Appendix 1 – Illustrative examples for Departmental appropriations (D)

Scenario

Appropriation Act (No. 1) appropriates $50M as departmental operating appropriation (excluding DCB) to the NCE. A further $5M in DCB was formally designated as contributions by owners (equity).

Journal entries

CBMS record – Cash Management (CM) module

Budget amounts appropriated under Appropriation Act (No. 1) are made available by Finance in the CBMS CM module on the later of the:

• date the appropriation commences as an Act, and/or
• commencement of the financial period the appropriation relates to.

Financial Statements Disclosure

Scenario

On 1 February, Finance administratively quarantined $30M of the NCE’s current year departmental operating appropriation in CBMS. On 6 March, the Finance Minister withheld the following under section 51 of the PGPA Act:

• $5.5M current year (20X2-20X3) departmental operating appropriation
• $3.5M prior year (20X1-20X2) departmental operating appropriation
• $2M current year equity injections.

On 20 June, the Finance Minister reversed the amount previously withheld under PGPA Act section 51 – being $2.5M prior year departmental operating appropriation.

Journal entries

CBMS record – CM module 

Withholding of amounts against an appropriation, including reversals of previously withheld amounts, are processed by Finance as “S51 withholding” adjustments in the CBMS CM module – these are processed with the effective date specified in the signed direction.  Amounts withheld under section 51 of the PGPA Act continue to be included as legally available appropriation under section 40 of the FRR.

Under section 45 of the FRR, in the annual appropriations notes, the entity is to state reasons for amounts of current and prior year annual appropriation being withheld under section 51 of the PGPA Act and/or quarantined for administrative purposes for each appropriation Act that is still legally in force (annual Appropriation Acts remain in force for three years after commencement) as of 30 June. Amounts withheld or administrative quarantined do not need to be disclosed by each individual direction/item – entities should disclose total net amounts withheld and/or administrative quarantined by Act.

Financial Statements Disclosure

D3.1 Re-crediting of repayments (PGPA Act section 74)

Scenario

On 5 July, the NCE paid $250 to XYZ for stationery supplies. On 31 July (within the same financial year):

• XYZ advised the NCE that it had overpaid for the stationery
• XYZ refunded $50 to the NCE
• the NCE transferred $50 to the OPA.

Journal entries

CBMS record – CM module 

Process a standard NPP departmental drawdown in the CM module for payment date of 5 July. Include the following naming conventions in the description:

• Description or similar: NCE acronym, Dept, 5 July
• Program: Program X
• Budget Year: 20X3
• Appropriation: Departmental Appropriation
• Amount: $250

Process a standard receipt in the CM module with effective date being the date of transfer to the OPA. Include the following naming conventions in the description:

• Description or similar: NCE acronym, effective date
• Program: Program X
• Budget Year: 20X3
• Appropriation: Departmental Appropriation
• Receipt Type: Appropriation Repayments
• Amount: $50

Financial statements disclosure

D3.2 Retainable receipts - prepayment

Scenario

On 1 July, the NCE sold a 12-month bulletin subscription to XYZ. On the same day, an invoice issued to XYZ for $12,000 with payment due on 31 July.

On the 1 July, XYZ received its first bulletin and on 31 July:

• XYZ made a payment of $12,000 to the NCE
• the NCE transferred funds $12,000 to the OPA.

Journal entries

CBMS record – CM module 

Process a standard receipt in the CM module with effective date being the date of transfer to the OPA. Include the following naming conventions in the description:

• Description or similar: NCE acronym, effective date
• Program: Program X
• Budget Year: 20X3
• Appropriation: most recent Departmental Appropriation
• Receipt Type: Appropriation Receipts (s74)
• Amount: $12,000

Financial statement disclosure

D3.3 Retainable receipts – sale of asset (< 5% total departmental items annual limit)

Scenario

On 1 July, the NCE sold a forklift for $50,000 to XYZ and made a gain on sale of $5,000.

