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14/03/2025

Calculating annual appropriation transfer amounts

Step 1. Calculate current year departmental appropriation transfer

Calculate the balance of the current year departmental appropriation at the date of transfer by subtracting the expenditure incurred by the transferring entity to the date of transfer from the departmental appropriation provided for the current financial year.

Current year departmental appropriation balance equals

Current year departmental appropriation balance is equal to Department appropriations provided for current year less than Expenditure incurred by the transferring entity to date of transfer

 

Expenditure to date of transfer

A transferring entity's financial system may not be capable of accurately measuring the expenditure incurred from 1 July to the date of transfer. If this is the case, expenses can be used as the starting point for calculating the expenditure to date.

  • For example, if expenditure is not uniform throughout the period the amount may be calculated as follows:

Expenditure to date of transfer equals

Expenditure to date of transfer is equal to Total expenses from 1 July to the date of transfer less than Non-cash expenses incurred year to date (such as depreciation, amortisation, make good expenses) less than Expenses recoverable from sales or other arrangement where amounts were retained under section 74 of PGPA Act and add the Increases in assets to date of transfer (such as asset or investments additions) then add Reductions in liabilities to the date of transfer

 

  • If expenditure has been incurred on an even basis, the following alternative method can be used:

Expenditure to date of transfer (if expenditure has been incurred on an even basis) equals

If expenditure has been incurred on an even basis it is calculated as; Departmental appropriation * (Days from 1 July to date of transfer / 365 )

 

Appointing current year appropriation balances

Once the balance of the current year departmental appropriation is ascertained, it will be necessary to allocate the amount between the transferring and receiving entities according to their changed functions. The amount attributable to the receiving entity can be estimated, for example, as follows:

Amount attributable to the receiving entity equals

Amount attributable to the receiving entity is equal to; Balance of appropriation at date of transfer * (No. of staff transferred / Total staff of transferring entity)

 

Note: Both entities will need to negotiate and apply an amended or alternate equitable formula where the staffing ratios in the transferred function vary from the transferring entity's average, or if the appropriation would be more accurately apportioned if based on capital or supplier rather than labour requirements.

 

Step 2. Calculate prior year appropriation transfers

The receiving entity may be entitled to unspent prior year appropriations relating to, for example, accrued employee liabilities and unspent funding on transferring assets.

These accrued amounts would have been appropriated for the period from 1 July 1999 (the commencement of the accrual financial framework) to 30 June of the year preceding the year of the restructure.

Expenditure to date of transfer

Prior year appropriations available for transfer should be calculated by subtracting year to date payments relating to the prior year appropriation to the date of transfer, from the opening prior year appropriation receivable as at the start of the financial year.

Prior year to appropriation balance equals

Prior year appropriation balance is equal to; Prior year appropriation receivable (opening balance) less than Year to date payments relating to prior year appropriation to the date of transfer

 

Apportioning prior year appropriation balances

As discussed at Step 1, unless a transferring entity's system are capable of accurately apportioning the funds, it will be necessary to estimate that amount. For example, entities could use employee numbers transferred to allocate prior years' appropriation receivable.

Prior years' appropriation receivable equals

Prior years' appropriation receivable is equal to; Prior years appropriation balance at date of transfer * (No. of staff transferred / Total staff of transferring entity)

 

Note: Both entities will need to negotiate and apply an alternative equitable formula where the staffing ratios in the transferred function vary from the transferring entity's average, or if the appropriation would be more accurately apportioned if based on capital or supplier rather than labour requirements.

 

Step 3. Calculate total appropriation transfer

Calculate the total appropriation by adding the current year appropriation receivable (at Step 1) to the prior year appropriations to be transferred (at Step 2).

Total appropriation transfer equals

Total appropriation transfer is equal to; Current year appropriation to be transferred (Step 1) plus Prior year appropriations to be transferred (Step 2)

 

Please note that any negative balances in the Central Budget Management System (CBMS) appropriation balance report need to be corrected before appropriation balances can be transferred.

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