EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2009/24 - Special Accounts Abolition 2009
Purposes of Determination 2009/24
The attached instrument makes a Determination under section 20 of the Financial Management and Accountability Act 1997 (FMA Act) to abolish two Special Accounts for the Department of Foreign Affairs and Trade – the Services for other Governments and Non-agency Bodies Account and the Other Trust Moneys 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 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 2009/24
Reasons for abolishing the Special Accounts
The previously mentioned Special Accounts are being abolished by this instrument because, as part of a program to simplify the financial framework, the purposes of the separate Other Trust Moneys Account (OTM) and Services for other Governments and Non‑agency Bodies Account (SOG) are being combined within a single similar purpose Special Account – a Services for Other Entities and Trust Moneys Special Account (SOETM).
The SOETM is being established by Determination 2009/25. It is expected that the balances of the OTM and SOG Accounts will be transferred to the SOETM Special Account upon its creation, thereby making the OTM and SOG Accounts redundant.
Effect of this Determination
Each Special Account in Schedule 1 is abolished by this Determination from the time at which the balance of that Special Account reaches zero.
Consultation
The Department of Foreign Affairs and Trade is the agency affected by this instrument. The agency 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 in the Special Accounts
| 2009-10 ($’000) |
| Opening Balance | Credits | Debits | Closing Balance |
Services for other Government and Non-agency Bodies Account | 3,482 | 1,250 | 4,732 | 0 |
Other Trust Moneys Account | 789 | 625 | 1,414 | 0 |
Overview
The Financial Management and Accountability Act 1997 (FMA Act) was enacted to provide a framework for the management of public money, ensuring that public funds are used effectively, efficiently, economically and ethically. Determination 2009/24 was introduced by the Minister for Finance and Deregulation as a means to streamline the financial operations of the Commonwealth government by abolishing two special accounts within the Department of Foreign Affairs and Trade. Specifically, the Services for other Governments and Non-agency Bodies Account and the Other Trust Moneys Account are being abolished to consolidate their functions into a new Services for Other Entities and Trust Moneys Special Account (SOETM), thus simplifying the financial management structure and enhancing accountability and efficiency in handling government funds. This determination aligns with the overarching policy objective of the FMA Act to maintain a robust financial management system within the government.
Scope and Application
The Financial Management and Accountability Act 1997 Determination 2009/24 pertains to the abolition of two Special Accounts within the Department of Foreign Affairs and Trade, namely the Services for other Governments and Non-agency Bodies Account and the Other Trust Moneys Account. This Determination applies specifically to these accounts, which are integral parts of the financial framework of the Commonwealth as outlined in the FMA Act. The purpose of these Special Accounts was to allow for the appropriation of funds from the Consolidated Revenue Fund for specified purposes, subject to parliamentary oversight and disallowance provisions. The abolition of these accounts is a strategic move to streamline financial operations by consolidating their functions into a new Services for Other Entities and Trust Moneys Special Account, established by Determination 2009/25. This consolidation is part of a broader initiative to simplify the financial management structure. The Determination will take effect once the balances of the affected Special Accounts reach zero, effectively rendering them redundant. It is noteworthy that while the establishment or variation of Special Accounts is subject to disallowance by either House of Parliament, the abolition of these accounts does not require such parliamentary approval. This Determination applies nationally, affecting the financial operations of the Department of Foreign Affairs and Trade across the Commonwealth.
Key Provisions
Determination 2009/24, made under section 20 of the Financial Management and Accountability Act 1997 (FMA Act), specifies the abolition of two Special Accounts for the Department of Foreign Affairs and Trade: the Services for other Governments and Non-agency Bodies Account and the Other Trust Moneys Account (paragraph 1). The purpose of this Determination is to streamline the financial framework by consolidating the purposes of these accounts into a new Services for Other Entities and Trust Moneys Special Account (SOETM), established by Determination 2009/25 (paragraph 3). The balances of the abolished accounts are expected to be transferred to the SOETM Special Account, rendering the previous accounts redundant.
The obligations imposed by this Determination include the requirement for the balances of the Services for other Governments and Non-agency Bodies Account and the Other Trust Moneys Account to reach zero, at which point these accounts will be abolished (paragraph 4). The Department of Foreign Affairs and Trade, as the affected agency, has been consulted and agrees with the form of the instrument. Furthermore, as this Determination pertains to internal machinery of government purposes only, no further consultation with other persons was deemed necessary (paragraph 5).
There are no offences, penalties, or civil/criminal consequences specified for breaching this Determination. However, it is crucial to adhere to the provisions of the FMA Act and the relevant Determinations to avoid any legal or financial repercussions. Non-compliance with financial management and accountability regulations could potentially result in administrative or disciplinary actions, but these are not explicitly stated in the text of the Determination. The abolition of Special Accounts and the establishment of a new account must be carried out in accordance with the legislative framework to ensure proper financial management and accountability within the Commonwealth.