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 Special Account for AusAID) Determination 2011/05
Purpose of the Determination
The instrument is made under subsection 20 (1) of the Financial Management and Accountability Act 1997 (FMA Act) and establishes a Special Account entitled the Services for Other Entities and Trust Moneys - AusAID Special Account. It also specifies the nature of amounts that may be credited to, and the purposes for which amounts may be debited from, the Services for Other Entities and Trust Moneys - AusAID Special Account.
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, or vary determinations that establish Special Accounts, are subject to section 22 of the FMA Act. Section 22 of the FMA Act requires the Finance Minister to table a copy of the establishing or varying determination in each House of the Parliament. Either House may disallow a determination within five sitting days of tabling. If the determination is not disallowed, it comes into effect on the calendar day after the last day on which it could have been disallowed.
Regulation 10 of the Legislative Instruments Regulations 2004 preserves the disallowance provisions under section 22 of the FMA Act by exempting Special Account determinations from subsections 57(2) and 57(5) of the Legislative Instruments Act 2003.
Special Accounts can be abolished by a determination of the Finance Minister. However, such a determination is not subject to parliamentary disallowance.
Operation of this Determination
Reasons for establishing a new SOETM Special Account
Most agencies under the FMA Act administer either a Services for Other Entities and Trust Moneys (SOETM) Special Account or other Special Accounts that together encompass the purposes of a SOETM Special Account.
The SOETM Special Account will enable AusAID to continue to hold and expend amounts on behalf of persons or entities other than the Commonwealth.
Typically the SOETM Special Account will be used to accommodate small amounts of miscellaneous moneys. For example, the SOETM Special Account may be used to hold 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.
Clause 6 of the Determination specifies the purposes for which the Special Account can be debited.
- Subclauses 6 (a) and (b) describe the primary purposes for expenditure of amounts from the Special Account.
- Subclause 6 (c) allows the Special Account to the debited, in a manner that would otherwise be permitted by section 28 of the FMA Act. It is included to simplify accounting for these transactions.
- Subclause 6 (d) allows the balance of the Special Account to be reduced without a real or notional payment occurring. It is included to ensure that these amounts are not set aside indefinitely.
Consultation
AusAID is the Agency affected by this determination and was provided with an opportunity to comment on a draft of this instrument and to supply data for the “Estimates of Transactions Table”. As the instrument is for internal machinery of government purposes only, no consultation was considered necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).
Estimates of transactions on the Special Account
The table below outlines the estimated movement of appropriations within the Special Account.
| ($’000) |
Opening Balance | Credits(1) | Debits(2) | Closing Balance |
Services for Other Entities and Trust Moneys - AusAID Special Account | 2010-2011 | 0 | 2,954 | 0 | 2,954 |
2011-2012 | 2,954 | 12,000 | 12,000 | 2,954 |
Note: these figures are estimates for the 2010-2011 and the 2011-12 Financial Years provided by the responsible Agency.
(1) Reflects the anticipated amounts credited to the Special Account.
(2) Reflects the anticipated amounts debited from the Special Account.
Overview
The Financial Management and Accountability (Establishment of Special Account for AusAID) Determination 2011/05 was enacted to address the need for a dedicated account to manage services for other entities and trust monies on behalf of AusAID. This determination was made under the Financial Management and Accountability Act 1997 (FMA Act) by the Minister for Finance and Deregulation and tabled in Parliament in accordance with the Act. The primary objective of this determination is to establish a Special Account titled the Services for Other Entities and Trust Moneys - AusAID Special Account, which will enable AusAID to continue holding and expending funds on behalf of non-Commonwealth entities, such as other governments, while ensuring that these transactions comply with the Financial Management and Accountability Act. This Special Account will facilitate the management of small amounts of miscellaneous moneys that do not fall under other existing Special Accounts.
Scope and Application
The Financial Management and Accountability (Establishment of Special Account for AusAID) Determination 2011/05, made under the Financial Management and Accountability Act 1997, establishes a Special Account titled the Services for Other Entities and Trust Moneys - AusAID Special Account. This determination applies to the Australian Agency for International Development (AusAID) and outlines the nature of amounts that may be credited to and debited from this special account, which is supported by an appropriation under the Financial Management and Accountability Act. The primary purpose of this special account is to facilitate the holding and expenditure of funds on behalf of persons or entities other than the Commonwealth, such as other governments or private entities, typically for small amounts of miscellaneous moneys related to services performed. The establishment of this special account is necessary for AusAID to continue its functions without needing to involve other agencies, thereby streamlining the process and ensuring that funds are appropriately allocated and managed. The determination is subject to parliamentary disallowance under section 22 of the FMA Act, which requires the Finance Minister to table a copy in each House of Parliament within five sitting days, after which it can be disallowed if either House chooses to do so. If no disallowance occurs, the determination comes into effect on the calendar day following the last day for disallowance.
Key Provisions
The Financial Management and Accountability (Establishment of Special Account for AusAID) Determination 2011/05, made under section 20(1) of the Financial Management and Accountability Act 1997 (FMA Act), establishes a Special Account named the Services for Other Entities and Trust Moneys - AusAID Special Account. This account allows AusAID to manage funds on behalf of persons or entities other than the Commonwealth. The primary purpose of this Special Account is to facilitate the holding and expenditure of small, miscellaneous moneys, such as those received for services rendered to non-Commonwealth entities, including other governments.
Under this Determination, section 6 specifies the purposes for which the Special Account can be debited. Clause 6(a) and 6(b) outline the main uses of the funds within the account, while clause 6(c) allows for debiting in a manner consistent with section 28 of the FMA Act, aiming to simplify accounting processes. Clause 6(d) ensures that the balance of the account can be reduced without necessitating a real or notional payment, preventing indefinite holding of these amounts. The Special Account is supported by an appropriation under section 20 of the FMA Act, ensuring that all spending complies with parliamentary appropriations.
The Determination imposes several obligations on AusAID. Firstly, AusAID must adhere to the specified purposes for crediting and debiting the account as outlined in the Determination. This involves ensuring that all transactions within the Special Account are for the intended purposes and are properly recorded. AusAID is also required to maintain accurate records and provide regular updates on the account’s transactions, as demonstrated by the estimates provided in the "Estimates of Transactions Table". Additionally, the Finance Minister must table a copy of the establishing determination in each House of the Parliament, and either House may disallow the determination within five sitting days of tabling.
Failure to comply with the provisions of this Determination may result in legal and financial consequences. However, the Determination itself does not explicitly outline specific offences, penalties, or consequences for non-compliance. The overarching legal framework provided by the FMA Act, which governs financial management and accountability, would apply in such cases. Generally, breaches of the FMA Act can lead to disciplinary action, financial penalties, or other legal repercussions as deemed appropriate under the Act. The maximum penalties for such breaches can vary depending on the severity of the offence and are stipulated within the FMA Act.