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 – ASIC) Determination 2012/07
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 Securities and Investments 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 Securities and Investments 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 – ASIC) Determination 2012/07, enacted under the Financial Management and Accountability Act 1997, was introduced to establish a Special Account for the Australian Securities and Investments Commission (ASIC) for handling services provided to other entities and trust monies. This determination is designed to streamline the handling of small, miscellaneous amounts typically received in connection with services performed for or on behalf of entities other than Commonwealth agencies. The determination was made by the Minister for Finance and Deregulation and was subject to the tabling and disallowance procedures outlined in the Act, ensuring parliamentary scrutiny. The policy objective is to provide a structured financial mechanism within the Consolidated Revenue Fund, allowing specific appropriations for the purposes outlined in the determination, thereby enhancing financial management and accountability.
Scope and Application
The Financial Management and Accountability (Establishment of SOETM Special Account – ASIC) Determination 2012/07 applies to the Australian Securities and Investments Commission (ASIC) and establishes a Special Account named the Services for Other Entities and Trust Moneys Special Account – Australian Securities and Investments Commission. This Special Account facilitates the holding and expenditure of funds on behalf of entities other than Commonwealth agencies, such as other governments, in line with the purposes of the Other Trust Moneys and the Services for other Governments and Non-agency Bodies Special Accounts. The account is supported by an appropriation under section 20 of the Financial Management and Accountability Act 1997, and the determination must be tabled in both Houses of the Parliament, with a disallowance period of five sitting days. The Special Account allows amounts from the Consolidated Revenue Fund to be spent for specified purposes, exempting the determination from the sunsetting provisions of the Legislative Instruments Act 2003 and from the requirement for a Statement of Compatibility with Human Rights. The ASIC was consulted regarding the instrument, but no further consultation was necessary as the instrument is for internal government purposes only.
Key Provisions
The Financial Management and Accountability (Establishment of SOETM Special Account – ASIC) Determination 2012/07, made under subsection 20(1) of the Financial Management and Accountability Act 1997 (FMA Act), establishes a Special Account titled "Services for Other Entities and Trust Moneys Special Account – Australian Securities and Investments Commission" (SOETM). This account combines the purposes of the Other Trust Moneys and the Services for Other Governments and Non-agency Bodies Special Accounts into a single entity. It allows the Australian Securities and Investments Commission (ASIC) to manage funds on behalf of persons or entities other than the Commonwealth, particularly for small miscellaneous amounts. This consolidation simplifies the management of these funds by integrating their purposes into one account.
Entities governed by this Act, particularly ASIC, are obligated to ensure that the funds in the SOETM are used strictly for the purposes outlined in the Determination. This includes holding and expending moneys on behalf of other governments and non-agency bodies, as well as managing trust monies received in connection with services provided to or on behalf of these entities. The account must be managed in accordance with the appropriation specified in the Determination and must adhere to the financial management requirements set out in the FMA Act.
Failure to comply with the provisions of this Determination can lead to various consequences. Under the FMA Act, any misuse or unauthorised expenditure from the SOETM could be considered a breach of the Act's financial management principles. While specific offences and penalties are not detailed in the Determination, breaches of the FMA Act can generally lead to civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach. The SOETM Determination itself is subject to disallowance procedures under section 22 of the FMA Act, which allows either House of Parliament to pass a resolution to disallow the determination within five sitting days of it being tabled. If not disallowed, the Determination comes into effect on the day immediately after the disallowance period ends.