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Trust Money

In some situations, the Crown holds money in trust for a third party. This money does not belong to the Crown and is kept separately in trust accounts. These accounts are managed by agencies, through delegations from the Treasury, and cannot be used for the benefit of the trustee.

Examples of trust money are unclaimed money (such as bank account balances where the named account holder cannot be located) and funds from estates where the beneficiaries cannot be found. Trust money unclaimed after a year (or more) may be paid into the Crown account but this does not limit the rights of beneficiaries to full payment by the Crown.

The Treasury is responsible for managing trust money. The Treasury can delegate responsibility for managing trust money and establishing trust bank accounts but retains statutory responsibility and is responsible for ensuring its agents meet certain standards.

Treasury instructions establish general rules applying to the management of trust money. A written Notice of Appointment to Manage and Invest Trust Money will be issued by the Treasury to departments acting as trust money agents. The Notice will state exactly what type of trust money a department (or other agent) is authorised to manage and any relevant conditions. Only those departments holding such a Notice are authorised to manage and invest trust money and operate trust bank accounts.

Chief executives with delegated authority to manage trust money are responsible for:

  • maintaining appropriate records in respect of the trust money
  • ensuring that trust money is banked into a separate bank account for each trust
  • investing trust money only in accordance with a ‘Notice of appointment to manage and invest trust money'
  • ensuring that appropriate internal control systems are in place
  • providing information on trust money to allow the Treasury to meet its reporting requirements[34].

Notes

  • [34]The financial statements of the Government reporting entity must include a statement of trust money administered by departments and Offices of Parliament (section 27(2)(c)).
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