EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2008/17 to establish a Special Account
Purposes of Determination 2008/17
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 Old Parliament House Services for Other Entities and Trust Moneys Special Account (OPH SOETM 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 OPH SOETM 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 2008/17
Purpose of the Old Parliament House Services for Other Entities and Trust Moneys Special Account
Most Agencies under the FMA Act administer either a SOETM Special Account or other Special Accounts that together encompass the purposes of a SOETM Special Account.
The OPH SOETM Special Account will enable Old Parliament House (OPH) to hold and expend amounts on behalf of persons or entities other than the Commonwealth. OPH will become a prescribed Agency subject to the FMA Act from 1 July 2008 and has identified amounts that will be required to be held in a SOETM Special Account.
Typically the SOETM Special Account will be used to accommodate small amounts of miscellaneous moneys. For example, the SOETM Special Account may be used to hold amounts (a) received in connection with services performed for or on behalf of any persons or entities that are not Agencies as prescribed under the FMA Act, such as other governments; and (b) received from Comcare in relation to employees entitled to receive workers’ compensation payments.
Within the Determination that establishes the OPH SOETM Special Account, Clause 5 specifies the purposes for which the Special Account can be debited.
- Subclauses 5 (a) and (b) describe the primary purposes for expenditure of amounts from the Special Account.
- Subclause 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.
- Subclause 5 (d) allows the balance of the Special Account to be reduced by amounts that are not Special Public Money (as defined under section 16 of the Financial Management and Accountability Act). It covers amounts (i) that are not Special Public Money at the time they are credited to the special account; and (ii) that, due to some change in circumstances under which they are held, no longer have the status of Special Public Money. It is included to ensure that these amounts are not set aside indefinitely.
Consultation
The Agency affected by this instrument is OPH. The Agency was provided with drafts of the instrument and agrees with the form of the instrument. 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 Old Parliament House Services for Other Entities and Trust Moneys 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 – Old Parliament House Special Account | ** | ** | ** | ** |
Overview
The Financial Management and Accountability Act 1997 was enacted to ensure transparency, accountability, and efficiency in the financial management of Commonwealth agencies. The Act provides a framework for managing public money and requires agencies to maintain proper accounts and records of their financial transactions. The Financial Management and Accountability Act 1997 Determination 2008/17, issued by the Minister for Finance and Deregulation, establishes a Special Account titled the Old Parliament House Services for Other Entities and Trust Moneys Special Account (OPH SOETM Special Account). This Determination aims to facilitate the handling and expenditure of funds on behalf of entities other than the Commonwealth by Old Parliament House (OPH), which became a prescribed agency under the FMA Act from 1 July 2008. The policy objective is to streamline the financial management of miscellaneous small amounts, such as those received from other governments or Comcare for workers' compensation payments, by providing a dedicated account for these transactions. The establishment of this Special Account ensures that these funds are appropriately managed and accounted for within the framework of the FMA Act.
Scope and Application
The Determination 2008/17 under the Financial Management and Accountability Act 1997 establishes a Special Account named the Old Parliament House Services for Other Entities and Trust Moneys Special Account (OPH SOETM Special Account) to manage funds on behalf of entities other than the Commonwealth. This Special Account allows Old Parliament House (OPH), which becomes a prescribed Agency under the FMA Act from 1 July 2008, to hold and expend moneys for services rendered to or on behalf of non-Commonwealth entities, such as other governments, and for workers' compensation payments. The nature of these transactions, including credits and debits, is detailed within the Determination, ensuring compliance with section 20 of the FMA Act. The establishment of this Special Account is subject to disallowance provisions under section 22 of the FMA Act, where either House of Parliament can disallow the Determination within five sitting days of its tabling. The Special Account Determinations are exempt from certain disallowance provisions under the Legislative Instruments Act 2003, preserving the disallowance mechanism as outlined in section 22 of the FMA Act.
Key Provisions
The Financial Management and Accountability Act 1997 (FMA Act) establishes a framework for the management of financial resources within the Australian government. Under this Act, the Minister for Finance and Deregulation has the authority to establish Special Accounts to manage specific funds, as outlined in Determination 2008/17. This Determination establishes a Special Account titled "Old Parliament House Services for Other Entities and Trust Moneys Special Account" (OPH SOETM Special Account) and specifies the nature of the amounts that may be credited to and debited from this account (subsection 20(1)). The primary purposes for which this account can be debited are detailed in Clause 5 of the Determination, with subclauses (a) and (b) describing the main uses, such as services provided to non-prescribed entities and workers' compensation payments from Comcare, while subclauses (c) and (d) cater to other permissible debits and non-Special Public Money adjustments respectively.
The OPH SOETM Special Account serves as a financial repository for Old Parliament House (OPH), enabling it to manage funds on behalf of entities other than the Commonwealth. OPH becomes a prescribed Agency under the FMA Act from 1 July 2008, subject to specific financial management requirements. These requirements include ensuring that any amounts credited to the account must align with the specified purposes and that any debits must also comply with the prescribed conditions outlined in the Determination. The account is intended to manage small, miscellaneous amounts, such as payments for services rendered to non-prescribed entities and workers' compensation claims.
The Determination imposes obligations on OPH, ensuring that all transactions involving the OPH SOETM Special Account adhere to the conditions set out in the FMA Act. OPH must ensure that all credits and debits to the account are properly authorised and in accordance with the specified purposes. This involves maintaining accurate records and ensuring compliance with the financial management standards set forth by the FMA Act. Additionally, the account must be managed in a manner that ensures transparency and accountability, in line with broader financial governance requirements.
Failure to comply with the provisions of the Determination may result in various consequences, including potential penalties. While the Determination does not explicitly state penalties, breaches of the FMA Act can lead to civil or criminal liability, depending on the nature and severity of the breach. Civil penalties may include fines, while criminal penalties could involve imprisonment or both fines and imprisonment, depending on the offence and jurisdiction. It is essential for OPH to adhere to the specified requirements to avoid any legal repercussions and to maintain the integrity of the financial management system.