EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Determination 2010/12 to abolish a Special Account
Purposes of Determination 2010/12
The attached instrument makes a determination under subsection 20 (3) of the Financial Management and Accountability Act 1997 (FMA Act) to abolish the Childcare Centre Capital Replacement and Upgrade Special Account, administered by the Department of Education, Employment and Workplace Relations.
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. Such a determination is not subject to parliamentary disallowance.
Operation of Determination 2010/12
Reasons for abolishing the Special Account
The Department of Education, Employment and Workplace Relations has advised that the Childcare Centre Capital Replacement and Upgrade Special Account has not been used since 2003-04 and is not expected to be used into the future.
Effect of this Determination
The Childcare Centre Capital Replacement and Upgrade Special Account is abolished by this Determination.
Consultation
The Department of Education, Employment and Workplace Relations 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 Childcare Centre Capital Replacement and Upgrade Special Account
| 2009-10 ($’000) |
| Opening Balance | Credits | Debits | Closing Balance |
Childcare Centre Capital Replacement and Upgrade Special Account | 0 | 0 | 0 | 0 |
Overview
The Financial Management and Accountability Act 1997 was enacted to ensure effective financial management and accountability within the Australian Government. The Act provides the legislative framework for the management of public funds and requires appropriations by Parliament for the spending of public moneys. Determination 2010/12, issued under the authority of the Minister for Finance and Deregulation, addresses the need to abolish the Childcare Centre Capital Replacement and Upgrade Special Account, which had not been used since 2003-04 and was not expected to be used in the future. The Special Account was established to allow for the appropriation of funds for specific purposes, but its continued existence was deemed unnecessary by the Department of Education, Employment and Workplace Relations. This Determination aligns with the policy objective of the FMA Act to ensure that public funds are only spent in accordance with the appropriation by Parliament, and that government resources are utilised efficiently and effectively.
Scope and Application
The Financial Management and Accountability Act 1997 (FMA Act) governs the financial management of the Commonwealth of Australia, including the establishment and abolition of Special Accounts through determinations by the Minister for Finance and Deregulation. This Act applies to all government entities, including departments, agencies, and statutory authorities, and regulates the allocation and expenditure of funds from the Consolidated Revenue Fund. The Childcare Centre Capital Replacement and Upgrade Special Account, administered by the Department of Education, Employment and Workplace Relations, was established under this Act to facilitate specific expenditures related to childcare centre capital replacement and upgrades. The abolition of this Special Account, as determined in 2010, is justified by the account's inactivity since 2003-04 and its anticipated lack of future use. This determination is made under subsection 20(3) of the FMA Act and is exempt from parliamentary disallowance, coming into effect immediately after the disallowance period. The geographical reach of this Act is national, applying to all Commonwealth entities across Australia.
Key Provisions
The Financial Management and Accountability Act 1997 (FMA Act) allows the establishment of Special Accounts by determination, which facilitate the allocation of funds from the Consolidated Revenue Fund (CRF) for specific purposes, subject to appropriation (section 20(3)). The Childcare Centre Capital Replacement and Upgrade Special Account, administered by the Department of Education, Employment and Workplace Relations, has been abolished by the Determination 2010/12 under subsection 20(3) of the FMA Act. This Special Account, which had not been used since 2003-04, has been deemed unnecessary for future use by the administering department.
The obligations imposed by the FMA Act on the Finance Minister regarding the establishment or abolition of Special Accounts include the requirement to table any establishing or varying determinations in each House of the Parliament (section 22). This process allows either House to disallow the determination within five sitting days of tabling, but if not disallowed, the determination comes into effect on the calendar day after the last day on which it could have been disallowed. Notably, the abolition of a Special Account by determination is exempt from disallowance (Regulation 10 of the Legislative Instruments Regulations 2004).
In terms of consequences for breach, the FMA Act does not explicitly detail specific offences or penalties for the improper handling of Special Accounts or their abolition. However, the act operates within the broader framework of financial management and accountability in Australia, and any mismanagement could potentially lead to scrutiny or action under other relevant financial and administrative laws. The determination itself does not introduce new penalties but rather addresses the administrative aspect of account management within the existing legislative framework.