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 Infrastructure and Transport) Determination 2011/08
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 Infrastructure and Transport 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 Infrastructure and Transport 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 Infrastructure and Transport 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 Infrastructure and Transport 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 Infrastructure and Transport Special Account | 2010-2011 | 0 | 409 | 0 | 409 |
2011-2012 | 409 | 0 | 0 | 409 |
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 Infrastructure and Transport) Determination 2011/08 was enacted in 2011 under the authority of the Financial Management and Accountability Act 1997. This legislation was introduced to address the need for the Department of Infrastructure and Transport to hold and expend moneys on behalf of entities other than the Commonwealth, particularly small amounts of miscellaneous moneys. The purpose of this determination is to establish a Special Account, specifically the Services for Other Entities and Trust Moneys - Department of Infrastructure and Transport Special Account, which will facilitate the holding and expenditure of these monies while ensuring compliance with financial management standards. The determination outlines the permissible credits and debits to the account, and mandates that any establishment or variation of such accounts must be tabled in Parliament, subject to potential disallowance. This ensures transparency and accountability in the financial operations of the department.
Scope and Application
The Financial Management and Accountability (Establishment of Special Account for Department of Infrastructure and Transport) Determination 2011/08 applies specifically to the Department of Infrastructure and Transport, establishing a Special Account for holding and managing funds on behalf of entities other than the Commonwealth. This includes monies received for services performed for other governments or entities. The establishment of this Special Account is under the authority of the Financial Management and Accountability Act 1997, ensuring that the account is supported by an appropriation and subject to parliamentary oversight as required by section 22 of the Act. This Determination allows the Department to continue its existing practices of managing miscellaneous funds through a dedicated account, facilitating clear accounting and expenditure for these purposes. The Determination also outlines the permissible debits from the account, ensuring that it is used strictly for its intended purposes. The Special Account is not subject to disallowance once it is established, although it can be abolished by a separate determination from the Finance Minister.
Key Provisions
The Financial Management and Accountability (Establishment of Special Account for Department of Infrastructure and Transport) Determination 2011/08, made under subsection 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 - Department of Infrastructure and Transport Special Account. This account is designed to facilitate the Department of Infrastructure and Transport's management of funds on behalf of other entities, which are not agencies under the FMA Act. This includes funds received from services performed for or on behalf of non-government entities, such as other governments or private organisations. The account allows the Department to credit and debit funds for specific purposes, as outlined in the determination.
Under the FMA Act, all Commonwealth revenues are deposited into the Consolidated Revenue Fund (CRF), and expenditures are only authorised through parliamentary appropriation. Special Accounts like this one allow for specific purposes to be funded within the CRF. The establishment of this Special Account is subject to certain parliamentary procedures, including the requirement for the Finance Minister to table the determination in each House of Parliament, as per section 22 of the FMA Act. If neither House disallows the determination within five sitting days, it comes into effect on the day following the final disallowance period.
The Special Account is governed by specific rules regarding the crediting and debiting of funds. Clause 6 of the determination specifies the purposes for which the account can be debited, primarily for the services performed for or on behalf of other entities, as detailed in subclauses 6(a) and 6(b). Subclause 6(c) allows for debits in a manner consistent with section 28 of the FMA Act, facilitating simplified accounting for these transactions. Subclause 6(d) permits the account balance to be reduced without a formal payment, ensuring these funds are not retained indefinitely. These provisions ensure that the account is used appropriately and efficiently for its intended purposes.
The determination outlines potential financial transactions for the Special Account over the 2010-2011 and 2011-2012 financial years, as estimated by the Department of Infrastructure and Transport. For the 2010-2011 financial year, the account is projected to open with a balance of $409,000 and close with a balance of $409,000 after credits of $0 and debits of $0. For the 2011-2012 financial year, the account is expected to open with a balance of $409,000, with credits of $0 and debits of $409,000, resulting in a closing balance of $0. These estimates reflect the expected movement of funds within the account over the specified period. Failure to comply with the provisions of this determination could lead to financial mismanagement and may result in civil or criminal penalties under the FMA Act.