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Finance CircularNo. 2011/04

Repayments by and to the Commonwealth (Sections 28 and 30 of the FMA Act)

Key pointsThis circular:

affects all Agencies subject to the Financial Management and Accountability Act 1997 (the FMA Act);

replaces Finance Circular 2004/08 Appropriation for Repayments under Section 28 of the FMA Act and Finance Circular 2005/08 Section 30 of the FMA Act - Reinstatement of appropriations for amounts repaid; and

is available on the Finance website at: http://www.finance.gov.au/publications/finance-circulars/index.html

ContentsForewordKey concepts

PART 1: Section 28 – Repayments by the Commonwealth.........................................................4Legal requirementsCommentary and guidance

Instances when section 28 can be usedInstances when section 28 cannot be used

Administrative requirementsDrawing rightsNotional budgets in ACMOPA drawdowns and Agency bankingAccounting and reportingSpecial Accounts

Frequently Asked Questions

PART 2: Section 30 – Repayments to the CommonwealthLegal requirementsCommentary and guidance

Instances when section 30 can be usedInstances when section 30 cannot be used

Administrative requirementsOPA receipting and Agency banking Accounting and reporting

Frequently Asked Questions..........................................................................................................14

Page 1 of 14 Finance Circular No. 2011/04Department of Finance and Deregulation

http://www.finance.gov.au/publications/finance-circulars/index.html


Foreword

ForewordThis circular provides guidance on the operation and use of sections 28 and 30 of the FMA Act, which set out the requirements for repayments by the Commonwealth and repayments to the Commonwealth. While there have been no recent changes to these sections of the FMA Act, this circular updates and clarifies issues raised by Agencies.

Handling repayments involves managing public money. The management of public money is a fundamental part of an Agency’s day-to-day activities and it is essential that all officials and their Ministers are aware of their legal obligations.

The primary legal obligations for managing public money arise from the Australian Constitution and are set out in the FMA Act and the Financial Management and Accountability Regulations 1997 (FMA Regulations). Guidance on managing public money is available on the Finance website. Further guidance is also available as Estimates Memoranda in the Knowledge Management module of the Central Budget Management System (CBMS).

Questions on managing public money should be directed to your Agency’s corporate finance area in the first instance, and subsequently if necessary, to the relevant Agency Advice Unit within Finance. For questions relating to this Finance Circular, please contact the Appropriations and Banking Policy Section at [email protected].

Lisa La RanceActing Assistant SecretaryCash Management BranchFinancial Management Group

30 June 2011


mailto:[email protected]

Key concepts

Key conceptsACM means the Appropriation and Cash Management module of CBMS, which is used to assist in the management of appropriations and cash.

administered item is an appropriation, which is administered by an Agency on behalf of the Government. The term is defined in section 3 of the Appropriation Act (No. 1) 2011-2012 and explained in the accompanying Explanatory Memorandum. The term has been defined in every Appropriation Act since 1999.

administered receipt means an amount of public money that is collected by an Agency on behalf of the Commonwealth. The amount is not controlled by the Agency and must be remitted to the OPA through the ACM module with the identifier administered receipt.

Agency has the same meaning as in section 5 of the FMA Act. It includes a Department of State, a Department of the Parliament and a prescribed Agency. Departments of State and Departments of Parliament include persons who are allocated to those Departments under regulation 4 of the FMA Regulations.

appropriation means an authority under law to draw money from the Consolidated Revenue Fund, whether or not the law concerned uses the word ‘appropriation’ or ‘appropriated’. The term is defined in section 5 of the FMA Act.

Central Budget Management System (CBMS) is the system used to manage the flow of financial information between Finance and Australian Government Agencies to facilitate Agency cash and appropriation management, the preparation of budget documentation and financial reporting.