Assume accumulated depreciation for the asset is nil, there were no disposal costs and the NCE is able to retain sale proceeds under section 74 of the PGPA Act (i.e. total asset sale proceeds less disposal costs was less than the 5% total departmental items annual limit specified in subsection 27(7) of the PGPA Rule).

The NCE’s total departmental items for the year was $1,250,000.

The sale proceeds represent 4% of the NCE’s total departmental items.

On 31 July the NCE:

• received payment of $50,000 from XYZ
• transferred $50,000 to the OPA and recognised the amount as a retainable receipt.

Journal entries

CBMS record – CM module

Process a standard receipt in the CBMS CM module with the effective date being the date of transfer to the OPA. Include the following naming conventions in the description:

• Description or similar: NCE acronym, effective date
• Program: Program X
• Budget Year: 20X3
• Appropriation: most recent Departmental Appropriation
• Receipt Type: Appropriation Receipts (s74)
• Amount: $50,000

Financial statements disclosure

D3.4 Retainable receipts – sale of asset (> 5% total departmental items annual limit)

Scenario

Same as D3.3, but on 30 June, the NCE had received an additional $1,000 relating to the sale of assets, which exceeded the retainable receipts 5% annual limit by $1,000. The NCE cannot retain the $1,000 under section 74 of the PGPA Act and is required to return the amount to the OPA.

Journal entry – in addition to the entries above with asset sale, cash, etc. adjusted to reflect the receipt of the additional $1,000

CBMS record – CM module

Process a standard receipt in the CM module with effective date being the date of transfer to the OPA. Include the following naming conventions in the description:

• Description or similar: NCE acronym, effective date
• Program: Program X
• Budget Year: 20X2
• Appropriation: Nil Appropriation Impact
• Receipt Type: Administered Receipt
• Amount: $1,000

D4.1 Machinery of government changes (PGPA Act section 75)

Scenario

On:

• 2 October, an administrative arrangements order transferred two functions from one NCE to another NCE
• 26 October, the two chief financial officers signed a PGPA Act section 75 agreement (which is not a legal instrument, as distinct from a PGPA Act section 75 determination)
• 1 November, the PGPA Act section 75 determination was registered on the Federal Register of Legislation with:
  • a commencement date of 2 November
  • a determination date of 30 October.

The following appropriation was transferred though the PGPA Act section 75 determination:

• $95.5M departmental operating (current year)
• $3M DCB (current year).

On 30 November, the NCE identified additional appropriation that related to the transferred functions:

• $30M departmental operating (current year)
• $6.5M departmental operating (prior year).

Following a second PGPA Act section 75 agreement between the two NCEs:

• a second PGPA Act section 75 determination transferred the residual appropriation
• on 12 December, the second determination was registered with a:
  • a commencement date of 15 December
  • determination date of 10 December.

Journal entries – transferring NCE

Journal entries – gaining NCE

CBMS record – CM module

Transferring amounts against an appropriation from one NCE to another, is processed by Finance as a budget adjustment in the CBMS CM module. Budget adjustments processed in CBMS under section 75 of the PGPA Act are applied the day after the signed determination is registered on the Federal Register of Legislation (unless otherwise specified within the determination).

Financial statements disclosure

D4.2 Decision of the Cabinet or Prime Minister

Scenario

On 27 February 20X2-X3, the NCE received a letter from the Prime Minister that approved $10.5M in departmental operating for the NCE. The letter stated that the $10.5M was for specific tasks to be undertaken in 20X2-X3. There were no more Appropriation Acts available through which the 20X2-X3 funding could be appropriated.

On 1 July 20X3, the NCE was appropriated $10.5M under Appropriation Act (No. 1) 20X3‑X4.

Journal entry – year of approval

Journal entries – year of appropriation

CBMS record – CM module

Budget amounts appropriated under Appropriation Act (No. 1) are made available by Finance in the CBMS CM module on the later of the:

• date the appropriation commences as an Act, and/or
• commencement of the financial period the appropriation relates to.

