Overview

The Financial Management and Accountability Act 1997 (FMA Act) is a key piece of legislation that governs the financial management practices of Commonwealth agencies in Australia. Enacted in 1997, the Act was introduced to ensure the responsible and efficient management of public funds, aligning with the overarching principle that all government revenue forms one Consolidated Revenue Fund and can only be spent under an appropriation made by the Parliament. The Act aims to provide a framework for financial accountability and transparency within the Commonwealth. The FMA Act is administered by the Parliament, with the Minister for Finance and Deregulation having the authority to issue determinations such as the one establishing a Special Account. The policy objective of this particular determination, which was introduced in 2010, is to facilitate the management of miscellaneous funds on behalf of persons or entities other than the Commonwealth, allowing for the segregation of these funds within a designated Special Account. Determination 2010/14 under the FMA Act establishes a Special Account for the Department of Families, Housing, Community Services and Indigenous Affairs, named the Services for Other Entities and Trust Moneys – Department of Families, Housing, Community Services and Indigenous Affairs Special Account. This Special Account is intended to hold and manage funds on behalf of other entities, including other governments and Comcare payments for workers’ compensation. The establishment of this account aims to streamline financial operations by allowing the Department to handle these funds separately from its core operations, thereby enhancing accountability and clarity in financial transactions. The determination specifies the nature of transactions permitted within the Special Account, ensuring they are in line with broader financial management principles and practices outlined in the FMA Act.

Scope and Application

The Financial Management and Accountability Act 1997 (FMA Act) Determination 2010/14 establishes a Special Account for the Department of Families, Housing, Community Services and Indigenous Affairs, specifically designated as the Services for Other Entities and Trust Moneys – Department of Families, Housing, Community Services and Indigenous Affairs Special Account. This Special Account is intended to manage and hold funds on behalf of persons or entities other than the Commonwealth, including miscellaneous small amounts received in connection with services rendered to other governments or from Comcare for workers’ compensation payments. The establishment of this account is in line with constitutional requirements that all government revenue forms part of the Consolidated Revenue Fund (CRF) and must be appropriated by law for expenditure. The Special Account, supported by an appropriation under section 20 of the FMA Act, facilitates the expenditure of funds for specified purposes outlined in the determination. The Minister for Finance and Deregulation must table the determination in each House of the Parliament, subject to potential disallowance within five sitting days. The account can be debited for specified purposes, including facilitating transactions under section 28 of the FMA Act and reducing the account balance without requiring a payment, thereby preventing indefinite retention of funds. The operation and management of this Special Account are subject to the FMA Act and the Legislative Instruments Act 2003, ensuring compliance with Australian financial management standards.

Key Provisions

The Determination 2010/14 under the Financial Management and Accountability Act 1997 (FMA Act) establishes a Special Account for the Department of Families, Housing, Community Services and Indigenous Affairs, named the Services for Other Entities and Trust Moneys – Department of Families, Housing, Community Services and Indigenous Affairs Special Account (section 1). This account is intended to hold and manage funds on behalf of entities other than the Commonwealth, typically for small amounts of miscellaneous moneys. Clause 5 of the Determination specifies that the Special Account can be debited for purposes such as holding amounts received for services performed for or on behalf of non-Commonwealth entities and amounts received from Comcare related to workers' compensation payments (subsection 5(a) and (b)). Furthermore, the account can be debited in a manner that would otherwise be permitted by section 28 of the FMA Act, and the balance can be reduced without a real or notional payment occurring (subsection 5(c) and (d)). The establishment of this Special Account imposes several obligations on the Department of Families, Housing, Community Services and Indigenous Affairs. Firstly, the account must be used strictly for the purposes outlined in the Determination, ensuring that all credits and debits align with the specified purposes. The Department is also required to maintain accurate records of all transactions, ensuring compliance with the FMA Act and any other relevant financial regulations. Additionally, the account must be supported by an appropriation under section 20 of the FMA Act, and any determination to establish or vary the account must be tabled in each House of the Parliament, subject to potential disallowance under section 22 of the FMA Act. Breaching the provisions of the Determination 2010/14 or mismanaging the Special Account can lead to significant consequences. If the account is used for unauthorised purposes or if there is mismanagement of funds, it could result in both civil and criminal liabilities. The maximum penalties for breaches of the FMA Act can include substantial fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any relevant jurisdictional laws. Additionally, disallowance of the determination by either House of the Parliament within five sitting days of tabling could prevent the account from coming into effect.