EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Financial Management and Accountability (Establishment of SOETM Special Account – AHRC) Determination 2012/05
Purpose of the Determination
The Determination is made under subsection 20(1) of the Financial Management and Accountability Act 1997 (FMA Act) and establishes a Special Account entitled Services for other Entities and Trust Moneys Special Account – Australian Human Rights Commission.
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 under subsection 20(1) of the FMA Act or vary Special Accounts under subsection 20(2) of the FMA Act are subject to the tabling and disallowance procedures in section 22 of the FMA Act. Section 22 of the FMA Act requires the Finance Minister to table a copy of the determination in each House of the Parliament. Either House may pass a resolution disallowing a determination within five sitting days of tabling. If the determination is not disallowed, it comes into effect on the day immediately after the last day on which it could have been disallowed.
Subsection 20(6) of the FMA Act exempts determinations that establish Special Accounts under subsection 20(1) of the FMA Act or vary Special Accounts under subsection 20(2) of the FMA Act from the operation of Part 6 (sunsetting) of the Legislative Instruments Act 2003.
Subsection 20(7) of the FMA Act exempts determinations that abolish Special Accounts under subsection 20(3) of the FMA Act from the operation of section 42 (disallowance) and Part 6 (sunsetting) of the Legislative Instruments Act 2003.
A Statement of Compatibility with Human Rights is not required for this legislative instrument. Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires a Statement of Compatibility with Human Rights for all legislative instruments subject to disallowance under section 42 of the Legislative Instruments Act 2003. While legislative instruments made or varied under subsections 20(1) or 20(2) of the FMA Act are subject to disallowance under section 22 of the FMA Act they are not subject to disallowance under section 42 of the Legislative Instruments Act 2003. Legislative instruments made under subsection 20(3) of the FMA Act are exempt from disallowance under subsection 20(7) of the FMA Act, as such a Statement of Compatibility with Human Rights is not required.
Operation of this Determination
The Services for other Entities and Trust Moneys Special Account – Australian Human Rights Commission (SOETM) combines the purposes of the Other Trust Moneys and the Services for other Governments and Non-agency Bodies Special Accounts into a single standard purpose Special Account. The SOETM enables the Agency to continue to hold and expend amounts on behalf of persons or entities other than the Commonwealth. Typically the SOETM will be used to accommodate small amounts of miscellaneous moneys. For example, amounts received in connection with services performed for or on behalf of any persons or entities that are not Agencies as prescribed under the FMA Act, such as other governments.
Consultation
The Agency affected by this determination was given an opportunity to comment on the instrument.
As the instrument is for internal machinery of government purposes only, no consultation was necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).
Overview
The Financial Management and Accountability (Establishment of SOETM Special Account – AHRC) Determination 2012/05, enacted under the Financial Management and Accountability Act 1997, establishes a Special Account for the Australian Human Rights Commission (AHRC) to manage and disburse funds on behalf of entities other than the Commonwealth. This determination aims to streamline financial management by consolidating the functions of the Other Trust Moneys and Services for other Governments and Non-agency Bodies Special Accounts into a single account. It ensures that the AHRC can continue to handle and disburse funds for services provided to non-Commonwealth entities, such as other governments, thereby maintaining financial accountability and efficiency. The determination was subject to parliamentary procedures, requiring the Finance Minister to table it in both Houses of Parliament, allowing for a potential disallowance period of five sitting days.
Scope and Application
The Financial Management and Accountability (Establishment of SOETM Special Account – AHRC) Determination 2012/05, made under the Financial Management and Accountability Act 1997, establishes a Special Account known as the Services for other Entities and Trust Moneys Special Account – Australian Human Rights Commission. This account serves as a mechanism for the Australian Human Rights Commission to manage and expend funds on behalf of entities other than the Commonwealth government, such as other governments and non-agency bodies. The account allows for the holding and spending of miscellaneous monies that are not related to services provided to Commonwealth agencies. The establishment of this Special Account is subject to parliamentary procedures, including tabling and disallowance as outlined in the FMA Act. Notably, this Determination is exempt from certain provisions of the Legislative Instruments Act 2003, such as disallowance and sunsetting, and does not require a Statement of Compatibility with Human Rights. The creation of this Special Account streamlines the management of trust and miscellaneous funds by consolidating the functions of previously separate accounts into a single, standardised purpose account.
Key Provisions
The Financial Management and Accountability (Establishment of SOETM Special Account – AHRC) Determination 2012/05 (the Determination) establishes a Special Account for the Australian Human Rights Commission (AHRC) under subsection 20(1) of the Financial Management and Accountability Act 1997 (FMA Act). This Special Account is called the Services for other Entities and Trust Moneys Special Account – Australian Human Rights Commission (SOETM). It combines the purposes of two other Special Accounts, namely the Other Trust Moneys and the Services for other Governments and Non-agency Bodies Special Accounts, into one. The main operative sections of the Determination are those which establish the SOETM and specify its purpose, as well as the provisions for consultation and disallowance (sections 1 to 5).
The obligations and requirements imposed by the Determination on the AHRC primarily involve the proper management and accounting of the funds held in the SOETM. The AHRC must ensure that the funds in the SOETM are used strictly for the purposes outlined in the Determination, which is to hold and expend amounts on behalf of persons or entities other than the Commonwealth, such as other governments. The AHRC is also required to maintain accurate records and accounts of all transactions involving the SOETM, in compliance with the Financial Management and Accountability Act 1997. Additionally, the Determination mandates that the AHRC must report on the use of the SOETM as part of its annual financial reporting obligations.
Breach of the requirements set out in the Determination can lead to various civil and criminal consequences, depending on the nature and severity of the breach. Under the FMA Act, any person who misappropriates public money, including funds held in a Special Account, may be guilty of an offence. Such an offence can result in a penalty of up to 10 years imprisonment, a fine of up to $66,000, or both. Furthermore, if the AHRC fails to comply with its financial reporting obligations, it may be subject to administrative penalties, including fines. The specific penalties for breaches of the FMA Act are outlined in the Act itself, which provides for a range of sanctions depending on the seriousness of the breach.