EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2009/23 to vary and abolish a Special Account
Purposes of Determination 2009/23
The attached instrument makes a determination under subsections 20 (2) and (3) of the Financial Management and Accountability Act 1997 (FMA Act) to vary and subsequently abolish the Media Commissions Special Account (MCSA).
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 may be 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 the purposes 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 the 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, such a Determination is not subject to parliamentary disallowance.
Operation of Determination 2009/23
Reasons for varying the Special Account
The MCSA is being varied to allow its balance to be credited to the Coordinated Procurement Contracting Special Account (CPCSA). The MCSA was established to appropriate funding for activities related to the processing of media commissions through the central advertising system to the advertising and related agencies. The Special Account records amounts until such time as payments are made for advertising and related agencies.
The CPCSA was established to facilitate centralised procurement and contracting activities of the Australian Government. Consistent with this, where the purposes of other Special Accounts were included in the purposes of the CPCSA, these Special Accounts have been subsumed by the CPCSA. The balances of the Campaign Advertising Special Account and the Fleet Monitoring Body component of the Business Services Special Account have been credited to the CPCSA in this manner.
The MCSA is another Special Account for which the purposes are consistent with the CPCSA and therefore the balance of the MCSA is being credited to the CPCSA. No variation to the CPCSA determination is required. Once the balance of the MCSA has been credited to the CPCSA, the MCSA will be abolished.
Effect of this Determination
This Determination varies the MCSA to allow its balance to be credited to the CPCSA. Clause 4 of Determination 2009/23 provides that the MCSA will be abolished when its balance reaches zero.
Consultation
The Department of Finance and Deregulation is the agency affected by this 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 Media Commissions Special Account
| 2009-10 ($’000) |
| Opening Balance | Credits | Debits | Closing Balance |
Media Commissions Special Account | 15,697 | 5,500 | 21,197(1) | 0 |
1. Includes balance debited from the Media Commissions Special Account and credited to the CPCSA.
Overview
The Financial Management and Accountability Act 1997, amended by Determination 2009/23, addresses the need to streamline the financial management of special accounts within the Australian government. This determination, issued under the authority of the Minister for Finance and Deregulation, aims to consolidate funds from the Media Commissions Special Account (MCSA) into the Coordinated Procurement Contracting Special Account (CPCSA). The primary objective is to align the financial resources and administrative purposes of these special accounts with the broader objectives of centralised procurement and contracting activities of the Australian Government. The MCSA, previously used for processing media commissions through the central advertising system, is being abolished as its functions and funding are integrated into the CPCSA, facilitating a more efficient allocation of resources and simplifying the financial oversight process. This legislative action ensures that the financial management practices of the Commonwealth adhere to the constitutional requirement of parliamentary appropriation for government spending.
Scope and Application
The Financial Management and Accountability Act 1997 (FMA Act) is a Commonwealth legislation that governs the financial management of the Australian Government, and Determination 2009/23, issued under the Act, specifically addresses the variation and subsequent abolition of the Media Commissions Special Account (MCSA). This determination applies to the MCSA, which was established to manage funds related to the processing of media commissions for advertising and related agencies, ensuring that all expenditures are appropriately authorised and recorded within the Consolidated Revenue Fund (CRF) as per constitutional requirements. The amendment to the MCSA allows its balance to be credited to the Coordinated Procurement Contracting Special Account (CPCSA), which facilitates centralised procurement and contracting activities of the Australian Government. This change reflects an internal restructuring aimed at aligning the special accounts more closely with the overarching objectives of the CPCSA. The geographic and jurisdictional reach of this Act is limited to the Commonwealth of Australia, as it pertains to the financial management of government funds within the national framework. The determination does not require disallowance by either House of Parliament and comes into effect immediately after the disallowance period, or if no disallowance occurs, on the specified date.
Exclusions and exemptions within the scope of the FMA Act and its determinations are limited to specific provisions under the Legislative Instruments Act 2003, which exempt certain special account determinations from disallowance. The operation of this particular determination is straightforward, aiming to streamline financial management by consolidating similar accounts and reducing administrative overheads. The effect of this determination is that once the MCSA balance is transferred to the CPCSA, the MCSA will cease to exist, effectively abolishing it. No external consultation was deemed necessary due to the internal nature of the changes, focusing solely on the Department of Finance and Deregulation, which is the primary entity affected by these adjustments.
Key Provisions
The main operative sections of Determination 2009/23 under the Financial Management and Accountability Act 1997 (FMA Act) are those that establish the variation and subsequent abolition of the Media Commissions Special Account (MCSA) (section 4). This Determination allows the balance of the MCSA to be credited to the Coordinated Procurement Contracting Special Account (CPCSA), and once the MCSA's balance reaches zero, it will be abolished (section 4). This process ensures the funds are appropriately aligned with the overarching objectives of centralised procurement and contracting activities of the Australian Government.
The obligations and requirements imposed by Determination 2009/23 on the parties or entities it governs include the proper recording and transfer of funds from the MCSA to the CPCSA. The Finance Minister is mandated to table a copy of the determining instrument in each House of the Parliament (section 22 of the FMA Act). This procedural requirement ensures transparency and parliamentary oversight, although the disallowance provisions do not apply to the abolition of the MCSA (Regulation 10 of the Legislative Instruments Regulations 2004). The Department of Finance and Deregulation, as the affected agency, must ensure that the transition of funds is accurately recorded and reported in accordance with the provisions set out in the Determination.
Any breach of the requirements outlined in Determination 2009/23 could lead to administrative or financial discrepancies that might result in corrective actions or legal scrutiny. While the Determination itself does not explicitly list offences, penalties, or civil/criminal consequences, any failure to adhere to the provisions could lead to potential investigations or audits by the relevant authorities. The overarching framework of the FMA Act, however, provides a basis for enforcing compliance through other legislative means, ensuring that the financial management and accountability of the Commonwealth are upheld.