Australian Government
Department of Finance and Administration
Finance Circular
No. 2003/08
To All FMA Act Agencies
Bank Accounts: Removal of Trust Accounts and Creation of
Special Public Money (SPM) Accounts
Purpose
This Finance circular advises Australian Government entities, which are subject to the
Financial Management and Accountability Act 1997 (FMA Act) of a change in the concept
and use of the term “trust account” and “exempt trust account” in the financial framework.
Key Points
1.
The Finance Minister has signed new delegations that change the concept and use of the
term “trust account” and “exempt trust account”, as bank accounts that Agencies can
operate. Effective from 15 October 2003, these accounts will be replaced with “SPM
accounts” and “exempt SPM accounts” respectively, which are defined as follows:
SPM account means an official bank account, designated as an SPM account by the
Chief Executive of the Agency or his or her delegate, that is established for the receipt,
custody, payment or transmission of public money held by the Commonwealth as
special public money and is not designated as an exempt SPM account by the Chief
Executive of the Agency or his or her delegate.
exempt SPM account means an official bank account, designated as an exempt SPM
account by the Chief Executive of the Agency or his or her delegate, that is established
for the receipt, custody, payment or transmission of public money held by the
Commonwealth as special public money and for which the Commonwealth:
(a) is required to operate a bank account separate from other public money held by
the Agency’s transactional banker; and
(b) is required to retain the balance of the account outside the Commonwealth’s
Official Public Account Group; and
(c) may be required to invest the balance of the account outside the
Commonwealth’s Official Public Account Group.
Note: For exempt SPM accounts that require moneys to be invested, investment powers will need to be
sought from the Finance Minister under s39 of the Act.
2.
SPM is defined under section 16 of the FMA Act as “public money that is not held on
account of the Commonwealth or for the use or benefit of the Commonwealth”.
 Page 1 of 2
3.
Trust Money, or more precisely, money that is subject to Trust Law, is a subset of SPM.
The Australian Government holds a range of SPM, some that is subject to Trust Law
and some that is not. By shifting the focus from Trust Money to SPM, the new
delegations bring the banking terminology into closer alignment with the FMA Act.
4.
These changes to the financial framework clarify that all SPM needs to be managed by
Agencies in accordance with the requirements of the FMA Act. Agencies with SPM
that is subject to Trust Law will need to take into consideration not only the
requirements of the FMA Act but also any additional requirements imposed by Trust
Law.
5.
When dealing with moneys that are subject to Trust Law, Agencies need to ensure that
the requirements of trust deeds do not conflict with the requirements of the FMA Act.
Where potential conflicts arise, Finance should be consulted before the Agency accepts
the role of trustee.
Action Required
6.
The amendment delegations have effect from 15 October 2003. Agencies should notify
their transactional banker of the SPM account and exempt SPM account terminology
and have the changes ready to be actioned as of 15 October 2003.
Contacts
7.
Further guidance regarding the banking of SPM can be found in the Agency Banking
Framework Guidance Manual which is located at:
http://www.finance.gov.au/publications/agency-banking-framework-guidancemanual/index.html
8.
If you have any queries, please contact the Banking Team within Financial
Management Group at Banking@finance.gov.au.
Michael Culhane
Branch Manager
Finance and Banking Branch
Financial Management Group
October 2003
Page 2 of 2