Administered annual appropriations provide money to carry out the objectives of the Australian Government. Administered appropriations provided to non-corporate Commonwealth entities (NCEs):
- provide the NCE with funding for its administration of government activities
- are not controlled by the NCE
- are not revenues of the individual NCE that oversees distribution or expenditure of the funds as directed.
Amounts to be transferred from the Official Public Account (OPA) for administered items do not give rise to administered appropriations receivable.
Entities need to pass refunds of administered input tax credits received from the ATO back to the OPA - see 11. Recoverable GST under Formal additions and reductions - guidance. The payments of administered input tax credits receipted to the OPA are not payments by entities for appropriation purposes, as referred to in appropriation Acts. These are receipts under section 74A of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).
Recognition of administered appropriations
Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) section 41 - Administered appropriations
This section sets out the recognition requirements for administered appropriations.
NCEs must recognise all administered annual appropriations for which they are responsible in their administered reconciliation schedule. The earliest point of recognition for administered annual appropriations is the date amounts are drawn down to the NCEs bank account for payment.
The Finance Minister (or responsible Presiding Officer in relation to Parliamentary Departments) has the authority to increase annual administered appropriations through an AFM or APO.
Annual appropriation Acts may contain amounts against state, territory and local government items. Ministers holding the authority to determine the terms and conditions applying to these payments through determinations in writing, are specified in Schedule 1 of the relevant appropriation Act.
Adjustments
Administered appropriations can be adjusted in accordance with:
PGPA Act
Section 74 - Retainable receipts (re-crediting of repayments)
Section 74A - Recoverable GST
Section 75 - Transfers of functions
Appropriation Act
Advance to the Finance Minister (or Advance to the responsible Presiding Officer)
Accounting treatment for adjustments:
Accounting treatment:
- PGPA Act section 74 (repayments only) – decrease in accumulated results and expenses (for example, suppliers) for repayments received within same financial year
- PGPA Act section 74A – increase in accumulated results and asset (cash) on drawdown
- PGPA Act section 75 – for a transferring or receiving NCE there are no accounting entries (that is, no requirement to draw down cash for payment as appropriation is transferred via PGPA Act section 75 determination).
Appropriation note:
- PGPA Act section 74 (repayments only) – included as legally available appropriation against the original appropriation from which the payment was made (unless the original appropriation no longer exists), with additional disclosure (prior year). If the appropriation no longer exists (for example, if automatically repealed), the amount is returned to the OPA as an administered receipt.
- PGPA Act section 74A – not included in appropriation note, as it is prepared on a recoverable GST exclusive basis.
- PGPA Act section 75 – included in appropriation note as reduction (transferring NCE) and increase (receiving NCE) in legally available appropriation, with additional disclosure (prior year).
Administered advances to the Finance Minister or responsible Presiding Officer
To receive an AFM or an APO a determination must be made (FRR section 41(2)(b)). For NCE accounting purposes, the earliest point of recognition of an administered amount appropriated by an AFM or an APO is the date amounts are drawn down to the NCE's bank account for payment - see subsection 41(2) of the FRR.
Any unspent AFM amounts at the end of the financial year are withheld under section 51 of the PGPA Act, with an effective date of 30 June, until such a time as the relevant appropriation Act automatically lapses. For the treatment of any unspent amount, see Administered appropriation withheld below.
Determinations allocating AFM or APO amounts are made in accordance with provisions in the appropriation Acts. See RMG-100 Guide to Appropriations (RMG-100) for further information.
Accounting treatment for an AFM or APO:
Accounting treatment – increase in accumulated results and asset (cash) on drawdown.
Appropriation note – AFM (and APO) amounts included as legally available appropriation (including any unspent amounts withheld under PGPA Act section 51).
See illustrative examples A3 in Illustrative examples for Administered appropriations (A), available under Tools and Templates, for further information.
Administered appropriation withheld
Amounts withheld by an NCE under section 51 of the PGPA Act represent a loss of control event – see subsection 40(2) of the FRR.
Accounting treatment for administered appropriation withheld:
Accounting treatment – no accounting entry (as administered appropriations are recognised when drawn down for payment, so there is no equivalent to departmental appropriation revenue/appropriations receivable to be adjusted).
Appropriation note – PGPA Act section 51 withheld amounts included as legally available appropriation, with footnote disclosure (current year) and additional disclosure by appropriation Act (prior year). Amounts withheld should be the total of all section 51 directions in force as at 30 June. See illustrative example A4 in Illustrative examples for Administered appropriations (A), available under Tools and templates, for more information.
Payments to corporate Commonwealth entities
FRR section 42 - Payments to corporate Commonwealth entities (CCEs)
This section sets out reporting and disclosure requirements for appropriations where they are received by non-corporate Commonwealth entities (NCEs) on behalf of, and for payment to, corporate Commonwealth entities (CCEs).
An amount appropriated to an NCE for payment to a CCE is an administered appropriation to the NCE and is recognised and disclosed in accordance with section 42 of the FRR.
Accounting treatment for payments to and repayments by CCEs:
Accounting treatment for:
- equity injections – an increase in contributed equity and administered investment in CCEs.
- loans (directly by OPA or through NCE) – an increase in accumulated results and loans receivable.
- interest repayment (paid direct to OPA or through NCE) – an increase in administered revenue and decrease in accumulated results.
- other payments – an increase in accumulated results and expense (payments to CCEs).
Appropriation note – these amounts are included in the appropriation note (with the exception of interest repayments).
See illustrative example A4 in Illustrative examples for Administered appropriations (A), available under Tools and Templates, for further information.