Consolidated Revenue Fund (CRF) has the same meaning as in section 5 of the FMA Act. Specifically, it means the Consolidated Revenue Fund referred to in section 81 of the Australian Constitution.

departmental item is an appropriation, which is used by an Agency for expenditure over which an Agency has control. The term is defined in section 3 of the Appropriation Act (No. 1) 2011-2012 and explained in the accompanying Explanatory Memorandum. The term has been defined in every Appropriation Act since 1999.

Frequently Asked Questions (FAQ) is used as an abbreviated term in this circular.

official means a person who is in an Agency or is part of an Agency. This includes an individual who is allocated to an Agency, including those temporarily allocated. The term is defined in section 5 of the FMA Act.

Official Public Account (OPA) means the group of bank accounts, known as the Official Public Account (OPA) Group, the combined balance of which represents the daily cash position of the Australian Government.

Relevant Agency receipts are receipts are provided for in section 31 of the FMA Act and prescribed in regulation 15 of the FMA Regulations. An Agency’s departmental item may be increased with Relevant Agency receipts.


Part 1: Section 28 – Repayments by the Commonwealth

PART 1: Section 28 – Repayments by the CommonwealthLegal requirementsThe text boxes below contain extracts of section 83 of the Australian Constitution and section 28 of the FMA Act. The effect of these sections is that:

under section 83 of the Australian Constitution, it is unlawful to spend money from the CRF without a relevant appropriation; and

section 28 of the FMA Act establishes a standing appropriation to spend money from the CRF in order to make repayments, provided that certain conditions are met.

Links to Comlaw:

Australian Constitution: http://www.comlaw.gov.au/Details/C2004C00469

FMA Act: http://www.comlaw.gov.au/Details/C2011C00073


Australian Constitution83 Money to be appropriated by law

No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law.

Financial Management and Accountability Act 199728 Repayments by the Commonwealth

(1) This section applies if:

(a) an amount is received by the Commonwealth; and(b) some or all of the amount is required or permitted to be repaid; and(c) apart from this section there is no appropriation for the repayment.

Note: For example, this section would apply to a law that requires an application fee to be refunded to an unsuccessful applicant. It would also apply to a contractual obligation to repay a loan.

(2) The CRF is appropriated for the repayment.

http://www.comlaw.gov.au/Details/C2011C00073



Commentary and guidance

Instances when section 28 can be used

1. Section 28 provides a special appropriation that can be used in certain circumstances to make repayments by the Commonwealth of amounts that were earlier received. A delegation, made by the Finance Minister to Chief Executives (for the purposes of section 27 of the FMA Act), confers on Chief Executives drawing rights that enable them to use this special appropriation. The delegation is available from the Finance website.

2. To use the appropriation contained in section 28, the three conditions set out in paragraphs (a), (b) and (c) of section 28 must be satisfied. (An extract of section 28, showing these conditions, is on page 3.) The appropriation is limited in amount, in that the repayment cannot be greater than the amount originally received by the Commonwealth.

3. Agencies must manage appropriations in accordance with Commonwealth financial framework laws and policies. These include, but are not limited to, the Constitution, the Appropriation Acts, provisions in the FMA Act and the FMA Regulations, as well as other policies, guidelines and instructions issued by Finance and Agency Chief Executives. CBMS reflects these requirements.

4. Agencies must manage amounts received in one of the following ways: remitting it to the OPA as an administered receipt; crediting it to a departmental appropriation item; or, crediting it to a Special Account. Section 28 can be used when a repayment is required to be made in relation to a received amount that was earlier: remitted to the OPA (as an administered receipt); or credited to a departmental item or a Special Account – in this instance only if no

appropriation is available under the departmental item or the relevant Special Account to make the required repayment.

5. Examples of repayments that can be made using section 28 include repaying: an amount that was overpaid to the Commonwealth; an application fee (if the fee was paid on a condition that provided for a repayment); a bond, security deposit or similar amount that may later need to be repaid; an amount found on Commonwealth premises (to the rightful owner); and an amount to a related third party (depending on the terms under which the original

amount was received and if a relationship exists between the parties).

- For example, section 28 enables a repayment to be made to the executor of a deceased person's estate.

