EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Administration
Financial Management and Accountability Act 1997
Determination 2007/08 to establish a Special Account
Purposes of Determination 2007/08
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 Services for Other Entities and Trust Moneys – Australian Pesticides and Veterinary Medicines Authority 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 Services for Other Entities and Trust Moneys – Australian Pesticides and Veterinary Medicines Authority 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 Special Account.
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. The Determination may prescribe a later date upon which the Special Account can be relied upon.
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 2007/08
Purpose of the Services for Other Entities and Trust Moneys – Australian Pesticides and Veterinary Medicines Authority Special Account
Many agencies under the FMA Act have a Determination creating an Other Trust Moneys Special Account (OTM) and a Services for other Government and Non-agency Bodies Special Account (SOG). This Determination combines those two separate Special Accounts as part of the simplification of the financial framework and will cover the Australian Pesticides and Veterinary Medicines Authority from the time it is prescribed in Part 1 of Schedule 1 of the Financial Management and Accountability Regulations 1997.
Clause 5 specifies the purposes for which a Special Account can be debited.
- Paragraph 5 (a) and (b) describe the primary purposes for expenditure of amounts from the Special Account.
- Paragraph 5 (c) allows the Special Account to the 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.
The agency affected by this determination is being established under the FMA Act to implement recommendations arising from a Uhrig assessment of the agency. The Australian Pesticides and Veterinary Medicines Authority has identified amounts that will be required to be held in a Services for Other Entities and Trust Moneys Special Account.
The Services for Other Entities and Trust Moneys Special Account provides the agency with an ability to hold amounts on behalf of others and the appropriation to expend these amounts. Typically the Services for Other Entities and Trust Moneys Special Account will be used to accommodate small amounts of miscellaneous moneys. For example, the Services for Other Entities and 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. It may also be used to hold amounts received from Comcare in relation to employees entitled to receive workers’ compensation payments.
Additionally the Services for Other Entities and Trust Moneys Special Account provides the agency with an ability to hold amounts received in relation to services performed for any persons that are not agencies as prescribed under the FMA Act. Typically the Services for Other Entities and Trust Moneys Special Accounts will be used when an agency receives amounts from another legal entity to perform a service that they offer. Often the services are for foreign or state governments.
Consultation
The agency affected by this instrument is the Australian Pesticides and Veterinary Medicines Authority. 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 Services for Other Entities and Trust Moneys – Australian Pesticides and Veterinary Medicines Authority Special Account
| Opening Balance 2008-09 2007-08 $’000 | Credits 2008-09 2007-08 $’000 | Debits 2008-09 2007-08 $’000 | Closing Balance 2008-09 2007-08 $’000 |
Services for Other Entities and Trust Moneys – Australian Pesticides and Veterinary Medicines Authority Special Account | * * | * * | * * | * * |
* Due to the agency becoming newly prescribed under the FMA Act the receipts and expenditure of miscellaneous moneys is not able to be estimated at this time.
Overview
The Financial Management and Accountability Act 1997, enacted by the Parliament of Australia, was established to ensure the effective and accountable management of Commonwealth finances. The Act provides the legal framework for the financial management of Commonwealth entities, including the establishment and management of Special Accounts. The Services for Other Entities and Trust Moneys – Australian Pesticides and Veterinary Medicines Authority Special Account Determination 2007/08, made under subsection 20(1) of the FMA Act, was introduced to facilitate the simplification of the financial framework for the Australian Pesticides and Veterinary Medicines Authority. This determination combines the previously separate Other Trust Moneys Special Account and Services for Other Government and Non-agency Bodies Special Account into a single Special Account to streamline financial operations. The policy objective is to enable the Australian Pesticides and Veterinary Medicines Authority to manage and disburse funds for services rendered to non-agency entities and to hold trust moneys effectively, thereby ensuring compliance with financial management standards.
Scope and Application
The Financial Management and Accountability Act 1997 Determination 2007/08, issued under the authority of the Minister for Finance and Administration, establishes a Special Account named the Services for Other Entities and Trust Moneys – Australian Pesticides and Veterinary Medicines Authority Special Account. This account is specifically tailored to manage financial transactions of the Australian Pesticides and Veterinary Medicines Authority, which is newly prescribed under the FMA Act. The account allows for the holding of funds on behalf of other entities and facilitates the appropriation for spending these funds as per the established purposes. The determination outlines the specific purposes for which the account may be debited, including the handling of small miscellaneous moneys such as found moneys and workers’ compensation payments, as well as funds received for services rendered to non-agency bodies. This consolidation of the Other Trust Moneys Special Account and the Services for Other Government and Non-agency Bodies Special Account aims to streamline the financial management framework of the agency.
The Determination adheres to the requirements of the FMA Act, which mandates that any creation or variation of Special Accounts must be tabled in both Houses of Parliament and may be disallowed within five sitting days of tabling. The Financial Management and Accountability Regulations 1997 further specify that the account becomes effective on the calendar day following the disallowance period unless a later date is prescribed. The legislation and other laws referenced in the notes to the Determination guide the crediting and debiting of amounts within this Special Account, ensuring compliance with financial management standards. The account's operation is integral to the agency’s financial framework, facilitating the management of trust moneys and miscellaneous funds effectively.
Key Provisions
The main operative sections of the Determination 2007/08 under the Financial Management and Accountability Act 1997 (FMA Act) establish a Special Account titled "Services for Other Entities and Trust Moneys – Australian Pesticides and Veterinary Medicines Authority Special Account" (paragraph 1). This Special Account is designed to manage the financial transactions of the Australian Pesticides and Veterinary Medicines Authority (APVMA) in relation to services provided to other entities and the handling of trust moneys. Clause 5 of the Determination (paragraph 5) specifies the purposes for which the Special Account can be debited, including expenditures for services rendered to entities other than government agencies, and the holding of trust moneys on behalf of others.
The obligations and requirements imposed by the Determination on the APVMA include the management of funds within the Special Account to ensure they are only used for the specified purposes. The APVMA must maintain accurate records of all credits to and debits from the Special Account, ensuring compliance with the FMA Act. This includes adhering to the appropriation process outlined in section 20 of the FMA Act, which mandates that any expenditure from the Consolidated Revenue Fund must be authorised by Parliament. The Determination also necessitates that any changes to the Special Account must be tabled in both Houses of Parliament, with the possibility of disallowance within five sitting days of tabling (section 22 of the FMA Act).
The Determination includes provisions for offences, penalties, and consequences for breaches. While the specific penalties are not detailed in the Determination, breaches of the FMA Act generally attract penalties that can include fines and, in some cases, imprisonment. The severity of the penalties would depend on the nature and extent of the breach. For example, unauthorised expenditure from the Special Account could result in civil or criminal penalties under the FMA Act. Additionally, officials responsible for mismanagement or misappropriation of funds could face disciplinary actions, including termination of employment and potential criminal charges.
The Determination also ensures that the disallowance provisions under section 22 of the FMA Act are preserved, exempting Special Account Determinations from certain subsections of the Legislative Instruments Act 2003. This means that the disallowance process for the Special Account Determinations remains intact, allowing for parliamentary oversight and control. The combination of the Other Trust Moneys Special Account and the Services for other Government and Non-agency Bodies Special Account into a single Special Account aims to simplify the financial framework for the APVMA, facilitating better management of its financial obligations and transactions.