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Note 20: Compliance with Statutory Conditions for Payments from the Consolidated Revenue Fund

Section 83 of the Constitution provides that no amount may be paid out of the Consolidated Revenue Fund except under an appropriation made by law. The Department of Finance and Deregulation provided information to all agencies in 2011 regarding the need for risk assessments in relation to compliance with statutory conditions on payments from special appropriations.

Note 20a: Departmental payments

During 2013 additional legal advice was received that indicated there could be breaches of section 83 under certain circumstances with payments for long service leave, goods and services tax and payments under determinations of the Remuneration Tribunal. The APSC will review its processes and controls over payments for these items to minimise the possibility for future breaches as a result of these payments. The APSC has determined that there is a low risk of the certain circumstances mentioned in the legal advice applying to departmental payments. The APSC is not aware of any specific breaches of section 83 in respect of these items.

Note 20b: Administered payments

The possibility of this being an issue for the APSC’s administered payments was reported in the notes to the 2010-11 financial statements and the APSC undertook to investigate the issue during 2012. Payments are made by the drawing agencies from the special appropriations for the payment of salaries and allowances to Parliamentarians’ and Judicial Office Holders.

During 2012, the APSC requested each drawing agency to review their exposure to risks of not complying with statutory conditions on payments from appropriations. This involved:

  • identifying each special appropriation
  • determining the risk of non-compliance by assessing the difficulty of administering the statutory conditions and assessing the extent to which existing payment systems and processes satisfy those conditions
  • determining procedures to confirm risk assessments in medium risk cases and to quantify the extent of non-compliance, if any, in higher risk situations
  • obtaining legal advice as appropriate to resolve questions of potential non-compliance and
  • considering legislative or procedural changes to reduce the risk of non-compliance in the future to an acceptably low level.

The APSC and drawing agencies identified that special appropriations containing statutory conditions for payment, comprised:

  • Remuneration Tribunal Act 1973 and
  • Remuneration and Allowances Act 1990 (from 15 March 2012 no payments were made from this special appropriation).

During 2012 this work was completed in respect of special appropriations with statutory conditions for payment, representing total expenditure of $59,323,000 in 2013 (2012: $49,596,000).

The work conducted to date has identified:

  1. One payment (2012: Three payments) was made without legal authority and are in contravention of section 83 of the Constitution. This occurred for payments reported under the Remuneration Tribunal Act 1973.

Of the total amount paid in contravention of section 83 identified in (a) above:

  • amounts totalling $3,278 (2012 $3,605) were incorrectly paid and
  • amounts totalling $3,278 (2012 $3,605) have been recovered or offset against a later payment.

In order to reduce the risks of non-compliance to an acceptably low level:

  1. changes were made to the Remuneration Tribunal Act 1973 which were enacted on 28 May 2013.
  2. systems and procedural changes have been reviewed for the Remuneration Tribunal Act 1973.
Table A – Summary of conditions, breaches and remedial action (2013)
Appropriations identified as subject to conditions
- Special Appropriations
Expenditure in 2013
$000
Review complete?
Yes/No
Breaches identified to 30 June 2013 Potential breaches to date yet to be resolved Remedial action taken or proposed
Number Total $000 Incorrect $000 Recovered/offset As at 30 June 2013 $000 Yes/No Indicative extent
Remuneration Tribunal Act 1973 59,323 Yes 1 3 3 3 No - Legislative change enacted on 28 May 2013.
Remuneration and Allowances Act 1990 - - - - - - No - As this appropriation is no longer utilised, no further action is required.
Table A – Summary of conditions, breaches and remedial action (2012)
Appropriations identified as subject to conditions
- Special Appropriations
Expenditure in 2012 $000 Review complete?Yes/No Breaches identified to 30 June 2012 Potential breaches to date yet to be resolved Remedial action taken or proposed
Number Total $000 Incorrect $000 Recovered/offset As at 30 June 2012 $000 Yes/No Indicative extent
Remuneration Tribunal Act 1973 31,129 Yes 3 4 4 4 No - Legislative change planned.
Remuneration and Allowances Act 1990 18,467 Yes Nil - - - No - As this appropriation is no longer utilised, no further action is required.
Last reviewed: 
11 May 2018