6. Section 28 can be used when an Agency processes and makes repayments behalf of another Agency. Both Agencies are responsible for ensuring that the conditions set out in section 28 are satisfied. This includes, for example, assessing whether another appropriation is available to make the repayment. Guidance on the arrangements that need to be set up in these circumstances is at paragraph 10 (drawing rights), paragraph 13 (drawdowns from the OPA) and paragraph 15 (reporting).


http://www.finance.gov.au/financial-framework/fma-legislation/fma-delegations.html


Instances when section 28 cannot be used

7. If another appropriation is available to make the repayment, then section 28 cannot be used. For example, a departmental item, a Special Account or a special appropriation in another Act, as explained below: Departmental item Repayments of amounts which were earlier credited to a

departmental item (under section 31 of the FMA Act) should be made using that departmental item and not section 28.

Special Account Repayments of amounts which were earlier credited to a Special Account (under the crediting provisions) should be made using that Special Account and not section 28. If the debiting provisions of a Special Account do not enable repayments, then the Agency should contact the Appropriations and Banking Policy Section at [email protected] to discuss amending the provisions.

- Most repayments between Agencies relate to amounts that were credited by the receiving Agency to its departmental item or a Special Account. Therefore, as outlined above, section 28 is used for repayments between Agencies only when there is no appropriation available to make the required repayment.

Special Appropriations in legislation Where an Act, other than the FMA Act, provides for repayments, then section 28 cannot be used. An example is section 16 of the Taxation Administration Act 1993, which enables tax refunds to be made.

8. Section 28 cannot be used to pay an interest component when a repayment is to be paid with interest or when interest is to be paid on an amount received. To repay an amount with interest would represent a larger amount leaving the CRF than the amount originally received, which is not allowed under section 28.

9. Section 28 cannot be used to make an internal transfer as an internal transfer does not require an appropriation to be debited. (Please refer to section 13 of the FMA Act and regulation 19 of the FMA Regulations.) An internal transfer is not a payment or a repayment, but it is the movement of money between official bank accounts within an Agency or official bank accounts between Agencies. Money can be moved between several official bank accounts as internal transfers, without debiting an appropriation. The relevant appropriation is debited at the time when a payment or repayment is made from the final official bank account in which the money had been kept. An example of an internal transfer is one Agency (Agency A) drawing money down

from the OPA under section 28 and transferring the money to another Agency’s bank account (Agency B), so that Agency B can make repayments on behalf of Agency A. Section 28, as used by Agency A, is legally debited when Agency B makes a repayment.

Administrative requirements

Drawing rights

10. As with all appropriations, making repayments under section 28 requires the exercise of drawing rights (as provided for in sections 26 and 27 of the FMA Act). Chief Executives should issue drawing rights, in relation to section 27, to enable the appropriation contained in section 28 to be debited by an official to make repayments.

11. Drawing rights are also required when one Agency (Agency A) makes repayments on behalf of another Agency (Agency B). In these circumstances, the following options are available to issue drawing rights to the relevant officials:




the Chief Executive of Agency B may delegate the power to issue drawing rights to the Chief Executive or official(s) in Agency A. This would be practical when a large number of persons need to be issued with drawing rights.

alternatively, the Chief Executive or a delegate in Agency B may issue drawing rights to official(s) in Agency B to debit the appropriation, and issue Agency A with drawing rights to make the repayment.

Note: For further guidance on issuing and exercising drawing rights, please see Finance Circular 2009/07 – Issuing and Exercising Drawing Rights.

Notional budgets in ACM

12. For cash management reasons, a notional budget is applied in ACM to limit the amount available for each Agency under section 28. The notional budget is set in ACM on 1 July each year. It is not a legal limit and may be adjusted according to an Agency’s resourcing requirements. To adjust the notional budget, an Agency should contact the relevant Agency Advice Unit (AAU) in Finance to agree a new notional budget. The AAU will then advise the OPA Administration Team to adjust the notional budget in ACM.

