EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Administration
Financial Management and Accountability Act 1997
Determination 2007/14 to establish a Special Account
Purposes of Determination 2007/14
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 Expositions 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 Expositions 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 such a determination.
Operation of Determination 2007/14
Purpose of the Expositions Special Account
The determination will establish a single Special Account for the Department of Foreign Affairs and Trade to secure and manage moneys for Australia’s participation at the Shanghai 2010 exposition and future expositions.
The Department of Foreign Affairs and Trade is responsible for managing Australia’s participation at international expositions and will use the Special Account to administer financial transactions in relation to these expositions.
Reasons for establishing a new Special Account
The Expositions Special Account is required because the non-lapsing nature of an administered Special Account is better suited to managing such expositions as an exposition is a discrete business activity that extends over a number of years. In addition, a Special Account would provide greater transparency for sponsorship provided by Commonwealth and state governments and the private sector and overall project performance and accountability.
Clause 5(1) specifies the purposes for which a Special Account can be debited.
- Paragraphs 5(1) (a) describes the primary purposes for which expenditure can be made from the Special Account.
- Paragraph 5(1) (b) allows incidental costs, including such items as auditing, reporting, budgeting, accounting and information technology services incurred in the course of operating the Special Account, to be debited from the Special Account.
- Paragraph 5(1) (c) allows the balance of the Special Account to be reduced without a notional or real payment occurring.
- Paragraph 5(1) (d) allows amounts to be debited where an Act or other law requires or permits.
Consultation
The Department of Foreign Affairs and Trade is the agency affected by this instrument, and 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 Expositions 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 |
Expositions Special Account | 0 | 1,500 | 1,500 | 0 |
0 | 0 | 0 | 0 |
Overview
The Financial Management and Accountability Act 1997 (FMA Act) was enacted by the Parliament of Australia to ensure proper financial management and accountability within the Commonwealth Government. This legislation sets out the framework for the management of public money and the accountability of public officers. The Act aims to provide a robust system of controls and procedures to safeguard public funds and ensure that they are used efficiently, effectively, and in accordance with the law. The Act is administered by the Minister for Finance and Administration, who is responsible for ensuring that the financial management framework is effectively implemented across the government. Determination 2007/14, issued under the authority of the Minister for Finance and Administration, establishes the Expositions Special Account within the Department of Foreign Affairs and Trade. This Special Account is intended to manage finances related to Australia's participation in international expositions, such as the Shanghai 2010 exposition and future events. The primary purpose of this account is to provide a dedicated financial mechanism for these activities, ensuring transparency and accountability for sponsorships and overall project performance. The account allows for specific credits and debits, including primary expenditure, incidental costs, and compliance with legal requirements. The establishment of this Special Account addresses the need for a non-lapsing financial arrangement suitable for the long-term nature of exposition activities.
Scope and Application
The Financial Management and Accountability Act 1997 (FMA Act) Determination 2007/14 establishes the Expositions Special Account, a financial mechanism for the Department of Foreign Affairs and Trade to manage funds related to Australia's participation in international expositions, such as the Shanghai 2010 exposition. This Special Account is created under the authority of the Finance Minister, ensuring compliance with the constitutional requirement that all government revenues form one Consolidated Revenue Fund and may not be spent without parliamentary appropriation. The Expositions Special Account allows for specific appropriations to be made for exposition-related activities, facilitating the secure and transparent management of financial resources dedicated to these events. The Department of Foreign Affairs and Trade, which is responsible for managing Australia's participation in international expositions, will utilise this account to administer related financial transactions. The determination outlines the purposes for which the Special Account can be debited, including primary expenses related to expositions, incidental costs such as auditing and reporting, and any other costs mandated by law. The establishment of this Special Account is intended to provide greater clarity and accountability in the management of exposition-related funds, particularly given the multi-year nature of such events.
Key Provisions
The Determination 2007/14 under the Financial Management and Accountability Act 1997 establishes a Special Account named the Expositions Special Account (section 20(1)). This Special Account is intended to manage finances for Australia's participation in international expositions, such as the Shanghai 2010 exposition. The Department of Foreign Affairs and Trade is responsible for managing this account and its transactions (section 5(1)). The primary purposes for which this account can be debited include direct costs related to expositions, incidental costs such as auditing and IT services, reduction of the account balance without real payment, and amounts required or permitted by other laws (section 5(1)).
The obligations imposed by this Act on the parties involved, particularly the Department of Foreign Affairs and Trade, include the management of funds within the Expositions Special Account to ensure proper financial administration and accountability for expositions. This involves meticulous record-keeping and reporting to ensure that all transactions align with the purposes specified in the Determination. The account must be used strictly for the purposes outlined, and any incidental costs must be justifiable and related directly to the expositions' management (section 5(1)).
Failure to comply with the provisions of the Determination could result in various consequences. While the explanatory statement does not specify detailed penalties, breaches of financial management regulations generally could lead to administrative, civil, or criminal penalties. For instance, misuse of public funds or failure to comply with appropriation acts could result in penalties under the Public Governance, Performance and Accountability Act 2013, including fines and imprisonment. Additionally, the disallowance process under section 22 of the FMA Act allows either House of Parliament to reject the determination within five sitting days, preventing its enforcement if found in breach of parliamentary oversight.