EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2010/08 to abolish a Special Account
Purposes of Determination 2010/08
The attached instrument makes a determination under subsection 20 (3) of the Financial Management and Accountability Act 1997 (FMA Act) to abolish the Other Trust Moneys (OTM) Account, administered by the Department of Broadband, Communications and the Digital Economy.
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 2010/08
Reasons for abolishing the Special Account
A new Special Account, entitled the Services for Other Entities and Trust Moneys – Department of Broadband, Communications and the Digital Economy Special Account (SOETM Special Account), will be established in order to give effect to changes that are required to the OTM Account, but which are not practicable to be made by variation to the OTM Account due to the way in which its establishing determination was structured.
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, which established the OTM Account. This is because the format of the determination constrains the amount of information that can be included. Accordingly, a new Special Account is being established (Determination 2010/09) to provide for the continuation of the activities of the OTM Account, and to bring it in line with the structure of similar Special Accounts managed by a number of other agencies.
Effect of this Determination
The OTM Account is abolished by this Determination.
Consultation
The Department of Broadband, Communications and the Digital Economy 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 Other Trust Moneys Account
| 2009-10 ($’000) |
| Opening Balance | Credits | Debits | Closing Balance |
Other Trust Moneys Account | 0 | 0 | 0 | 0 |
Overview
The Financial Management and Accountability Act 1997 was enacted to provide a framework for the financial management and accountability of Commonwealth entities, ensuring transparency and compliance with the appropriation process. The Act facilitates the establishment of Special Accounts, which allow for the segregation of funds for specific purposes, subject to parliamentary oversight. Determination 2010/08, issued under the authority of the Minister for Finance and Deregulation, addresses the need to abolish the Other Trust Moneys (OTM) Account managed by the Department of Broadband, Communications and the Digital Economy. This abolition arises due to structural constraints in the initial determination that established the OTM Account, making it impractical to modify. Instead, a new Special Account, the Services for Other Entities and Trust Moneys – Department of Broadband, Communications and the Digital Economy Special Account (SOETM Special Account), will be established to continue the activities of the OTM Account while aligning with the structures of similar Special Accounts. The policy objective is to ensure the continued operation of the account while overcoming the limitations of the initial determination.
Scope and Application
The Financial Management and Accountability Act 1997 Determination 2010/08, issued under the authority of the Minister for Finance and Deregulation, pertains specifically to the abolition of the Other Trust Moneys (OTM) Account, which was administered by the Department of Broadband, Communications and the Digital Economy. This determination serves to eliminate a Special Account established under the FMA Act, reflecting structural changes required to align the account with the operational norms of similar accounts within other agencies. The abolition of the OTM Account is necessitated by the limitations of its initial determination, which restricts the ability to include necessary modifications. As per the FMA Act, the Finance Minister can establish or vary Special Accounts through a determination, subject to parliamentary disallowance, while the abolition of such accounts is exempt from this disallowance process. This determination affects the Commonwealth level, with no consultation required outside the specified agency due to its internal nature.
Key Provisions
Determination 2010/08, issued under the Financial Management and Accountability Act 1997 (FMA Act), seeks to abolish the Other Trust Moneys (OTM) Account, which was administered by the Department of Broadband, Communications and the Digital Economy (paragraphs 1 and 2). The OTM Account was a Special Account within the Consolidated Revenue Fund (CRF), where funds could only be spent pursuant to an appropriation by Parliament (paragraph 3). Special Accounts are established by a determination under section 20 of the FMA Act, and they are subject to parliamentary disallowance as per section 22 of the same Act (paragraphs 4 and 5). However, the abolition of a Special Account does not require parliamentary disallowance (paragraph 6).
The obligations and requirements imposed by this Determination on the affected parties are primarily administrative. The Department of Broadband, Communications and the Digital Economy must now transition to the newly established Services for Other Entities and Trust Moneys – Department of Broadband, Communications and the Digital Economy Special Account (SOETM Special Account) (paragraph 7). This transition includes ensuring all activities previously governed by the OTM Account are now managed under the new account. The department must also ensure compliance with any new provisions or requirements that come with the establishment of the SOETM Special Account (paragraph 8).
There are no direct offences, penalties, or civil/criminal consequences outlined in the Determination for the breach of its provisions. However, any misuse or misappropriation of funds under the new SOETM Special Account could result in criminal charges under other provisions of the FMA Act, such as section 26, which deals with the misuse of public money (paragraph 9). The penalties for such offences could include fines or imprisonment, as stipulated in the Crimes Act 1914 or other relevant legislation, depending on the severity of the breach (paragraph 10).