EXPLANATORY STATEMENT

Issued by the authority of the Minister for Finance and Deregulation

Financial Management and Accountability Act 1997

Determination 2008/19 to establish a Special Account

Purposes of Determination 2008/19

The attached instrument makes a Determination under subsection 20 (1) of the Financial Management and Accountability Act 1997 (FMA Act) to establish a Special Account entitled Office of the Australian Accounting Standards Board Services for Other Entities and Trust Moneys Special Account (OAASB SOETM 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 OAASB SOETM 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 is 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 a purpose specified in the Special Account.

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 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. The Determination may prescribe a later date upon which the Special Account can be relied upon.

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.

The notes to the Determination identify legislation and other laws that allow or require amounts to be credited to, or debited from, the Special Account.

Operation of Determination 2008/19

Purpose of the Office of the Australian Accounting Standards Board Services for Other Entities and Trust Moneys Special Account

Most Agencies under the FMA Act administer either a SOETM Special Account or other Special Accounts that together encompass the purposes of a SOETM Special Account.

The OAASB SOETM Special Account will enable Office of the Australian Accounting Standards Board (OAASB) to hold and expend amounts on behalf of persons or entities other than the Commonwealth. The OAASB is a prescribed Agency subject to the FMA Act and has identified amounts that will be required to be held in a SOETM Special Account.

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 (a) 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; and (b) received from Comcare in relation to employees entitled to receive workers’ compensation payments.

Within the Determination that establishes the OAASB SOETM Special Account, Clause 5 specifies the purposes for which the Special Account can be debited.

·                    Subclauses 5 (a) and (b) describe the primary purposes for expenditure of amounts from the Special Account.

·                    Subclause 5 (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 5 (d) allows the balance of the Special Account to be reduced by amounts that are not Special Public Money (as defined under section 16 of the Financial Management and Accountability Act 1997). It covers amounts (i) that are not Special Public Money at the time they are credited to the special account; and (ii) that, due to some change in circumstances under which they are held, no longer have the status of Special Public Money. It is included to ensure that these amounts are not set aside indefinitely.

Consultation

The Agency affected by this instrument is OAASB. The Agency was provided with drafts of the instrument and agrees with the form of the instrument. No community consultation was carried out as the instrument is for machinery of government purposes only (see sections 17 and 18 of the Legislative Instruments Act 2003).

Estimates of transactions on the Office of the Australian Accounting Standards Board Services for Other Entities and Trust Moneys Special Account

** Due to the agency becoming newly prescribed under the FMA Act the receipts and expenditure of moneys is not able to be estimated at this time.