Annual Appropriation Rules - Summarised
Appropriations are made by law. Spending money without an appropriation is a breach of section 83 of the Constitution.
The annual appropriation Acts are the authoritative source for details of annual appropriations provided to agencies. The Acts take precedence over details in CBMS, Portfolio Budget Statements/Portfolio Additional Estimates Statements and annual reports.
Departmental operating appropriations do not lapse at the end of each financial year. They remain available to be spent in the next and later financial years.
Administered operating appropriations are subject to the annual ‘Section 11’ process in which agencies limit the amounts that may be spent by means of publishing the required amounts in annual reports.
Non-operating appropriations do not lapse at the end of each financial year. They remain available to be spent in the next and later financial years.
Appropriated amounts cannot be transferred:
- between administered outcomes;
- between departmental and administered;
- between operating and non-operating;
- between appropriation Acts (including between special and annual appropriations); and
- between agencies – except for transfers of appropriation under section 32 of the Financial Management and Accountability Act 1997.
There are no negative appropriations.
No money may be spent from the CRF or an appropriation debited without a valid drawing right.
A decision to reallocate funds between separate appropriation items is implemented by:
- firstly, providing a new appropriation; and
- secondly, arranging for the offsetting funding to be ‘quarantined’ in the ACM system.
No spending proposal may be approved without an available appropriation (either in an Act or proposed in a Bill before the Parliament), unless the Finance Minister has given written authorisation under FMA Regulation 10 for the approval.
The rephasings process only applies to administered operating appropriations and is implemented in the same way as a reallocation.
There is no impediment in law to shifting funds between activities that are funded by the same appropriation item. However, shifts are subject to the Budget Process Operational Rules.
Amounts received by an agency cannot be used to increase its departmental appropriation under section 31 of the FMA Act until the cash has been received and the receipt is recorded as an amount prescribed by Regulations 15 and 16.
Appropriation Act (No. 1), and other appropriation Acts for the ordinary annual services of the government, incorporate funding for departmental operating costs, including the cost of replacing some existing assets, and for all administered outcomes that have been previously authorised by Parliament.
Appropriation Act (No. 2), and comparable annual appropriation Acts, provides funding for services other than the ordinary annual services of government. An agreement between the Senate and the Government, the Compact of 1965 (as amended), provides that the following purposes of expenditure are not for the ordinary annual services of government (appropriation items in brackets):
- Specific Purpose Payments (Payments to the States and Territories under section 96 of the Constitution, to the ACT and NT and payments to local government);
- Administered operating costs that fall within an outcome not previously authorised by Parliament (New Administered Outcomes); and
- Non-operating costs (Equity Injections and Administered Assets and Liabilities).
Contact for information on this page: AMTMail@finance.gov.au