OPA drawdowns and Agency banking

13. Repayments under section 28 are made by drawing down in ACM, from the OPA, into an Agency bank account. The amounts must be deposited to an Agency’s Official Administered Payments bank account and repayments must be made from this bank account. Further guidance on Agency banking requirements are contained on the Finance website in the Agency Banking Framework Guidance Manual.

14. When one Agency (Agency A) makes repayments on behalf of another (Agency B), drawdowns are made against the notional budget of Agency B. The drawdown options are: Agency B could authorise Agency A to use ACM to access Agency B’s notional

section 28 budget and to deposit the amount to an Agency A bank account. This process is referred to as a third-party drawdown; OR

Agency B could use ACM to draw on its notional section 28 budget, deposit the amount to an Agency B bank account and then internally transfer the amount from the Agency B bank account to an Agency A bank account (in accordance with section 13 of the FMA Act and regulation 19 of the FMA Regulations).

Accounting and reporting

15. An Agency must record and report its use of the appropriation provided by section 28 in accordance with the Finance Minister’s Orders for Financial Reporting (FMOs). For further information, please see the most recent FMOs on the Finance website. When one Agency (Agency A) agrees to make repayments for another (Agency B) and

the repayment is supported by the section 28 notional budget of Agency B, then Agency B is responsible for reporting its use of the appropriation.

Special Accounts

16. If a Special Account is used exclusively to make repayments, then the administering Agency should contact the Appropriations and Banking Policy Section at [email protected] to discuss whether the Special Account continues to be required or whether section 28 should be used instead. There are very few instances where this type of Special Account should be maintained.



http://www.finance.gov.au/financial-framework/fma-legislation/fma-finance-ministers-orders.html

http://www.finance.gov.au/publications/Agency-banking-framework-guidance-manual/index.html




Frequently Asked Questions – section 28

1 ) I f I r e c e i v e m o n e y a n d I a m u n s u r e o f t h e d e p o s i t o r , c a n I u s e s e c ti o n 2 8 t o r e p a y t h e m o n e y ?

A n s w e r : No, you cannot use section 28 because the payer and the reason for receiving the amount are unknown. Upon receipt, the amount should be remitted to the OPA as an administered receipt. The following considerations apply: Section 28 cannot support a repayment unless it is confirmed that an amount must be

repaid and this condition cannot be met if the payer and reason for the receipt are unknown. In this case, the Agency should not instruct its transactional bank to reverse the amount from the Agency’s bank account.

If the amount has not yet been remitted to the OPA, the deposit to the Agency’s bank account was an error and the rightful owner is identified, then the Agency may instruct its transactional bank to reverse the amount from the Agency’s bank account. In this case, the amount should not be recorded as income and not be recorded as a use of the appropriation provided in section 28.

If the amount had been remitted to the OPA and later the rightful owner is identified, then at that point in time, section 28 may be used to make a repayment.

2 ) C a n I u s e s e c ti o n 2 8 t o r e p a y a n a m o u n t f o u n d o n a C o m m o n w e a l t h p r e m i s e s ?

A n s w e r : Yes. If the amount had been remitted to the OPA as an administered receipt, then once the rightful owner is identified, at that point in time, section 28 may be used to make a repayment. It is not necessary to hold ‘on trust’ an amount found on a Commonwealth premises

because the person who left the amount is unknown and the reason why they left the amount on Commonwealth premises is also unknown.

3 ) C a n b o n d s a n d s e c u r i t y d e p o s i t s b e r e p a i d u n d e r s e c ti o n 2 8 ?

A n s w e r : Yes. On receipt of a bond or security deposit, the amount should be remitted to the OPA as an administered receipt and when a related repayment is required to be made, it should be made under section 28. It is not necessary to manage such amounts as part of a departmental item or a Special

Account. This would require the Agency to continue reporting the amount until it is repaid, ensure that it is not spent and ensure that is remains available. Most bonds and security deposits are repaid at a later date and those that are forfeited are remitted to the OPA as administered receipts. Therefore, it is more efficient to remit such amounts, when received, to the OPA and later use section 28 to repay.

