EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2008/09 to vary the Business Services Special Account
Purposes of Determination 2008/09
The attached Determination is made under subsection 20 (2) of the Financial Management and Accountability Act 1997 (FMA Act) to vary the Business Services 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 Business Services 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 the standard disallowance provisions of the Legislative Instruments Act 2003. The Determination may prescribe a later date upon which the Special Account can be relied upon.
Special Accounts can be abolished by a determination of the Finance Minister. However, there is no requirement to table such a determination.
Purpose of the Business Services Special Account
This determination is required to vary the Business Services Special Account established by Section 20 (1) of the FMA Act. The purpose of the variation is to remove fleet management as an activity operating through that account and transfer it to a new special account to be established to cover all coordinated procurement contracting activities of the Australian Government. Coordinated procurement contracting will cover all the procurement processes associated with establishing whole of government standing offers and the ongoing contract management of those arrangements for all departments and agencies subject to the FMA Act.
The Business Services Special Account will continue to cover a number of functions associated with the former Department of Administrative Services (DAS). These functions relate to the sentencing and disposal of DAS records and the management and settlement of any personal injury and other legal claims which may arise from any activity associated with the former DAS.
Changes required
The changes required to the old Account are set out below:
- amending the purpose clause to remove the previous sub-clause (a) relating to the management of the whole of government contract for providing fleet management and leasing services to government departments and agencies; and
- the purpose of the Special Account has been varied to include a sub-clause which will allow the crediting of amounts relating to fleet management to the Coordinated Procurement Contracting Special Account.
The existing balances relating to the operations of fleet management are to be debited from the Business Services Special Account and credited to the newly established Coordinated Procurement Contracting Special Account.
The Coordinated Procurement Contracting Special Account will be established by a separate determination, Financial Management and Accountability Determination 2008/08 Coordinated Procurement Contracting Special Account Establishment 2008.
Consultation
The Department of Finance and Deregulation is the agency affected by this instrument. As the instrument is for internal machinery of government purposes only, no consultation was considered necessary with other persons (in accordance with the provisions of section 18 of the Legislative Instruments Act 2003).
Estimates of transactions on the Business Services 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 |
Business Services Special Account | 6,535 | * | * | * |
- | 7,837 | 1,302 | 6,535 |
* Estimates cannot be established at this time.
Overview
The Financial Management and Accountability Act 1997, through the Determination 2008/09, provides a framework for the variation of the Business Services Special Account. This legislation was introduced to address the need for realigning the allocation of funds within special accounts to better reflect the operational activities of the Australian government. The purpose of this determination is to remove fleet management services from the Business Services Special Account and transfer these services to a new special account dedicated to coordinated procurement contracting. The Business Services Special Account will continue to manage functions such as the disposal of records and the settlement of legal claims. The changes required involve amending the purpose clause and reallocating existing balances related to fleet management to the newly established Coordinated Procurement Contracting Special Account. The enacting body, the Minister for Finance and Deregulation, ensures that these variations comply with the Financial Management and Accountability Act and are subject to parliamentary review and disallowance.
Scope and Application
The Financial Management and Accountability Determination 2008/09 to vary the Business Services Special Account is made under the Financial Management and Accountability Act 1997, and it outlines the variation of the Business Services Special Account. This account is one of the special accounts established to manage specific purposes within the consolidated revenue fund, and this determination modifies the account by transferring the fleet management activities to a new special account for coordinated procurement contracting. This legislation applies to entities and activities within the Commonwealth of Australia that are subject to the Financial Management and Accountability Act 1997, such as government departments and agencies. The changes remove fleet management as a function of the Business Services Special Account, transferring it to a new Coordinated Procurement Contracting Special Account. The Business Services Special Account will continue to cover functions associated with the sentencing and disposal of records from the former Department of Administrative Services and the management of personal injury and other legal claims related to former DAS activities. The application of this determination is limited to the Commonwealth of Australia and does not extend to state or territory governments. The establishment and variation of special accounts are subject to parliamentary disallowance provisions, ensuring oversight and accountability of financial management within the government.
Key Provisions
The main operative sections of the Determination 2008/09 (paragraphs 1-10) establish the revised purpose and operational parameters for the Business Services Special Account (BSSA) under the Financial Management and Accountability Act 1997 (FMA Act). This includes the removal of fleet management activities from the BSSA and their transfer to a new Coordinated Procurement Contracting Special Account. The Determination also specifies the nature of amounts that may be credited to, and the purposes for which amounts may be debited from, the BSSA. According to section 20(2) of the FMA Act, these determinations are necessary to manage the Consolidated Revenue Fund effectively and require the Finance Minister to table a copy in each House of Parliament. If not disallowed within five sitting days, the determination comes into effect on the day after disallowance could have occurred. The determination allows for a later effective date if prescribed within the document.
The Determination imposes specific obligations and requirements on the entities governed by it, primarily focusing on the separation of fleet management activities from the BSSA to a newly established Coordinated Procurement Contracting Special Account. This separation involves debiting the existing balances relating to fleet management from the BSSA and crediting them to the new account. The BSSA is to continue managing functions related to the sentencing and disposal of records and the management of legal claims from the former Department of Administrative Services. These requirements ensure that the BSSA remains focused on its intended activities and that fleet management activities are appropriately accounted for under a new special account.
The Determination does not explicitly outline specific offences, penalties, or consequences for breach. However, the legislative framework under which it operates, namely the FMA Act, provides a broader context for potential consequences. Under the FMA Act, breaches of financial management and accountability provisions can lead to civil or criminal penalties. For instance, section 35 of the FMA Act provides for civil penalties for breaches, including fines up to a maximum of 5,000 penalty units for individuals and 25,000 penalty units for bodies corporate. Additionally, section 36 allows for criminal penalties for serious breaches, which can include fines and imprisonment terms that vary according to the severity of the breach. These penalties underscore the importance of adhering to the provisions set out in the Determination and the broader legislative framework.