Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted to ensure that the Commonwealth’s financial management complies with the standards of accountability and transparency. The Act provides the framework for the management of the Commonwealth’s finances, including the establishment of Special Accounts to facilitate specific expenditures. Determination 2009/26, issued under the authority of the Minister for Finance and Deregulation, was introduced to vary and subsequently abolish the Commonwealth Social Services Special Account. The purpose of this determination is to align Centrelink’s financial arrangements with the decision to transition from charging fees for services to receiving a direct departmental appropriation for operating expenses, as announced in the 2009-10 Budget. This change effectively removes the need for the Special Account, leading to its eventual abolition once its balance reaches zero. The determination is subject to parliamentary disallowance under section 22 of the FMA Act, although the abolition of the Special Account itself is not. The determination follows consultation with Centrelink, the agency affected, which agrees with the form of the instrument.

Scope and Application

The Financial Management and Accountability Act 1997 Determination 2009/26 applies to the Commonwealth Social Services Special Account, which is administered by Centrelink, to modify and subsequently abolish the account. This determination is made under the authority of the Minister for Finance and Deregulation and it outlines the procedure for altering the Special Account to cease crediting further amounts, with the account to be abolished once its balance reaches zero. This act is applicable to the Commonwealth of Australia and its appropriations are subject to parliamentary oversight, with disallowance provisions allowing either House of Parliament to disallow the determination within five sitting days of its tabling. However, the abolition of the Special Account by this determination is not subject to disallowance. The determination affects Centrelink, which was provided with drafts of the instrument and agrees with its form, and is intended for internal machinery of government purposes only, hence consultation with other parties was not deemed necessary. The Special Account was established to allow Centrelink to use amounts received from other Commonwealth entities as fees for services rendered. However, the 2009-10 Budget decision shifted this model to a direct departmental appropriation for Centrelink’s operating expenses, thereby negating the need for further crediting to the Special Account. The act and its subsequent determination aim to streamline financial management within the Commonwealth by ensuring that appropriations are used effectively and in line with current budgetary decisions. This is a Commonwealth-wide application, affecting all entities under the purview of Centrelink and the financial regulations set by the Financial Management and Accountability Act 1997.

Key Provisions

The primary sections of the Determination 2009/26 under the Financial Management and Accountability Act 1997 (FMA Act) include the variation and subsequent abolition of the Commonwealth Social Services Special Account (CSS Special Account) (ss. 20(2) and (3)). This determination modifies the previous establishment of the CSS Special Account, which was detailed in Determination 2006/48. The determination removes the crediting clauses, effectively preventing any further amounts from being credited to the account (s. 4). The determination imposes obligations on Centrelink, the agency administering the CSS Special Account, to cease crediting amounts to the account and to manage its existing balance towards reaching zero. The Finance Minister, in making this determination, must table it in both Houses of Parliament (s. 22), though it is exempt from disallowance provisions under the Legislative Instruments Act 2003. Centrelink's agreement with the form of the instrument suggests an internal acceptance of these changes. In terms of penalties and consequences, the determination does not explicitly state penalties for non-compliance. However, the legislative framework under which it operates suggests that any failure to adhere to the provisions could lead to broader accountability and financial management issues. Given the nature of the determination, the primary consequence of non-compliance would likely involve internal audits and potential financial discrepancies in Centrelink’s accounts. The determination also highlights the legislative process, indicating that the disallowance of such determinations is subject to parliamentary scrutiny, although the abolition of Special Accounts does not require such scrutiny. The seamless transition from the CSS Special Account to direct departmental appropriations for Centrelink’s operating expenses signifies a significant shift in the financial management structure within the Commonwealth.