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 Department of Health and Ageing) Determination 2011/07
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 - Department of Health and Ageing 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 - Department of Health and Ageing 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 the Department of Health and Ageing 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
The Department of Health and Ageing 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 - Department of Health and Ageing Special Account | 2010-2011 | 0 | 44,453 | 0 | 44,453 |
2011-2012 | 44,453 | 27,120 | 23,177 | 48,396 |
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 Department of Health and Ageing) Determination 2011/07 was enacted under subsection 20(1) of the Financial Management and Accountability Act 1997. This determination, issued by the Minister for Finance and Deregulation, establishes a Special Account called the Services for Other Entities and Trust Moneys - Department of Health and Ageing Special Account. This new Special Account is designed to enable the Department of Health and Ageing to manage and disburse funds on behalf of persons or entities other than the Commonwealth. The primary purpose of this legislation is to allow the Department to hold and spend moneys for entities such as other governments, thereby ensuring compliance with the financial management requirements set out in the Financial Management and Accountability Act 1997.
Clause 6 of the determination specifies the purposes for which the Special Account can be debited, including the primary purposes for expenditure and other provisions that allow for the simplification of accounting and the non-indefinite holding of funds. This determination provides a structured and accountable framework for the Department of Health and Ageing to manage these funds effectively. The Financial Management and Accountability Act 1997, overseen by the Parliament, aims to ensure that all Commonwealth revenues and expenditures are managed in accordance with parliamentary appropriations, and this determination further supports that objective by detailing specific account management practices.
Scope and Application
The Financial Management and Accountability (Establishment of Special Account for Department of Health and Ageing) Determination 2011/07 pertains to the establishment of a Special Account, specifically the Services for Other Entities and Trust Moneys - Department of Health and Ageing Special Account, under the Financial Management and Accountability Act 1997 (FMA Act). This determination applies directly to the Department of Health and Ageing, enabling it to manage and disburse funds on behalf of persons or entities other than the Commonwealth. Such entities typically include other governments and miscellaneous small amounts of money. The Special Account allows these funds to be held and expended as specified in the determination, with the overarching aim of providing a streamlined and efficient mechanism for managing these funds within the constraints of the Consolidated Revenue Fund (CRF) and parliamentary appropriations. This determination also outlines the nature of transactions that can be credited to or debited from the account, ensuring compliance with the Financial Management and Accountability Act.
The establishment of this Special Account is subject to the provisions of the FMA Act, including parliamentary oversight as required by section 22 of the Act. This provision mandates that the Finance Minister must present the determination to both Houses of Parliament, allowing for a five-day period during which either House may disallow the determination. If no disallowance occurs, the determination comes into effect on the day after the last possible day for disallowance. Notably, while Special Accounts can be abolished by a determination of the Finance Minister, such abolition is not subject to disallowance. The operation of this determination is instrumental in ensuring that the Department of Health and Ageing can continue its functions without interruption, whilst maintaining strict adherence to financial management protocols.
Key Provisions
The Financial Management and Accountability (Establishment of Special Account for Department of Health and Ageing) Determination 2011/07 (the Determination) establishes a Special Account for the Department of Health and Ageing, specifically titled the Services for Other Entities and Trust Moneys – Department of Health and Ageing Special Account (paragraph 1). This account is intended to facilitate the handling and expenditure of funds on behalf of persons or entities other than the Commonwealth, such as other governments, as outlined in Clause 6 of the Determination (paragraph 3). The primary purposes for expenditure from this account, as described in subclauses 6(a) and 6(b), are to allow for the holding and management of small amounts of miscellaneous moneys and to ensure that these funds are used in accordance with specified legislative provisions. Additionally, subclauses 6(c) and 6(d) provide for simplified accounting and the eventual reduction of the account balance, respectively, ensuring that funds are not set aside indefinitely.
Under this Determination, the Department of Health and Ageing is obligated to manage the Special Account in accordance with the specified purposes and provisions outlined in the Determination (paragraph 2). This includes ensuring that all credits and debits to the account are appropriately authorised and documented. The account is supported by an appropriation under section 20 of the Financial Management and Accountability Act 1997 (FMA Act), and the Determination is subject to parliamentary disallowance under section 22 of the FMA Act (paragraph 4). The Department of Health and Ageing was provided with an opportunity to comment on the draft of this instrument, and no further consultation was deemed necessary as the instrument pertains to internal government machinery (paragraph 5).
The Determination does not explicitly outline specific offences, penalties, or consequences for breach. However, any misuse or unauthorised expenditure from the Special Account could potentially lead to violations of the FMA Act, which may result in civil or criminal penalties as prescribed under other relevant legislation. The specific penalties would depend on the nature and severity of the breach, but they could include fines, imprisonment, or other legal consequences as determined by the applicable laws and regulations (paragraph 6).