Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted by the Australian Parliament to ensure proper financial management and accountability within the Commonwealth. The Act provides a framework for financial management and accountability, including the establishment of Special Accounts under section 20. The Explanatory Statement for Determination 2009/05, issued by the authority of the Minister for Finance and Deregulation, outlines the creation of a Special Account entitled Comcover Special Account. This determination was made to address the need for a more accurate description of Comcover’s activities and to allow for payments for uninsured superannuation liability claims, which was not feasible under the existing Comcover Account established in 1998. The purpose of this Special Account is to credit premiums collected from Fund Members and to debit amounts to fund claims, accumulating reserves within the account. The establishment of this Special Account ensures compliance with constitutional requirements and legislative instruments, facilitating the appropriate allocation and utilisation of funds for Comcover’s risk management and insurance services.

Scope and Application

The Determination 2009/05 under the Financial Management and Accountability Act 1997 establishes a Special Account named the Comcover Special Account. This Special Account pertains to the Comcover, which provides risk management and insurance services to around 160 Australian General Government Sector entities. The Special Account facilitates the crediting of premiums collected from fund members and the debiting of amounts for claims, thereby accumulating reserves to meet these obligations. The determination outlines the specific purposes for which the account may be credited and debited and specifies the nature of these transactions. The Comcover Special Account is established to address the practical limitations of modifying the existing Comcover Account, which was created by an earlier determination in 1998. Once established, the existing account will be abolished. The operation of this Special Account is supported by an appropriation under section 20 of the FMA Act and is subject to parliamentary disallowance as per section 22 of the FMA Act. The account is intended to provide a more accurate reflection of Comcover’s activities and to enable payments for uninsured superannuation liability claims.

Key Provisions

The Determination 2009/05 under the Financial Management and Accountability Act 1997 (FMA Act) establishes a Special Account entitled Comcover Special Account. The key provisions of this determination are found in section 20(1), which allows for the creation of a Special Account by a determination, and section 22, which mandates the tabling of such determinations in Parliament. Section 20 specifies the nature of amounts that may be credited to the Special Account, namely premiums collected from Fund Members, and the purposes for which amounts may be debited, such as funding claims. The Comcover Special Account is intended to provide risk management and insurance services to about 160 Australian General Government Sector entities. This Special Account replaces the existing Comcover Account established by a prior determination on 7 April 1998, which will be abolished upon the establishment of the new account. The obligations imposed by the Act on the parties governed by this determination include the requirement for the Finance Minister to table the determination in each House of Parliament (section 22). The Department of Finance and Deregulation, as the affected agency, must ensure that the form of the instrument is agreed upon and that it complies with the legislative requirements. Moreover, the Special Account must adhere to the rules governing appropriations and the Consolidated Revenue Fund (CRF), ensuring that expenditures are appropriately authorised and accounted for within the legal framework. In terms of consequences for breach, the Act does not explicitly state penalties for non-compliance with the establishment or operation of the Special Account. However, the overarching framework of the FMA Act implies that unauthorised expenditures or mismanagement of funds could lead to serious legal and financial repercussions. The Act's provisions for disallowance (section 22) and the potential for disallowance by either House of Parliament underscore the importance of compliance. Any significant breaches might also invite scrutiny from the relevant parliamentary committees and could result in broader administrative or financial penalties as determined by the applicable laws and regulations.