EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Determination 2008/24 to establish a Special Account

Purposes of Determination 2008/24

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 Indigenous Communities Strategic Investment Program 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 Indigenous Communities Strategic Investment Program 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 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 Determination 2008/24

Purpose of the Indigenous Communities Strategic Investment Program Special Account

The determination will establish a single Special Account for the Department of Families, Housing, Community Services and Indigenous Affairs (FAHCSIA).  

The primary purpose is to manage contributions from other agencies, to pool these amounts, and make payments toward ICSI related projects that have the objective of building capacity in indigenous communities.  

Reasons for establishing a new Special Account

FAHCSIA is the lead agency for the ICSI program and coordinates the payment of ICSI-related projects, based on agreements with State and Territory governments.

ICSI was established in 2007-08 and currently pools contributions from the Department of Health and Ageing and the Department of Education, Employment and Workplace Relations.

A Special Account will provide the appropriation authority to cover amounts managed under the ICSI program, increase the transparency of contributions from other agencies and provide flexibility to pool contributions.

Specific purposes under clause 5 provide the following debiting arrangements:

• Paragraphs 5(1)(a) describes the primary purposes for which expenditure can be made from the Special Account;
• Paragraph 5(1)(b) allows incidental costs, including such items as auditing, reporting, budgeting, accounting and information technology services incurred in the course of operating the Special Account, to be debited from the Special Account;
• Paragraph 5(1)(c) allows the balance of the Special Account to be reduced without a notional or real payment occurring, including debiting amounts from the balance of the Special Account that not have been allocated to specific ICSI projects, as at the end of each financial year;
• Paragraph 5(1)(d) allows the Special Account to be 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.

Consultation

The Department of Families, Housing, Community Services and Indigenous Affairs is the agency affected by this instrument, and was provided with drafts of the instrument and agrees 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 Indigenous Communities Strategic Investment Program Special Account