Financial statements disclosure

D4.3 Workload agreement

Scenario

The NCE received a Cabinet minute (dated 1 July 20X2) requesting that it expand the scope of phase 1 of project X during 20X2-X3 under a workload agreement. It specified that $5M additional departmental operating appropriation would be provided in the next set of Appropriation Bills with respect to the additional work.

On 10 April 20X3, the NCE received $20M through Appropriation Act (No. 3) (includes the $5M for additional output).

Journal entries

CBMS record – CM module

Budget amounts appropriated under Appropriation Acts (No. 1 and No. 3) are made available by Finance in the CM module on the later of:

• the date the appropriation commences as an Act, and/or
• the commencement of the financial period the appropriation relates to.

Financial statements disclosure

D4.4 Supplementation (Emergency response)

Scenario

The NCE was required to undertake emergency response tasks in 20X2-X3. However, it will not receive the departmental operating appropriation until the following financial year (i.e. 20X3-X4).

The NCE received:

• a letter from the Prime Minister (dated 20 January 20X3) stating that the NCE would receive $7M in 20X3-X4 for emergency response tasks to be performed in 20X2-X3
• a Cabinet Minute (dated 30 July 20X3) advising that it would receive an additional $5.5M in 20X3-X4 for emergency response tasks performed in 20X2-X3.

On 1 July 20X3, the NCE was appropriated departmental operating of $100M (including the $7M previously approved in January 20X3) under Appropriation Act (No. 1).

On 4 April 20X4, the NCE was appropriated an additional $25.5M of departmental operating (including the $5.5M previously approved in July 20X3) under Appropriation Act (No. 3).

Journal entries – year of approval ($7M)

Journal entries – year of appropriation ($7M)

Journal entries – year of approval ($5.5M)

Journal entries – year of appropriation ($5.5M)

CBMS record – CM module

Budget amounts appropriated under Appropriation Acts (No. 1 and No. 3) are made available by Finance in the CM module on the later of:

• the date the appropriation commences as an Act, and/or
• the commencement of the financial period the appropriation relates to.

Financial statements disclosure

D4.5 Reappropriation – operating and DCB

Scenario

The NCE was appropriated $100M departmental operating on 1 July 20X2 under Appropriation Act (No. 1). On:

• 12 January 20X3, the NCE received policy approval from the Finance Minister to reclassify future expenditure to capital and be reappropriated $5M of the $100M as DCB
• 4 April 20X3, the NCE was reappropriated $5M DCB under Appropriation Act (No. 3)
• 21 April 20X3, a PGPA Act section 51 direction was signed to withhold $5M in departmental operating
• 5 May 20X3, the NCE identified an additional $2.5M of the original $100M in departmental operating was required for capital expenditure (however no reappropriation was possible prior to 30 June 20X3).

Journal entries

CBMS record – CM module

Budget amounts appropriated under Appropriation Act (No. 1) and Appropriation Act (No. 3) are made available by Finance in the CBMS CM module of CBMS on the later of:

• the date the appropriation commences as an Act, and/or
• the commencement of the financial period the appropriation relates to.

Withholding an amount against an appropriation is processed by Finance as a “S51 withholding” adjustment in the CBMS CM module, with the effective date specified in the signed direction.

Financial statement disclosure

Scenario

The NCE was appropriated departmental operating funding on 1 July 20X1 under Appropriation Act (No. 1) 20X1-20X2 (the Act).

The Act contained a clause that automatically repealed any unspent appropriation three years later (i.e. 1 July 20X4).

On 30 June 20X4, $10.5M of the appropriation remained unspent.

Journal entry

CBMS record – CM module

Remaining unspent amounts appropriated under Appropriation Act (No. 1) are reduced by Finance in the CBMS CM module on the date the appropriation is repealed, according to the repeal clause within the Act.

Financial statements disclosure