4 ) C a n I u s e s e c ti o n 2 8 t o p a y i n t e r e s t o n a r e c e i v e d a m o u n t t h a t w a s e a r l i e r r e m i tt e d t o t h e O P A a s a n a d m i n i s t e r e d r e c e i p t ?

A n s w e r : No. Section 28 is limited to making repayments up to the amount originally received by the Commonwealth and does not allow for paying interest on that amount. Please see further guidance on this issue at paragraph 8 of this circular. If the Commonwealth is required to pay interest and there is no available appropriation to pay the interest component, then the Agency should discuss this matter with its AAU. An option may be to seek a supplementary or new appropriation (other than under section 28).



5 ) C a n s e c ti o n 2 8 b e u s e d t o r e p a y a b a n k o r e n ti t y t h a t e r r o n e o u s l y d e p o s i t e d a n a m o u n t i n t o t o a n A g e n c y ’ s b a n k a c c o u n t ?

A n s w e r : Yes, if the money was remitted to the OPA as an administered receipt, then section 28 can be used to repay the bank or entity. Whether the amount was remitted to the OPA would depend on the type of Agency bank account into which the money had been deposited and when the error was discovered. If the amount was deposited to an Agency’s: Official Administered Receipts bank account, then (as a consequence of banking

policies that are set for all Agencies) the bank balance would be swept to the OPA overnight and be zero next morning. Therefore, if the error is discovered after the amount was swept to the OPA, the Agency should record the amount as an administered receipt and it can use section 28 to make the repayment.

Official Administered Payments bank account or an Official Departmental Receipts and Payments bank account, then (consistent with the banking policies that are set for all Agencies) the bank balance is swept to the OPA overnight and the same balance is returned next morning. A remittance to the OPA from these bank accounts is a deliberate act of an Agency and therefore, if the error was discovered:

- before the amount was remitted to the OPA, then the Agency or the bank itself may reverse the transaction. In this case, the amount should not be recorded as income and the section 28 appropriation should not be used.

- after the amount was remitted to the OPA, then the amount should be recorded as an administered receipt and section 28 may be used to make the repayment.

6 ) C a n s e c ti o n 2 8 b e u s e d t o r e p a y a n o t h e r A g e n c y ?

A n s w e r : Yes, but only in exceptional circumstances, where there is no other appropriation to make the required repayment. This occurs infrequently because there is usually another appropriation to use for the

repayment, such as an Agency’s departmental item or a relevant Special Account. Please see further guidance on this issue at paragraph 7 of this circular.

7 ) C a n I u s e s e c ti o n 2 8 t o ‘ t r a n s f e r ’ m o n e y t o a n o t h e r A g e n c y ?

A n s w e r : No, because section 28 provides an appropriation and making a transfer does not debit an appropriation. Please see guidance on this matter at paragraph 9 of this circular. A transfer is the movement of money between the bank accounts of one or more

Agencies. A transfer often occurs when Agencies have a close working relationship. Examples are arrangements between the Department of Defence and the Defence Materiel Organisation, and Centrelink processing payments for other Agencies.

8 ) C a n I u s e s e c ti o n 2 8 t o m a k e a r e p a y m e n t i n r e l a ti o n t o a c ti v i ti e s t h a t a r e m a n a g e d u s i n g a S p e c i a l A c c o u n t ?

A n s w e r : Yes, but only in exceptional circumstances, when the debiting provisions of a Special Account do not provide for making a repayment. Further guidance on this matter is at paragraph 7 of this circular. Most Special Accounts provide for making related repayments. If a particular Special

Account does not provide for repayments, the Agency should contact the Appropriations and Banking Policy Section at [email protected] to discuss amending the debiting provisions for the particular Special Account.




9 ) C a n I u s e s e c ti o n 2 8 t o r e p a y l e v i e s a n d t a x e s ?

