EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2008/21 to establish a Special Account
Purposes of Determination 2008/21
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 Office of the Auditing and Assurance Standards Board Services for Other Entities and Trust Moneys Special Account (OAUASB 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 OAUASB 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 Determination 2008/21
Purpose of the Office of the Auditing and Assurance Standards Board 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 OAUASB SOETM Special Account will enable Office of the Auditing and Assurance Standards Board (OAUASB) to hold and expend amounts on behalf of persons or entities other than the Commonwealth. The OAUASB is a prescribed Agency subject to the FMA Act 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 OAUASB 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 1997). 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 OAUASB. 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 Office of the Auditing and Assurance Standards Board Services for Other Entities and Trust Moneys Special Account
| Opening Balance 2009-10 2008-09 $’000 | Credits 2009-10 2008-09 $’000 | Debits 2009-10 2008-09 $’000 | Closing Balance 2009-10 2008-09 $’000 |
Office of the Auditing and Assurance Standards Board Services for Other Entities and Trust Moneys Special Account | ** | ** | ** | ** |
** Due to the agency becoming newly prescribed under the FMA Act the receipts and expenditure of moneys is not able to be estimated at this time.
Overview
The Financial Management and Accountability Act 1997 was enacted to provide a framework for the financial management and accountability of Commonwealth agencies. The Act seeks to ensure that public money is used economically, efficiently, and effectively, and that public funds are safeguarded and accounted for properly. Determination 2008/21, issued under the authority of the Minister for Finance and Deregulation, was introduced to establish a Special Account titled "Office of the Auditing and Assurance Standards Board Services for Other Entities and Trust Moneys Special Account" (OAUASB SOETM Special Account). This Special Account facilitates the Office of the Auditing and Assurance Standards Board (OAUASB) to manage funds on behalf of entities other than the Commonwealth, such as other governments and entities receiving workers' compensation payments. The establishment of this Special Account aims to provide a structured mechanism for handling miscellaneous small amounts of money, ensuring that these funds are accounted for appropriately and spent in accordance with specified purposes. The determination outlines the types of transactions that can be credited to and debited from the Special Account, ensuring compliance with the Financial Management and Accountability Act 1997 and other relevant legislation.
Scope and Application
The Determination 2008/21, under subsection 20(1) of the Financial Management and Accountability Act 1997 (FMA Act), establishes the Office of the Auditing and Assurance Standards Board Services for Other Entities and Trust Moneys Special Account (OAUASB SOETM Special Account) to manage and allocate funds for specific purposes. This Special Account is designed to handle small amounts of miscellaneous moneys, including those received from services performed for entities not prescribed under the FMA Act, such as other governments, and those received from Comcare related to workers' compensation payments. The OAUASB, being a prescribed Agency under the FMA Act, will use this Special Account to hold and expend funds on behalf of entities other than the Commonwealth, ensuring financial accountability and compliance with legislative requirements. The operation of this account is subject to the appropriation and oversight provisions outlined in the FMA Act, with the Finance Minister required to table the establishing Determination in each House of Parliament, allowing for potential disallowance within five sitting days. This instrument applies specifically to the OAUASB and does not involve community consultation as it pertains to machinery of government purposes.
The geographic and jurisdictional reach of this Determination is limited to the Commonwealth of Australia, specifically impacting the OAUASB. The Determination delineates the purposes for which funds can be credited to and debited from the Special Account, ensuring that expenditures align with the legislative intent. The account is supported by an appropriation under section 20 of the FMA Act and operates within the framework of the Consolidated Revenue Fund (CRF), allowing for specific financial transactions as defined. Any changes to this Determination are subject to the disallowance provisions in section 22 of the FMA Act, ensuring parliamentary oversight and accountability. This Determination does not specify any exclusions or exemptions but adheres to the regulations outlined in the Legislative Instruments Regulations 2004, which preserve the disallowance provisions under section 22 of the FMA Act.
Key Provisions
Determination 2008/21 under the Financial Management and Accountability Act 1997 (FMA Act) establishes the Office of the Auditing and Assurance Standards Board Services for Other Entities and Trust Moneys Special Account (OAUASB SOETM Special Account) (Section 20(1)). This Special Account allows the OAUASB to manage funds on behalf of entities other than the Commonwealth government. The nature of the funds that can be credited to this account and the purposes for which they can be expended are clearly defined within the Determination (Clause 5). For instance, these funds may include moneys received for services provided to non-Commonwealth entities or workers' compensation payments from Comcare (Subclause 5(a) and (b)).
The OAUASB, being a prescribed agency under the FMA Act, has specific obligations regarding the management and use of funds in the OAUASB SOETM Special Account. The agency must ensure that all transactions comply with the terms set out in the Determination, including the specific purposes for which the funds can be debited. This includes maintaining accurate records and reporting any significant transactions to the appropriate authorities as required (Section 22). The OAUASB is also required to consult with other relevant entities and ensure that the funds are used efficiently and effectively to achieve the intended purposes.
Breaches of the provisions outlined in Determination 2008/21 may result in both civil and criminal consequences. Under the FMA Act, any misuse of funds or failure to adhere to the specified purposes for which the Special Account can be debited may lead to disciplinary action against the OAUASB officials responsible. In addition, the misuse of funds could result in financial penalties. The exact penalties are not specified in the Determination but generally align with those provided under the FMA Act, which may include fines or other financial penalties as deemed appropriate by a court (Section 30). The OAUASB must also ensure compliance with other relevant financial management regulations to avoid any legal repercussions.