Managing debt: recovery and non-recovery
Section 15 of the PGPA Act places requirements on all accountable authorities about how the authority governs their entity; including managing their entity in a way that promotes the financial sustainability of their entity and the proper use and management of public resources.
These obligations should guide decision-making about debt management, such as the extent to which possible debts are investigated and identified and the methods by which debt recovery is pursued by the accountable authority (or their delegate) of a non‑corporate Commonwealth entity under section 11 of the PGPA Rule (Recovery of debts).
Section 11 of the PGPA Rule (Recovery of debts) obliges an accountable authority of a non‑corporate Commonwealth entity to pursue recovery of each debt for which they are responsible. However, there are certain circumstances where an accountable authority (or their delegate) can approve the non-recovery of a debt.
For non-corporate Commonwealth entities, non-recovery (write off) of a debt is permitted where the non-recovery has been authorised by an Act, or it would not be economical to pursue the recovery of the debt, or where the debt is not legally recoverable. A decision to write off a debt does not legally extinguish the debt. For example, if the debtor’s circumstances change in the future the debt can be reinstated and pursued. The only way to legally extinguish a debt or other amount owing to the Commonwealth is for the Finance Minister to waive the amount owing under section 63 of the PGPA Act.
The Finance Minister has delegated to accountable authorities non-corporate Commonwealth entities, the power to modify the terms and conditions on which an amount owing to the Commonwealth is to be paid.
For further information on the process for waiving debts see Discretionary financial assistance
Last updated: 15 June 2015