A n s w e r : Yes, but only in exceptional circumstances, where there is no other appropriation available to support a required repayment. This occurs infrequently because the collection of levies and taxes is usually authorised

in legislation and the same piece of legislation usually provides an appropriation to make related repayments. For example, section 16 of the Taxation Administration Act 1993 enables tax refunds to be made.

If the relevant legislation does not support this, then the Agency should contact the Appropriations and Banking Policy Section at [email protected], to discuss a potential use of section 28 and contact the Legislative Review Branch at [email protected] for assistance to make a minor amendment to the particular Act.

1 0 ) I f a r e c e i p t i n c r e a s e d a d e p a r t m e n t a l i t e m , c a n I u s e s e c ti o n 2 8 t o m a k e a r e l a t e d r e p a y m e n t ?

A n s w e r : No. If an Agency’s departmental appropriation is credited with an amount, then any related repayments should be made from the Agency’s departmental item. Please see further guidance on this issue at paragraph 7 of this circular.

1 1 ) I f a n A g e n c y r e m i t s a r e c e i p t t o t h e O P A a s a n a d m i n i s t e r e d r e c e i p t a n d l a t e r r e a l i s e s t h a t t h e a m o u n t s h o u l d h a v e i n c r e a s e d a n e x i s ti n g a p p r o p r i a ti o n , t h e n c a n t h e A g e n c y u s e s e c ti o n 2 8 t o i n c r e a s e t h e r e l e v a n t a p p r o p r i a ti o n ?

A n s w e r : No, because section 28 does not permit an Agency to repay itself. The Agency should amend its own accounts and records and then process a receipt journal in ACM, which identifies the legal authority to increase the correct appropriation.

The legal authority to increase the correct appropriation would differ, as follows: departmental item – section 31 of the FMA Act; Special Account - the crediting provisions of a Special Account (for further guidance on

Special Accounts, see Finance Circular 2009/01); or administered item - section 30 of the FMA Act, (guidance on re-crediting an

administered item under 30 is contained in Part 2 of this circular).




Part 2: Section 30 – Repayments to the Commonwealth

PART 2: Section 30 – Repayments to the CommonwealthLegal requirementsThe text boxes below contain extracts of section 81 of the Australian Constitution and sections 30 and 32A(2) of the FMA Act. The effect of these sections is that:

section 81 of the Australian Constitution requires that all money received by the Commonwealth (including repayments made to the Commonwealth) forms part of the CRF, to be appropriated for the purposes of the Commonwealth;

section 30 of the FMA Act provides a mechanism to re-credit appropriations, in certain circumstances, with amounts equal to repayments received; and

section 32A(2) of the FMA Act provides the time when the re-crediting of an appropriation takes effect.

Links to Comlaw:

Australian Constitution: http://www.comlaw.gov.au/Details/C2004C00469FMA Act: http://www.comlaw.gov.au/Details/C2011C00073


Australian Constitution81 Consolidated Revenue Fund

All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution.

Financial Management and Accountability Act 199730 Repayments to the Commonwealth

If:(a) an amount is paid by the Commonwealth; and

(b) an appropriation is debited as a result of the payment; and(c) some or all of the amount is repaid to the Commonwealth;

the appropriation is increased by an amount equal to the amount repaid.Note: See section 32A for when the increase takes effect.

32A Recording of amounts in accounts and records

(1)The crediting of an amount to a Special Account … … ….

Repayments to the Commonwealth

(2)The increase to an appropriation in accordance with section 30 takes effect at the time an entry recording the repayment concerned is made in the accounts and records of the Agency concerned.




Commentary and guidance

Instances when section 30 can be used

17. Section 30 provides a mechanism that can be used to re-credit an appropriation in certain circumstances with amounts received as repayments to the Commonwealth. Section 30 operates together with section 32A(2), which provides that the re-crediting occurs at the time when an Agency makes an entry recording the repayment in its accounts and records.

