EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2009/33 to vary and abolish a Special Account
Purposes of Determination 2009/33
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 Australian Geological Survey Organisation 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 2009/33
Reasons for varying the Special Account
A new Special Account, entitled the Joint Australian U.S. Geological and Geophysical Research Station Special Account (JGGRS Special Account), will be established in order to give effect to changes that are required to the Australian Geological Survey Organisation Account (AGSO Account), but which are not practicable to make by variation to the AGSO Account due to the way in which the Initial Determination was structured.
The current purpose of the AGSO Account is:
For expenditure on agreed research projects and other program activities performed in conjunction with, or for private or other entities.
Change required
A clause has been inserted to allow amounts to be debited from the AGSO Account and credited to the new JGGRS Special Account.
Effect of this Determination
This Determination varies the AGSO Account to allow its balance to be credited to the new JGGRS Special Account. There may therefore be two Special Accounts with similar purposes operating for a short period of time, until the balance is credited. Clause 4 of Determination 2009/33 provides that the AGSO Account will be abolished when its balance reaches zero.
Limitations in the structure of the Initial Determination
It is not practicable to vary the Initial Determination signed by the delegate of the Minister for Finance and Administration on 31 December 1997 (establishing a Australian Geological Survey Organisation Reserve as a component of the Reserved Money Fund). This is because the format of the determination constrains the amount of information that can be included. Accordingly, a new Account is being established (Determination 2009/34) to provide for the continuation of the activities of the old Account, the incorporation of the necessary changes, and to ensure that the determination is as clear and informative as possible.
Consultation
Geoscience Australia 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 on the AGSO Account
| 2009-10 ($’000) |
| Opening Balance | Credits | Debits | Closing Balance |
Australian Geological Survey Organisation Account | 99 | 43 | 142(1) | 0 |
1. Includes balance debited from the AGSO Account and credited to the new JGGRS Special Account.
Overview
The Financial Management and Accountability Act 1997 was enacted to ensure that the financial management of Commonwealth entities is in accordance with best practices, including the prudent, efficient and economical use of public funds. This Act establishes the framework for financial management and accountability in the Commonwealth public sector. Determination 2009/33, issued under the authority of the Minister for Finance and Deregulation, serves to vary and abolish the Australian Geological Survey Organisation Account. The primary objective of this Determination is to address structural constraints in the Initial Determination signed in 1997 by establishing a new Joint Australian U.S. Geological and Geophysical Research Station Special Account. This change facilitates the continuation of activities under the new account while incorporating necessary modifications that were not feasible within the original account's structure. The determination is subject to the requirements of the Financial Management and Accountability Act, including the tabling of the determination in both Houses of Parliament and the potential disallowance by either House within five sitting days of tabling. The new Special Account aims to provide clarity and efficiency in managing the specified activities.
Scope and Application
The Financial Management and Accountability Act 1997 Determination 2009/33 applies specifically to the Australian Geological Survey Organisation Account (AGSO Account) and the newly established Joint Australian U.S. Geological and Geophysical Research Station Special Account (JGGRS Special Account). These Special Accounts are part of the Consolidated Revenue Fund (CRF) and are governed by the Financial Management and Accountability Act 1997. The AGSO Account is being varied and eventually abolished, with its remaining balance to be transferred to the JGGRS Special Account. This transition is necessitated by structural limitations in the original determination establishing the AGSO Account, which prevent necessary changes from being made. The new JGGRS Special Account will continue the activities of the AGSO Account with the required modifications, ensuring clarity and effectiveness in the account's management.
The Determination is subject to the Commonwealth jurisdiction and involves the Finance Minister, who is responsible for tabling the determination in each House of Parliament. The disallowance provisions under section 22 of the FMA Act apply, allowing either House to disallow the determination within five sitting days of its tabling. The Legislative Instruments Regulations 2004 preserve these disallowance provisions by exempting Special Account determinations from certain subsections of the Legislative Instruments Act 2003. Notably, the abolition of the AGSO Account by this Determination is not subject to parliamentary disallowance. This legislative change ensures the smooth transition of the specified activities and financial management between the two Special Accounts.
Key Provisions
Determination 2009/33 under the Financial Management and Accountability Act 1997 (FMA Act) varies and abolishes the Australian Geological Survey Organisation Account (AGSO Account) by establishing a new Joint Australian U.S. Geological and Geophysical Research Station Special Account (JGGRS Special Account). The AGSO Account, which was used for expenditure on agreed research projects and other program activities, is to be credited to the new JGGRS Special Account until its balance reaches zero (Section 4). This process allows for a transition period where both accounts may operate concurrently.
The obligations imposed by this determination on the relevant parties, primarily Geoscience Australia, include ensuring the accurate transfer of funds from the AGSO Account to the JGGRS Special Account. The Finance Minister is required to table a copy of the determination in each House of the Parliament, and it may be disallowed by either House within five sitting days (Section 22). Once the determination is not disallowed, it comes into effect on the calendar day after the last day on which it could have been disallowed.
The legislative framework does not specify any offences or penalties for breach of the provisions in Determination 2009/33. However, any failure to comply with the requirements to transfer funds accurately and timely could lead to financial mismanagement issues and potential scrutiny from parliamentary committees or the public. The determination itself does not outline specific penalties but relies on the general accountability and oversight mechanisms provided under the FMA Act and other relevant legislation to ensure compliance.