EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2010/01 to abolish two Special Accounts
Purposes of Determination 2010/01
The attached instrument makes a determination under subsection 20 (3) of the Financial Management and Accountability Act 1997 (FMA Act) to abolish two Special Accounts administered by the Department of the Environment, Water, Heritage and the Arts – the Other Trust Moneys Account and the Services for other Governments and Non-agency Bodies 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 2010/01
Reasons for abolishing the Special Accounts
The Special Accounts are being abolished by this Determination because, as part of a program to simplify the financial framework, the purposes of the separate Other Trust Moneys (OTM) and Services for other Governments and Non-agency Bodies (SOG) accounts are being combined within a single similar purpose Special Account – a Services for Other Entities and Trust Moneys (SOETM) Special Account.
The SOETM Special Account is being established by Determination 2010/02. 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
The Other Trust Moneys Account and the Services for other Governments and
Non-agency Bodies Account, administered by the Department of the Environment, Water, Heritage and the Arts, are abolished by this Determination with effect from the time at which the balance of the Special Account reaches zero.
Consultation
The Department of the Environment, Water, Heritage and the Arts 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 Special Accounts
| 2009-10 ($’000) |
| Opening Balance | Credits | Debits(1) | Closing Balance |
Other Trust Moneys Account | 274 | 0 | 274 | 0 |
Services for other Governments and Non-agency Bodies Account | 3,666 | 168 | 3,834 | 0 |
(1) Includes the balance debited from the respective Special Accounts and credited to the new SOETM Special Account.
Overview
The Financial Management and Accountability Act 1997 (FMA Act) was enacted to establish a robust framework for the management and accountability of Commonwealth finances. The Act, overseen by the Parliament, aims to ensure that all revenues and expenditures are conducted in accordance with legislative requirements, thereby maintaining transparency and fiscal responsibility. Determination 2010/01, issued under the authority of the Minister for Finance and Deregulation, addresses the need to streamline financial operations by abolishing the Other Trust Moneys Account and the Services for other Governments and Non-agency Bodies Account, both administered by the Department of the Environment, Water, Heritage and the Arts. These accounts are being abolished to simplify the financial framework and consolidate their purposes within a new Services for Other Entities and Trust Moneys Special Account, as outlined in Determination 2010/02. This initiative aims to enhance efficiency and reduce redundancy within the financial management system.
Scope and Application
The Determination 2010/01 under the Financial Management and Accountability Act 1997 (FMA Act) applies to the abolition of two Special Accounts, namely the Other Trust Moneys Account and the Services for other Governments and Non-agency Bodies Account, which are administered by the Department of the Environment, Water, Heritage and the Arts. This legislative instrument is part of a broader initiative to streamline the financial management framework of the Commonwealth, resulting in the creation of a new Services for Other Entities and Trust Moneys (SOETM) Special Account, which consolidates the functions of the two accounts being abolished. The determination is made by the Minister for Finance and Deregulation and does not require disallowance by either House of Parliament, as it is not subject to disallowance under the FMA Act. The abolition takes effect once the balance of each Special Account reaches zero, and any remaining balances will be transferred to the new SOETM Special Account. This legislative instrument does not extend to any other accounts or departments outside of those specified and is primarily concerned with internal administrative changes.
Key Provisions
The Determination 2010/01 under the Financial Management and Accountability Act 1997 (section 20(3)) serves to abolish two Special Accounts, namely the Other Trust Moneys Account and the Services for other Governments and Non-agency Bodies Account, both of which were administered by the Department of the Environment, Water, Heritage and the Arts. The decision to abolish these accounts arises from a broader initiative to streamline the financial framework within the government. Instead of maintaining separate accounts for Other Trust Moneys and Services for other Governments and Non-agency Bodies, a new Special Account, the Services for Other Entities and Trust Moneys (SOETM) Special Account, has been established through Determination 2010/02. This new account will consolidate the purposes and balances of the two abolished accounts, thus making them redundant. The closure of the Other Trust Moneys Account and the Services for other Governments and Non-agency Bodies Account will take effect once their respective balances reach zero.
The obligations imposed by the Act on the entities governed by the Special Accounts include ensuring that all expenditures from these accounts are strictly aligned with the purposes specified in the determinations that established them. Given the abolition of the two accounts, the Department of the Environment, Water, Heritage and the Arts must facilitate the transfer of any remaining balances to the new SOETM Special Account. The Act also requires the Finance Minister to table a copy of the determination in each House of Parliament, in accordance with section 22 of the FMA Act. The Minister’s role in this process ensures transparency and adherence to parliamentary oversight, although it is important to note that the disallowance provisions do not apply to the abolition of Special Accounts.
Regarding the potential consequences of non-compliance, the Act does not explicitly outline specific offences or penalties for breaching the provisions related to Special Accounts. However, the failure to comply with the requirements of the Act could potentially lead to broader administrative and financial mismanagement issues, which might incur civil or criminal liabilities under other sections of the FMA Act or related legislation. The precise consequences would depend on the nature and extent of the breach, and might include corrective actions, financial penalties, or disciplinary measures against responsible officers or entities.