18. To re-credit an appropriations under section 30 (that is, for an Agency to retain the amount), the conditions set out in paragraphs (a), (b) and (c) of section 30 must be satisfied. (An extract of section 30, showing these conditions, is on page 11.) The conditions include that the repayment to the Commonwealth must relate to an amount paid by the Commonwealth, in respect to an appropriation that was earlier debited.

19. Agencies must manage repayments received in accordance with Commonwealth financial framework laws and policies. These include, but are not limited to, the Constitution, the Appropriation Acts, provisions in the FMA Act and the FMA Regulations, as well as other policies, guidelines and instructions issued by Finance and Agency Chief Executives. Both law and policy are reflected in the management of appropriations data in CBMS. Section 30 can be used to re-credit repayments to the following appropriations, in the following circumstances: an administered item, if the repayment is received in the same year that the

administered item was appropriated and earlier debited; an administered item, if the repaid amount is required to pay outstanding expenses,

which incurred in the same year that the item was appropriated and earlier debited; an administered item, if the Finance Minister has approved retaining an available

balance for the item in a future year to when the item was appropriated; and a special appropriation – however, only up to the notional limit set in CBMS.

- Agencies should always check the legislation relating to a special appropriation, as it may provide an alternative process to section 30 for managing repayments.

20. Examples of instances when section 30 can be used to re-credit the above mentioned appropriations with repayments include: the return of a Commonwealth grant; the return of an overpayment made to a contractor; the return of an overpayment made to another Agency; and the return of an amount by a third party, such as a liquidator who is settling the

financial affairs of a grant recipient or an entity that has taken over a company which was required to repay an amount to the Commonwealth.

21. Section 30 can also be used when an Agency processes and collects repayments on behalf of another Agency (see further guidance at paragraph 25).

Instances when section 30 cannot used

22. Amounts received by an Agency that cannot be re-credited to an appropriation under section 30, or another authority, must be remitted to the OPA as an administered receipt.



23. Examples of instances when section 30 cannot be used include: re-crediting an appropriation that is no longer available in CBMS; re-crediting an appropriation when the Agency has no resourcing requirement, such as

when a policy decision prevents new expenditure under the appropriation or a related program;

re-crediting a departmental item (This is because an Agency’s most recent departmental item may be re-credited with repayments under section 31 of the FMA Act and regulation 15 of the FMA Regulations as ‘an amount that offset costs’. See further guidance on page 14, at FAQs 2 and 3.);

re-crediting a Special Account (This is because the legislation for most Special Accounts provides for repayments. See further guidance on page 14, at FAQ 5.);

crediting an appropriation with interest received, such as interest on debts collected (This is because interest is not a repaid amount but is an additional amount); and

making an internal transfer between the bank accounts of one or more Agencies. (This is because internal transfers are made under regulation 19 of the FMA Regulations. See guidance at paragraphs 9 and 25 of this circular.)

Administrative requirements

OPA receipting and Agency banking

24. Repayments under section 30 must be remitted to the OPA by using the receipt type Appropriation Returns in ACM. Repayments relating to an administered appropriation should be deposited to an Agency’s Official Administered Receipts bank account, under section 30. Whereas, repayments relating to a departmental appropriation should be deposited to an Agency’s Official Departmental Receipts and Payments bank account, under section 31. General details on Agency banking requirements are contained on the Finance website in the Agency Banking Framework Guidance Manual.

25. When one Agency (Agency A) collects a repayment under section 30 for another Agency (Agency B), then:

i. Agency A should advise the details of the amount to Agency B, so that Agency B can make entries in its accounts and records, as provided for in section 32A(2) of the FMA Act to re-credit the relevant appropriation; and

ii. Agency A or Agency B may remit the amount to the OPA; oriii. Agency A may transfer the amount from its bank account to a bank account managed

by Agency B, so that Agency B can remit the amount to the OPA.- The remitting Agency is responsible for the receipt entry in ACM.

Accounting and reporting

26. An increase to an appropriation under section 30 occurs at the time when a corresponding entry recording the repayment is made in the accounts and records of the relevant Agency, consistent with section 32A(2) of the FMA Act.

