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 Human Services) Determination 2011/13
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 Human Services 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 Human Services 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 Human Services (DHS) 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
DHS 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 Services for Other Entities and Trust Moneys - Department of Human Services 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 Human Services Special Account | 2010-2011 | 0 | 0 | 0 | 0 |
2011-2012 | 0 | 4,486 | 3,731 | 755 |
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 Human Services) Determination 2011/13 was enacted under subsection 20(1) of the Financial Management and Accountability Act 1997 by the Minister for Finance and Deregulation. This legislation establishes a Special Account for the Department of Human Services, specifically the Services for Other Entities and Trust Moneys - Department of Human Services Special Account. This determination addresses the need for a dedicated account to manage funds on behalf of persons or entities other than the Commonwealth, facilitating the administration of small amounts of miscellaneous moneys such as those received for services performed for non-Agencies like other governments. The policy objective is to ensure proper financial management and accountability in the handling of these funds, as per the requirements set out in the Financial Management and Accountability Act. The establishment of this Special Account allows the Department of Human Services to continue its operations in holding and expending such funds under specified conditions, as outlined in the determination.
Scope and Application
The Financial Management and Accountability (Establishment of Special Account for Department of Human Services) Determination 2011/13 applies to the Services for Other Entities and Trust Moneys - Department of Human Services Special Account, which is established under subsection 20(1) of the Financial Management and Accountability Act 1997 (FMA Act). This Special Account is intended to allow the Department of Human Services (DHS) to hold and expend moneys on behalf of persons or entities other than the Commonwealth, such as other governments. This determination specifies the nature of amounts that may be credited to, and debited from, the Special Account, and it is supported by an appropriation under section 20 of the FMA Act. Any determination establishing a Special Account, including this one, must be tabled in each House of the Parliament, and either House may disallow it within five sitting days of tabling; if not disallowed, the determination comes into effect on the calendar day after the last day on which it could have been disallowed. However, the abolition of a Special Account by a determination of the Finance Minister is not subject to parliamentary disallowance. The purposes for which the Special Account can be debited are outlined in Clause 6 of the Determination, including primary purposes for expenditure and other permitted uses. The determination was developed with input from DHS, and no further consultation was considered necessary as it pertains to internal machinery of government.
Key Provisions
The Financial Management and Accountability (Establishment of Special Account for Department of Human Services) Determination 2011/13 (the Determination) establishes a new Special Account under the Financial Management and Accountability Act 1997 (FMA Act). This Special Account, named the Services for Other Entities and Trust Moneys - Department of Human Services Special Account (SOETM Special Account), is designed to allow the Department of Human Services (DHS) to hold and expend funds on behalf of persons or entities other than the Commonwealth. This includes small amounts of miscellaneous moneys and funds received for services performed for other governments. The establishment of this Special Account is pursuant to subsection 20(1) of the FMA Act and it will operate under the appropriation outlined in the Determination.
Under the Determination, the SOETM Special Account can be credited with and debited for specific purposes. Clause 6 of the Determination specifies the purposes for which the Special Account can be debited. Subclause 6(a) and (b) detail the primary purposes for expenditure from the Special Account. Subclause 6(c) allows the account to be debited in a manner that would otherwise be permitted by section 28 of the FMA Act, to simplify accounting for these transactions. Subclause 6(d) permits the balance of the Special Account to be reduced without a real or notional payment occurring, ensuring these amounts are not set aside indefinitely.
The Determination imposes obligations on the DHS to manage the SOETM Special Account in accordance with the terms set out in the Determination. This includes ensuring that funds are only credited to and debited from the account for the purposes specified in Clause 6. The Department must also ensure that any transactions are properly recorded and accounted for, in line with the Financial Management and Accountability Act 1997.
Any breaches of the provisions of the Determination could lead to civil or criminal consequences. Under the FMA Act, the Minister for Finance has the authority to investigate any misuse of funds or mismanagement of the Special Account. If any violations are found, appropriate actions may be taken, including financial penalties. The maximum penalties for breaches of the FMA Act can be substantial, reflecting the seriousness with which the Commonwealth treats financial mismanagement and breaches of accountability.