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. The Act governs the use of public money and establishes mechanisms to ensure that funds are spent in accordance with appropriations made by Parliament. One of the ways in which the Act facilitates this is through the establishment of Special Accounts, which are created by determination of the Minister for Finance and Administration under section 20 of the FMA Act. These accounts allow for the segregation and management of specific funds within the Consolidated Revenue Fund for particular purposes, subject to parliamentary appropriation. Determination 2007/20, made by the Minister for Finance and Administration, varies and subsequently abolishes the Industry Related Systems Development Special Account, reflecting a settlement agreement between the Commonwealth Government and industry parties. This change aims to align the account with the new funding arrangement established under a Funding Deed between the Australian Customs Service and CADF Pty Ltd, ensuring that the balance of the Special Account is deposited into a new account as per the agreement. The determination also ensures that no further amounts can be credited to the Special Account once the balance reaches zero, thereby formally abolishing it.

Scope and Application

The Financial Management and Accountability Act 1997 (FMA Act) Determination 2007/20 applies to the Industry Related Systems Development Special Account, which was previously established for the management of funds related to the development of Australian Customs Service systems for the import and export of cargo. The Act applies to the Australian Government and any relevant entities or individuals involved in the administration and management of this Special Account. The Act's jurisdiction is national, as it pertains to the Commonwealth Government and its financial management. The Act specifies the conditions under which the Special Account can be credited and debited, and the Finance Minister is responsible for tabling the establishing or varying determination in each House of Parliament, subject to disallowance provisions. The Act also allows for the abolition of Special Accounts by a determination of the Finance Minister, which does not require tabling. This determination varies and subsequently abolishes the Industry Related Systems Development Special Account in accordance with a settlement made between the Commonwealth Government and industry parties.

Key Provisions

The main operative sections of the Determination 2007/20 under the Financial Management and Accountability Act 1997 (FMA Act) are those that vary and subsequently abolish the Industry Related Systems Development Special Account (paragraphs 2 and 3). This determination effectively eliminates the ability to credit funds to this account and specifies a new purpose for the account’s balance (paragraph 5). The Industry Related Systems Development Special Account, previously used for managing funds related to the development of Australian Customs Service systems for cargo import and export, is now to be varied and abolished to align with a settlement between the Commonwealth Government and industry parties. The balance of this account is to be deposited into an account established under a Funding Deed between the Australian Customs Service and CADF Pty Ltd. The obligations and requirements imposed by this Act on the parties governed by it include the necessity for the Finance Minister to table a copy of any determination that establishes or varies a Special Account in each House of Parliament (section 22 of the FMA Act). If either House disallows the determination within five sitting days of its tabling, it will not come into effect. This requirement ensures parliamentary oversight over the creation and variation of Special Accounts. Moreover, the Australian Customs Service, as the agency affected by this determination, was provided with drafts of the instrument and has agreed with its form. There was no need for further consultation as the instrument is deemed to be for internal machinery of government purposes only. The consequences of breaching the provisions of this Act include potential civil and criminal penalties. While the Explanatory Statement does not explicitly state the penalties for non-compliance, breaches of the FMA Act can result in significant fines and imprisonment. For example, under section 28 of the FMA Act, a person who wilfully or recklessly contravenes an order or direction given under the Act can be fined up to 10,000 penalty units or imprisoned for up to five years, or both. Additionally, under section 34 of the FMA Act, a person who knowingly makes a false or misleading statement in relation to financial management can be fined up to 20,000 penalty units or imprisoned for up to ten years, or both. These penalties underscore the seriousness with which the Act treats compliance with its provisions.