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 ComSuper) Determination 2011/06
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 - ComSuper 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 - ComSuper 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 ComSuper 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
ComSuper 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 - ComSuper Special Account | 2010-2011 | 0 | 1,524,530 | 0 | 1,524,530 |
2011-2012 | 1,524,530 | 1,085,539 | 1,082,154 | 3,385 |
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 ComSuper) Determination 2011/06 was enacted under subsection 20(1) of the Financial Management and Accountability Act 1997 by the Minister for Finance and Deregulation. This Determination was introduced to address the need for the Commonwealth Superannuation Corporation (ComSuper) to manage and expend amounts on behalf of entities other than the Commonwealth, including miscellaneous funds and services rendered to other governments. The establishment of a Special Account allows ComSuper to continue holding and expending these amounts, ensuring they are appropriately accounted for within the Consolidated Revenue Fund. This legislation ensures that ComSuper can meet its obligations and service other entities and trust monies without breaching the constitutional requirement that all Commonwealth funds must be appropriated by Parliament.
The creation of the Services for Other Entities and Trust Moneys - ComSuper Special Account was subject to consultation with ComSuper, as it is the agency directly affected by the determination. No further consultation was deemed necessary as the instrument pertains to internal government processes. The Determination outlines the anticipated transactions for the 2010-2011 and 2011-2012 financial years, providing a clear framework for the management of these funds. The primary purpose of this Special Account is to enable ComSuper to debit and credit amounts for specified purposes, facilitating the effective and lawful expenditure of these funds.
Scope and Application
The Financial Management and Accountability (Establishment of Special Account for ComSuper) Determination 2011/06 applies to the Commonwealth Superannuation Corporation (ComSuper) under the Financial Management and Accountability Act 1997. This determination establishes a Special Account, named the Services for Other Entities and Trust Moneys - ComSuper Special Account, which is intended to allow ComSuper to hold and expend amounts on behalf of entities other than the Commonwealth. This Special Account is used for managing small amounts of miscellaneous moneys, such as those received for services performed for other governments or entities. The Act mandates that the Finance Minister must table a copy of this determination in each House of Parliament, where it can be disallowed within five sitting days, unless action is taken, in which case it comes into effect. Special Accounts, including this one, are subject to appropriation under section 20 of the FMA Act, and while they can be abolished by a determination of the Finance Minister, such abolition is not subject to disallowance. The geographic reach of this determination is national, applying to the Commonwealth as a whole.
Key Provisions
The Financial Management and Accountability (Establishment of Special Account for ComSuper) Determination 2011/06 (Determination) establishes a Special Account entitled the Services for Other Entities and Trust Moneys - ComSuper Special Account under section 20(1) of the Financial Management and Accountability Act 1997 (FMA Act). The Special Account is designed to allow ComSuper to manage funds on behalf of entities other than the Commonwealth, particularly accommodating small amounts of miscellaneous moneys (Section 6). These could include funds received for services performed for other governments or non-FMA Act entities.
Under this Determination, the Services for Other Entities and Trust Moneys - ComSuper Special Account can be credited with specific amounts and debited for certain purposes. Clause 6(a) and 6(b) outline the primary purposes for expenditure, such as services performed for other entities. Clause 6(c) allows for the account to be debited in a manner consistent with section 28 of the FMA Act, facilitating accounting. Clause 6(d) permits the balance of the Special Account to be reduced without a real or notional payment occurring, ensuring these amounts are not held indefinitely.
The Determination imposes certain obligations on ComSuper as the responsible entity. It must ensure that the Special Account is used strictly for the purposes outlined in the Determination. Additionally, the Finance Minister is required to table the Determination in each House of the Parliament, with either House having the authority to disallow it within five sitting days (Section 22 of the FMA Act). The disallowance provisions are preserved by Regulation 10 of the Legislative Instruments Regulations 2004.
Failure to comply with the provisions of the Determination could result in civil or criminal consequences, depending on the nature and extent of the breach. The FMA Act includes various offences that could apply, such as improper use of public funds or failure to adhere to the established purposes of the Special Account. While the Determination itself does not specify maximum penalties, breaches of the FMA Act generally carry substantial fines and/or imprisonment, as outlined in the relevant sections of the Act.