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 the House of Representatives) Determination 2011/10
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 the House of Representatives 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 the House of Representatives 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 the House of Representatives 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 the House of Representatives 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 the House of Representatives Special Account | 2010-2011 | 0 | 140 | 0 | 140 |
2011-2012 | 140 | 6 | 6 | 140 |
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 the House of Representatives) Determination 2011/10 was enacted to establish a Special Account for the Department of the House of Representatives to manage miscellaneous funds and trust monies. The 2011 Determination was made under subsection 20(1) of the Financial Management and Accountability Act 1997 and 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 the House of Representatives Special Account. This Determination aims to streamline the financial management of the Department of the House of Representatives by allowing it to hold and expend funds on behalf of persons or entities other than the Commonwealth. The enacting body for this Determination was the Minister for Finance and Deregulation, with the policy objective to provide a structured and accountable mechanism for handling trust and miscellaneous funds within the Department of the House of Representatives.
Scope and Application
The Financial Management and Accountability (Establishment of Special Account for Department of the House of Representatives) Determination 2011/10 establishes a Special Account named the Services for Other Entities and Trust Moneys - Department of the House of Representatives Special Account, under the Financial Management and Accountability Act 1997. This account is specifically designed for the Department of the House of Representatives to manage and disburse funds on behalf of entities other than the Commonwealth Government, such as other governments, in connection with services provided. The account is intended to accommodate small, miscellaneous amounts of money that would otherwise be part of the Consolidated Revenue Fund. The establishment of this account is in compliance with constitutional requirements, ensuring that all government funds are subject to parliamentary appropriation, with the Special Account supported by an appropriation under section 20 of the FMA Act. This determination is subject to disallowance by either House of Parliament within five sitting days of tabling, in accordance with section 22 of the FMA Act, ensuring parliamentary oversight over the use of Commonwealth funds.
The operation of this Special Account is outlined in Clause 6 of the Determination, detailing the purposes for which the account can be debited, including specific provisions for expenditure on services for other entities, and measures to facilitate accounting for certain transactions as permitted by section 28 of the FMA Act. Furthermore, the account allows for the reduction of its balance without necessitating a real or notional payment, ensuring these funds are not set aside indefinitely. This determination is a tool for internal government machinery, and while the Department of the House of Representatives was consulted, no further consultation was considered necessary as the instrument does not affect the public directly.
Key Provisions
The Financial Management and Accountability (Establishment of Special Account for Department of the House of Representatives) Determination 2011/10 (the Determination) establishes a Special Account for the Department of the House of Representatives, named the Services for Other Entities and Trust Moneys - Department of the House of Representatives Special Account (subsection 1). This Special Account allows the Department to hold and manage funds on behalf of entities other than the Commonwealth government. The Determination specifies the types of transactions that can be credited to or debited from this account (subsection 6).
The primary obligations imposed by the Determination are related to the management of funds within the Special Account. The Department of the House of Representatives is required to ensure that amounts credited to the account are for the purposes specified in the Determination, and that amounts debited from the account are for permissible purposes as outlined in subsection 6 (subsection 6(a)-(d)). The Department must also ensure that the balance of the account is appropriately managed and not left indefinitely unutilised (subsection 6(d)).
There are no specific offences, penalties, or civil/criminal consequences detailed within the Determination itself for breaches of its provisions. However, any misuse or mismanagement of funds within the Special Account would be subject to the general provisions of the Financial Management and Accountability Act 1997 (FMA Act) and any applicable financial regulations. Such breaches could potentially result in disciplinary action against individuals, financial penalties, or other legal consequences as prescribed by relevant laws. The disallowance mechanism under section 22 of the FMA Act provides a parliamentary safeguard against the operation of invalid or unauthorised determinations, ensuring compliance with legislative requirements.