EXPLANATORY STATEMENT
Issued by the authority of the Minister for Finance and Deregulation
Financial Management and Accountability Act 1997
Financial Management and Accountability (Variation and Abolition of Special Accounts of the Department of Human Services) Determination 2011/12
Purpose of the Determination
The instrument is made under subsection 20(2) of the Financial Management and Accountability Act 1997 (FMA Act) and varies the following Special Accounts:
- Other Trust Moneys – Department of Human Services Special Account;
- Commonwealth Service Delivery Agency Other Trust Moneys Account (operated by Centrelink), and
- Services for Other Entities and Trust Moneys – Medicare Australia 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.
Operation of this Determination
The instrument abolishes three Special Accounts which will become redundant to requirements, following a merger of Medicare Australia and Centrelink with the Department of Human Services (DHS), which is expected to occur on 1 July 2011.
The Determination will allow any remaining balance to be debited from the:
- Other Trust Moneys – Department of Human Services Special Account; and
- Commonwealth Service Delivery Agency Other Trust Moneys Account (operated by Centrelink); and
- Services for Other Entities and Trust Moneys – Medicare Australia Special Account
to be credited to the new Services for Other Entities and Trust Monies – Department of Human Services Special Account. Subsequently, the above listed three Special Accounts will be abolished on the earlier of when the balances reach zero and 31 December 2011. Any balance existing on 31 December 2011 will be remitted to the CRF.
Effect of this Determination
There may be four Special Accounts with similar purposes operating for a short period of time, until remaining balances are credited to the Services for Other Entities and Trust Monies – Department of Human Services Special Account.
Consultation
DHS, Medicare Australia and Centrelink are Agencies affected by this instrument. The Agencies were provided with drafts of the instrument and agree with the form of the instrument. DHS supplied data for the “Table of Balances and Transactions” (below). As the instrument is for internal machinery of government purposes only, no consultation was necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003).
Table of Balances and Transactions of the abolished Special Accounts
The table below outlines the estimated financial implicatons of the determination on the balance of the Special Accounts.
Special Account | 2010-2011 ($’000) |
Opening Balance | Credits(1) | Debits(2) | Closing Balance |
Commonwealth Service Delivery Agency Other Trust Moneys Account (operated by Centrelink) | 123 | (123) | 0 | 0 |
Other Trust Moneys – Department of Human Services Special Account | 0 | 0 | 0 | 0 |
Services for Other Entities and Trust Moneys – Medicare Australia Special Account | 99 | 1,470 | 1,569 | 0 |
Note: these figures are actuals for the 2010-2011 Financial Year provided by each of responsible Agencies. As such, these figures may differ from the budgeted amounts published in Agency Resourcing Budget Paper No. 4 2010-2011.
(1) Reflects the net result of credits and debits to the Special Account for the 2010-2011 Financial Year
(2) Reflects the anticipated amount to be transferred to a replacement SOETM for DHS.
Overview
The Financial Management and Accountability (Variation and Abolition of Special Accounts of the Department of Human Services) Determination 2011/12 was enacted to address the redundancy of three Special Accounts following the merger of Medicare Australia and Centrelink with the Department of Human Services (DHS). This Determination, made under subsection 20(2) of the Financial Management and Accountability Act 1997, aims to streamline financial management by abolishing the Other Trust Moneys – Department of Human Services Special Account, the Commonwealth Service Delivery Agency Other Trust Moneys Account (operated by Centrelink), and the Services for Other Entities and Trust Moneys – Medicare Australia Special Account. These Special Accounts will be replaced by the Services for Other Entities and Trust Monies – Department of Human Services Special Account, into which any remaining balances from the abolished accounts will be credited. The Minister for Finance and Deregulation issued this Determination to facilitate the orderly transition and to ensure that any remaining balances are appropriately managed within the new account structure. The policy objective is to maintain fiscal integrity and streamline financial accountability as the government agencies undergo organisational changes.
Scope and Application
The Financial Management and Accountability (Variation and Abolition of Special Accounts of the Department of Human Services) Determination 2011/12 applies to the Other Trust Moneys – Department of Human Services Special Account, the Commonwealth Service Delivery Agency Other Trust Moneys Account (operated by Centrelink), and the Services for Other Entities and Trust Moneys – Medicare Australia Special Account. These accounts are established under the Financial Management and Accountability Act 1997 (FMA Act) and are subject to appropriation by the Parliament for specific purposes. The Determination is made under subsection 20(2) of the FMA Act and aims to abolish these Special Accounts due to the merger of Medicare Australia and Centrelink with the Department of Human Services (DHS), effective 1 July 2011. The balances of these accounts will be transferred to the Services for Other Entities and Trust Moneys – Department of Human Services Special Account, and the original accounts will be abolished by 31 December 2011 or when the balances reach zero. Any remaining balance on 31 December 2011 will be remitted to the Consolidated Revenue Fund. The Determination is limited to internal machinery of government purposes, and consultation was conducted with DHS, Medicare Australia, and Centrelink, who agree with the form of the instrument.
Key Provisions
The Financial Management and Accountability (Variation and Abolition of Special Accounts of the Department of Human Services) Determination 2011/12 (the Determination) varies the Financial Management and Accountability Act 1997 (FMA Act) by abolishing three Special Accounts. These are the Other Trust Moneys – Department of Human Services Special Account, the Commonwealth Service Delivery Agency Other Trust Moneys Account operated by Centrelink, and the Services for Other Entities and Trust Moneys – Medicare Australia Special Account. This change arises from the merger of Medicare Australia and Centrelink with the Department of Human Services (DHS), which is expected to occur on 1 July 2011. The balances from these accounts will be credited to the new Services for Other Entities and Trust Monies – Department of Human Services Special Account. These three Special Accounts will be abolished on the earlier of when their balances reach zero or 31 December 2011. Any remaining balances on 31 December 2011 will be remitted to the Consolidated Revenue Fund.
The Determination imposes specific obligations on DHS, Medicare Australia, and Centrelink, which are the agencies affected by this instrument. These agencies were provided with drafts of the instrument and agree with its form. DHS supplied data for the “Table of Balances and Transactions.” As this instrument is for internal machinery of government purposes only, no consultation was necessary with other persons (see sections 17 and 18 of the Legislative Instruments Act 2003). The affected agencies must ensure that any remaining balances from the abolished Special Accounts are appropriately transferred to the new Services for Other Entities and Trust Monies – Department of Human Services Special Account before the specified dates. They must also ensure that any balances remaining on 31 December 2011 are remitted to the Consolidated Revenue Fund.
The Determination does not specify any offences, penalties, or consequences for breach. However, non-compliance with the requirements of the FMA Act or any other applicable legislation could result in civil or criminal liability. For example, unauthorised spending from the Consolidated Revenue Fund could be considered a criminal offence under section 11 of the Crimes Act 1914, which carries a maximum penalty of two years imprisonment. Similarly, misuse of public funds could be considered a criminal offence under section 116.1 of the Criminal Code Act 1995, which carries a maximum penalty of ten years imprisonment. It is important for the affected agencies to ensure that they comply with the requirements of the Determination and any other applicable legislation to avoid any potential legal consequences.