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 –Finance) Determination 2012/08
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 – Department of Finance and Deregulation.
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 – Department of Finance and Deregulation (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 – Finance) Determination 2012/08 was enacted to establish a Special Account within the Department of Finance and Deregulation under the Financial Management and Accountability Act 1997. This legislation was introduced to address the need for a consolidated Special Account to manage miscellaneous funds received on behalf of entities other than the Commonwealth. The Act was passed by the Australian Parliament and is overseen by the Minister for Finance and Deregulation, aiming to streamline the financial management and accountability of these funds by allowing the Department of Finance to continue holding and expending these amounts in a more organised manner.
The creation of the Services for Other Entities and Trust Moneys Special Account (SOETM) integrates the functions of the previously separate Other Trust Moneys and Services for Other Governments and Non-agency Bodies Special Accounts. This consolidation facilitates the handling of smaller, miscellaneous funds, such as those received from services rendered for other governments or entities, thereby enhancing the efficiency of financial operations within the Department. The Determination is subject to parliamentary scrutiny, ensuring transparency and accountability in its implementation.
Scope and Application
The Financial Management and Accountability (Establishment of SOETM Special Account – Finance) Determination 2012/08 applies to the establishment of a Services for Other Entities and Trust Moneys Special Account (SOETM) under the Financial Management and Accountability Act 1997 (FMA Act). This Special Account is intended for the Department of Finance and Deregulation and facilitates the holding and expenditure of funds on behalf of entities other than the Commonwealth, including other governments. The SOETM consolidates the purposes of two previous special accounts into one standard account, primarily used for miscellaneous small amounts. The Determination is subject to parliamentary disallowance procedures as outlined in the FMA Act, ensuring that the establishment and variation of Special Accounts are subject to scrutiny and accountability. Notably, the Determination exempts the SOETM from the disallowance and sunsetting provisions of the Legislative Instruments Act 2003, reflecting its specific nature and internal governmental purpose. Furthermore, a Statement of Compatibility with Human Rights is not required for this instrument, as it falls outside the scope of the disallowance under the Legislative Instruments Act 2003.
Key Provisions
The Financial Management and Accountability (Establishment of SOETM Special Account – Finance) Determination 2012/08, 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 – Department of Finance and Deregulation (SOETM). This account combines the functions of the Other Trust Moneys and the Services for Other Governments and Non-agency Bodies Special Accounts into one, allowing the Agency to manage and disburse funds on behalf of entities other than the Commonwealth (section 20). This includes handling small amounts of miscellaneous moneys, such as those received for services provided to other governments or non-agency bodies.
The establishment of the SOETM Special Account (section 20) is subject to certain procedural requirements outlined in the FMA Act. Firstly, the determination must be tabled in each House of the Parliament by the Finance Minister, as per section 22 of the FMA Act. There is a five-sitting-day window during which either House of Parliament can pass a resolution to disallow the determination. If no such resolution is passed within this period, the determination takes effect the day after the last possible day for disallowance. Additionally, subsection 20(6) of the FMA Act exempts determinations establishing Special Accounts from the operation of Part 6 (sunsetting) of the Legislative Instruments Act 2003, while subsection 20(7) exempts determinations abolishing Special Accounts from the operation of section 42 (disallowance) and Part 6 (sunsetting) of the same Act.
The determination imposes several obligations on the parties involved. Firstly, it mandates that all revenues or moneys raised or received by the Commonwealth must be deposited into the Consolidated Revenue Fund (CRF) as per the Constitution, and may not be spent without parliamentary appropriation (section 20). The SOETM Special Account, supported by such an appropriation, allows specific amounts to be credited and debited for designated purposes, ensuring that funds are managed and spent according to the established rules and requirements. This ensures that the account's activities remain transparent and accountable.
Failure to comply with the provisions of the FMA Act or the terms of the determination could result in various consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of financial management and accountability laws generally can lead to civil or criminal penalties. The exact penalties would depend on the nature and severity of the breach, but they can include fines and, in more serious cases, imprisonment. These potential consequences underscore the importance of adhering to the established financial management protocols and the legislative requirements governing the SOETM Special Account.