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 – ATO) Determination 2012/15
Purpose of the Determination
The Determination is made under subsection 20(1) of the Financial Management and Accountability Act 1997 (FMA Act) establishes a Special Account entitled Services for Other Entities and Trust Moneys Special Account – Australian Taxation Office.
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 Taxation Office (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 – ATO) Determination 2012/15 was enacted to address the need for a streamlined account to manage miscellaneous funds on behalf of entities other than the Commonwealth. This Determination was introduced under the Financial Management and Accountability Act 1997 (FMA Act) by the Minister for Finance and Deregulation, with the Parliament being the enacting body. The policy objective is to establish a Special Account that facilitates the management of small, miscellaneous funds typically received in connection with services performed for or on behalf of non-agency bodies. This account, known as the Services for Other Entities and Trust Moneys Special Account – Australian Taxation Office (SOETM), consolidates the purposes of the Other Trust Moneys and the Services for Other Governments and Non-agency Bodies Special Accounts into a single account, enhancing efficiency and accountability in financial management.
Scope and Application
The Financial Management and Accountability (Establishment of SOETM Special Account – ATO) Determination 2012/15 pertains to the establishment of a Special Account within the Australian Taxation Office (ATO) under the Financial Management and Accountability Act 1997 (FMA Act). This determination specifically establishes the Services for Other Entities and Trust Moneys Special Account (SOETM) which facilitates the ATO in holding and spending moneys on behalf of entities other than the Commonwealth. It consolidates the purposes of the previously separate Other Trust Moneys and Services for Other Governments and Non-agency Bodies Special Accounts into one account designed for miscellaneous small amounts. The account is supported by an appropriation under section 20 of the FMA Act and allows for the spending of funds from the Consolidated Revenue Fund for specified purposes outlined in the determination. The determination is subject to the tabling and disallowance procedures in section 22 of the FMA Act, and it is exempt from the operation of Part 6 (sunsetting) of the Legislative Instruments Act 2003. Additionally, a Statement of Compatibility with Human Rights is not required for this legislative instrument as it is exempt from disallowance under section 42 of the Legislative Instruments Act 2003.
Key Provisions
The Financial Management and Accountability (Establishment of SOETM Special Account – ATO) Determination 2012/15 establishes a Special Account under the Financial Management and Accountability Act 1997 (FMA Act), specifically the Services for Other Entities and Trust Moneys Special Account – Australian Taxation Office (SOETM). This account is designed to combine the purposes of two previous accounts into one, facilitating the handling of funds received on behalf of entities other than the Commonwealth. According to section 20(1) of the FMA Act, Special Accounts can be created by a determination that specifies the amounts that may be credited to and debited from the account, subject to parliamentary oversight as per section 22 of the FMA Act. The SOETM is intended for small amounts of miscellaneous moneys, such as those received for services provided to other governments or non-agency bodies.
The establishment of the SOETM imposes certain obligations on the Australian Taxation Office (ATO). These obligations include the management and accounting of funds within the SOETM in accordance with the determination, ensuring that all transactions are appropriately recorded and reported. The ATO must also adhere to the FMA Act's requirement that all expenditures from the Consolidated Revenue Fund must be authorised by an appropriation made by the Parliament. Furthermore, the ATO is required to ensure that the purpose and use of the SOETM remain aligned with the objectives outlined in the determination, and to maintain records and documentation that justify the crediting and debiting of funds within the account.
Failure to comply with the provisions of the Determination, or any other requirements under the FMA Act, can lead to various consequences. While specific offences and penalties are not detailed within the determination itself, breaches of the FMA Act generally can attract criminal and civil penalties. For instance, section 25 of the FMA Act allows for a penalty of up to two years imprisonment for certain breaches, while section 26 outlines civil penalties that can be applied, including fines of up to 10,000 penalty units for individuals and 50,000 penalty units for bodies corporate, depending on the severity and intent behind the breach. The ATO is also subject to internal and external audits to ensure compliance with financial management requirements, and any findings of non-compliance could lead to further scrutiny and corrective actions.