27. Repayments received should be recorded and reported in accordance with the Finance Minister’s Orders for Financial Reporting (FMOs). For further information, please see the most recent FMOs on the Finance website.


http://www.finance.gov.au/financial-framework/fma-legislation/fma-finance-ministers-orders.html

http://www.finance.gov.au/publications/Agency-banking-framework-guidance-manual/index.html


Frequently Asked Questions – section 30

1 ) C a n I u s e s e c ti o n 3 0 t o i n c r e a s e a n a n n u a l a d m i n i s t e r e d i t e m , a p p r o p r i a t e d i n t h e c u r r e n t y e a r , w i t h a r e p a y m e n t o f a n a m o u n t p a i d u n d e r a n a d m i n i s t e r e d i t e m a p p r o p r i a t e d i n a p r i o r y e a r ?

A n s w e r : No, because Government policy requires that annual administered items be made available in CBMS for only the year in which the appropriation was made. Therefore, an administered item cannot be re-credited with a repayment received in a subsequent year.

2 ) C a n I u s e s e c ti o n 3 0 t o i n c r e a s e a n a d m i n i s t e r e d i t e m w i t h a c o n t r i b u ti o n o f m o n e y , r e c e i v e d f r o m a n o t h e r G o v e r n m e n t , t o w a r d t h e e x p e c t e d e x p e n s e s o f a j o i n t G o v e r n m e n t a c ti v i t y ?

A n s w e r : No. The Agency should discuss this situation with its AAU. Administered appropriations are provided and costed based on expected resourcing requirements. In the described case, no appropriation has yet been debited and therefore, the contribution does not represent a repayment of an earlier made payment. The contribution can be retained by the Commonwealth. An option may be managing the money in a Special Account.

3 ) C a n I u s e s e c ti o n 3 0 t o i n c r e a s e a d e p a r t m e n t a l i t e m , a p p r o p r i a t e d i n t h e c u r r e n t y e a r , w i t h a r e p a y m e n t t h a t r e l a t e s t o a n a m o u n t p a i d f r o m a d e p a r t m e n t a l i t e m i n a p r i o r y e a r ?

A n s w e r : No, section 30 is not be used, because the Agency’s most recent departmental item may be re-credited with a repayment under section 31 of the FMA Act and subregulation 15(2) of the FMA Regulations, as ‘an amount that offsets costs’.

4 ) C a n I i n c r e a s e a d e p a r t m e n t a l i t e m w i t h a r e i m b u r s e m e n t o f e x p e n s e s i n c u r r e d f o r a n A g e n c y s t a ff m e m b e r t o s p e a k a t a n o t h e r e n ti t y ’ s c o n f e r e n c e ?

A n s w e r : Yes, but not using section 30. The departmental item may be increased under section 31 of the FMA Act and subregulation 15(2) of the FMA Regulations, as ‘an amount that offsets costs’.

5 ) C a n I i n c r e a s e a s p e c i a l a p p r o p r i a ti o n w i t h a r e p a y m e n t r e l a t e d t o a n a m o u n t p a i d u n d e r t h e a p p r o p r i a ti o n i n a p r i o r y e a r ?

A n s w e r : Yes, however, the appropriation may be re-credited only up to its notional limit in CBMS. This is because Government policy requires that special appropriations be managed on a year by year basis in CBMS. If the notional limit is required to be adjusted, then the Agency could contact the

relevant AAU in Finance.

6 ) C a n I i n c r e a s e a S p e c i a l A c c o u n t w i t h a r e p a y m e n t t h a t r e l a t e s t o a n a m o u n t p a i d f r o m t h e S p e c i a l A c c o u n t i n a p r i o r y e a r ?

A n s w e r : Yes, but not using section 30. The increase can most likely be made under the crediting provisions of the Special Account. If the crediting provisions do not provide for repayments, then the Agency should contact the Appropriations and Banking Policy Section at [email protected] to discuss the potential use of section 30 and to amend the determination or Act that established the Special Account.



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