Office of the Australian Building and Construction Commissioner in temporarily holding and managing funds on behalf of entities other than the Commonwealth. This Special Account is part of the broader financial management framework in Australia, which requires all Commonwealth revenues to be directed into the Consolidated Revenue Fund and mandates that spending must be authorised by Parliament. The primary objective of this determination is to provide a specific appropriation for the Office of the Australian Building and Construction Commissioner to manage miscellaneous funds, including those found by Commonwealth officials or received from Comcare for workers’ compensation payments. This arrangement ensures that the Office can operate effectively in its mandate while adhering to the stringent financial oversight provided by the FMA Act.
The establishment of this Special Account is crucial for the operational needs of the Office of the Australian Building and Construction Commissioner, which was established on 1 July 2006. The account not only facilitates the management of small sums of money but also ensures that these funds remain with the relevant agency should the Office undergo any changes in its name or structure. This continuity is essential for maintaining the integrity and continuity of financial management practices within the Office. The determination specifies that the account can be debited for primary purposes outlined in clause 5, including expenditures that would otherwise be permitted under section 28 of the FMA Act, thereby simplifying the accounting processes for these transactions. The determination was developed in consultation with the Office of the Australian Building and Construction Commissioner, which has endorsed the form and content of the instrument. Given its internal focus, no further consultation was deemed necessary under the provisions of the Legislative Instruments Act 2003.
Scope and Application
The Financial Management and Accountability Act 1997 Determination 2007/01, issued under the authority of the Minister for Finance and Administration, establishes a Special Account specifically for the Office of the Australian Building and Construction Commissioner. This account, entitled Other Trust Moneys - Office of the Australian Building and Construction Commissioner Special Account, is intended to enable the Office to temporarily hold funds on behalf of individuals or entities other than the Commonwealth. The establishment of this Special Account is supported by an appropriation under the Financial Management and Accountability Act 1997, and it is designed to facilitate the handling of miscellaneous moneys, such as those found by Commonwealth officials or those related to workers’ compensation payments. The determination specifies the types of transactions permissible under the account, including the primary purposes for debiting the account and any additional allowances permitted by section 28 of the FMA Act. This account is a part of the Consolidated Revenue Fund and its operation is subject to disallowance by either House of Parliament if deemed necessary. Should the Office change its name, the Special Account is intended to remain with the successor agency to maintain continuity of the funds held.
Key Provisions
The Financial Management and Accountability Act 1997 (FMA Act) provides a framework for the financial management of the Commonwealth, including the establishment of Special Accounts to manage funds for specific purposes. Determination 2007/01, issued under subsection 20(1) of the FMA Act, establishes a Special Account called the Other Trust Moneys - Office of the Australian Building and Construction Commissioner Special Account. This account is intended to enable the Office of the Australian Building and Construction Commissioner (OABCC) to temporarily hold funds on behalf of entities other than the Commonwealth. These funds may include small amounts of miscellaneous moneys, such as moneys found by Commonwealth officials that need to be returned to their rightful owners, or in some cases, amounts received from Comcare for workers' compensation payments.
The determination outlines the specific purposes for which the Special Account may be credited and debited. According to clause 5 of the determination, the primary purpose for which the account may be debited is as specified in paragraph 5(a), while paragraph 5(b) allows for debits in a manner consistent with section 28 of the FMA Act to simplify accounting. The establishment of this Special Account is supported by an appropriation under section 20 of the FMA Act and requires the Finance Minister to table a copy of the determination in each House of Parliament. If the determination is not disallowed within five sitting days, it comes into effect on the day after the last day on which it could have been disallowed.
The obligations imposed by this determination on the OABCC include the requirement to hold specified funds in the Special Account and to ensure that any debits from the account are for the purposes specified in the determination. The OABCC must also comply with any additional financial management requirements set out in the FMA Act and other relevant legislation. Furthermore, the OABCC is responsible for maintaining accurate records of all transactions involving the Special Account to ensure transparency and accountability.
Failure to comply with the provisions of the determination or the FMA Act may result in civil or criminal penalties. Under section 40 of the FMA Act, an officer who knowingly or recklessly authorises or permits a contravention of the Act is liable to a penalty. The maximum penalty for an individual is generally 50 penalty units ($5,500 as of 2023), and for a corporation, the penalty is up to 500 penalty units ($55,000). Additionally, the determination itself may be subject to disallowance by either House of Parliament within the specified timeframe, which could render the account invalid if not upheld.