EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2008/15 to vary Special Accounts
Purposes of Determination 2008/15
The attached instrument makes a determination under section 20 of the Financial Management and Accountability Act 1997 (FMA Act) to vary the purposes of certain Services for Other Governments and Non-agency Bodies (SOG) and Other Trust Moneys (OTM) Accounts. This instrument varies the determination entitled Initial Determination to Establish Certain Components of the Reserved Money Fund (the Initial Determination) made on 31 December 1997 that: (i) established specific purpose Special Accounts for selected Agencies; and (ii) established OTM and SOG Reserves for all FMA Act Agencies existing at that time.
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 the Determination 2008/15
Reasons for varying the Accounts
Determination 2000/04 (entitled ‘Determination to vary the purposes of and amounts that may be credited to, Special Accounts’), when issued on 4 February 2000, renamed all OTM and SOG Reserves as OTM and SOG Accounts. However, because of the structure of the Initial Determination, the crediting and debiting clauses of these OTM and SOG Accounts cannot readily be varied to meet Administrative Arrangements Order changes or other government policy requirements.
It is appropriate to vary the Initial Determination to allow the balances of OTM and SOG Accounts established under the Initial Determination to be credited to Special Accounts (where available) that have similar provisions.
Changes required
The heading ‘expenditure purpose’ in Attachment A of the Initial Determination has been replaced by the heading ‘purpose for which amounts may be debited’. This is more consistent with the wording of section 20 of the FMA Act, which uses ‘debited’ to include not only expenditure, but also notional payments and reductions in the balance of the Account.
The ‘expenditure purposes’ for OTM Accounts have been amended to include an additional purpose that allows the balance of OTM Accounts to be credited to a Special Account which has similar expenditure purposes.
Similarly, the ‘expenditure purposes’ for SOG Accounts have been amended to include an additional purpose that allows the balance of SOG Accounts to be credited to a Special Account which has similar expenditure purposes.
Effect of this determination
The OTM and SOG Accounts are being varied to allow the balances of these Accounts to be credited to, where available, a similar Special Account. A similar Special Account (a Services of other Entities and Trust Monies Special Account) is expected to be established initially for the Department of Prime Minister and Cabinet (PM&C) and the Department of Education, Employment and Workplace Relations (DEEWR). However, over time it is expected that similar Special Accounts will be established for other Agencies that manage OTM and SOG Accounts.
Once the balances of the OTM and SOG Accounts are transferred to similar Special Accounts, the OTM and SOG Accounts will be abolished.
Consultation
PM&C and DEEWR are the Agencies affected by this instrument. These Agencies were provided with drafts of the instrument and agree 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 Special Accounts
| Opening Balance 2007-08 $’000 | Credits
2007-08 $’000 | Debits
2007-08 $’000 | Closing Balance 2007-08 $’000 |
Department of the Prime Minister and Cabinet |
|
|
|
|
Other Trust Moneys Account | 0 | 0 | 0 | 0 |
Services for other Governments and Non‑Agency Bodies Account | 1,058 | 0 | 1,058 | 0 |
Department of Education, Science and Training |
|
|
|
|
Other Trust Moneys Account | 2,709 | 0 | 2,709 | 0 |
Services for other Governments and Non‑Agency Bodies Account | 1,425 | 0 | 1,425 | 0 |
Department of Employment and Workplace Relations |
|
|
|
|
Other Trust Moneys Account | 208 | 0 | 208 | 0 |
Services for other Governments and Non‑Agency Bodies Account | 0 | 0 | 0 | 0 |