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 –Treasury) Determination 2012/09
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 the Treasury.
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 the Treasury (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 – Treasury) Determination 2012/09 was enacted under subsection 20(1) of the Financial Management and Accountability Act 1997 (FMA Act) to address the need for a unified account to manage funds held and expended on behalf of entities other than the Commonwealth. This determination was issued by the authority of the Minister for Finance and Deregulation and was designed to establish the Services for Other Entities and Trust Moneys Special Account within the Department of the Treasury. The purpose of this special account is to streamline the management of miscellaneous small amounts of money received in connection with services performed for other governments or non-agency bodies, thereby ensuring efficient financial management and accountability as required by the FMA Act. The determination outlines the framework for the special account, including its establishment, operation, and the legislative procedures governing its disallowance and tabling in Parliament.
Scope and Application
The Financial Management and Accountability (Establishment of SOETM Special Account – Treasury) Determination 2012/09 applies to the establishment of a Special Account within the Department of the Treasury, as stipulated under the Financial Management and Accountability Act 1997 (FMA Act). This Determination amalgamates the purposes of the Other Trust Moneys and the Services for Other Governments and Non-agency Bodies Special Accounts into the Services for Other Entities and Trust Moneys Special Account – Department of the Treasury (SOETM). The Act pertains to entities and persons that are not prescribed agencies under the FMA Act, allowing the Department of the Treasury to manage and disburse funds on their behalf, typically for miscellaneous small amounts received in connection with services rendered. This Special Account is subject to the constitutional requirement that all government revenues must form part of the Consolidated Revenue Fund and can only be expended under a parliamentary appropriation. The Determination is subject to disallowance under the FMA Act, which requires tabling in both Houses of Parliament and allows for disallowance within five sitting days if a resolution is passed. It also exempts such determinations from certain sections of the Legislative Instruments Act 2003, and does not require a Statement of Compatibility with Human Rights.
Key Provisions
The Financial Management and Accountability (Establishment of SOETM Special Account – Treasury) Determination 2012/09 (the Determination) establishes a Special Account named the Services for Other Entities and Trust Moneys Special Account – Department of the Treasury (SOETM). This Determination is made under subsection 20(1) of the Financial Management and Accountability Act 1997 (FMA Act) (section 2). The 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 (section 8). The SOETM enables the Agency to continue to hold and expend amounts on behalf of persons or entities other than the Commonwealth. The account will typically be used to accommodate small amounts of miscellaneous moneys, such as those 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 (section 8).
The Determination imposes certain obligations and requirements on the parties or entities it governs. It sets out the amounts that may be credited and the purposes for which the SOETM may be debited. The establishment of the SOETM is supported by an appropriation under section 20 of the FMA Act. The Determination also ensures that any moneys in the SOETM are spent in accordance with the purposes specified in the determination (section 4). Furthermore, the Determination is subject to the tabling and disallowance procedures in section 22 of the FMA Act, which 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 (section 4).
The Determination also outlines the consequences for breach, although no specific offences, penalties, or civil/criminal consequences are stated within the text. However, it is implied that any misuse or unauthorised expenditure from the SOETM would be subject to the relevant provisions of the FMA Act and any other applicable legislation. The FMA Act itself contains provisions for offences and penalties related to financial mismanagement or misconduct, which could potentially apply to breaches of the SOETM provisions. The maximum penalties for such offences under the FMA Act can include fines and imprisonment, depending on the severity of the offence (section 5).