Retainable receipts (RMG 307)

Audience

This guide applies to:

  • all non-corporate Commonwealth entities (NCEs); and
  • corporate Commonwealth entities (CCEs), Commonwealth companies, or private sector persons that manage receipts for and on behalf of a NCE.

Key points

This guide:

The above list does not cover all legislative and policy requirements to manage receipts.

Resources

This guide is available on Finance website: www.finance.gov.au.

For more information on retainable receipts, officials can consult:

  • your Chief Finance Officer (CFO) area regarding accounting and financial reporting
  • your Agency Advice Unit (AAU) in Finance regarding:
    • managing estimates for receipts/revenue and payments/expenditure and recording this data in the Central Budget Management System (CBMS).
    • setting limits for cash available to a NCE, in the Cash Management module of CBMS
  • the Financial Reporting Team and the Consolidated Financial Statements Team in Finance regarding information on monthly and annual actuals reporting, and variance explanations (MonthlyReportingTeam@finance.gov.au and CFSTeam@finance.gov.au)
  • the Special Appropriations Team in Finance regarding information in this guide (Receipts@finance.gov.au)
  • the Official Public Account (OPA) Administration and Banking Policy Team in Finance regarding recording receipts in the Cash Management module of CBMS (OPAAdmin@finance.gov.au)
  • the Charging Policy Team in Finance regarding the Australian Government Charging Framework and the Cost Recovery Guidelines (ChargingPolicy@finance.gov.au)
  • the Accounting Policy Team in Finance regarding the FRR and other reporting requirements (AccountingPolicy@finance.gov.au)
  • the relevant EMs on receipts, banking and the Budget process
    • EMs are accessible from your CFO area or from the Knowledge Management module of CBMS.

Retainable receipts for NCEs (section 74 of the PGPA Act)

What are retainable receipts?

  1. Retainable receipts are monies collected by a NCE that can be retained by increasing the balance of an existing appropriation, by part of or the entire amount collected.
  2. CCEs and Commonwealth companies do not require an appropriation to collect and retain receipts, and are not limited by section 74 of the PGPA Act. This is because they are separate legal bodies to the Commonwealth, and so can retain and spend monies on their own account.
  3. Most money collected by NCEs, particularly administered amounts, is not retainable by a NCE, and is treated as unappropriated general government revenue (also known as administered receipts). This money must be remitted to the Commonwealth’s central group of bank accounts, the Official Public Account (OPA) (see the most recent EMs on receipts, banking and cash management by NCEs for further information).
  4. Money managed by NCEs is Commonwealth money and forms part of the Consolidated Revenue Fund (CRF). Section 81 of the Australian Constitution specifies an appropriation in law is required to spend from the CRF. In particular, in order to spend amounts collected as taxation revenue, there must be an appropriation.
  5. For a NCE to retain and spend receipts, both legislative authority (in an Act, rule, instrument or other subordinate law) and policy authority (from the Prime Minister or Cabinet) are required.

How are receipts retained?

  1. The PGPA Act contains two legislative options for a NCE to retain and increase its appropriations with receipts. These are:
    1. retainable receipts, if the amount received is consistent with section 74 of the PGPA Act and section 27 of the PGPA Rule; or
    2. special accounts, if the amount received is consistent with the crediting provisions of one or more special accounts (in accordance with sections 78 and 80 of the PGPA Act). If an amount has been credited to an appropriation item as a retainable receipt under section 27 of the PGPA Rule, it cannot subsequently be transferred to the balance of a special account.
    3. Further information on special accounts is available in the “Special appropriations: special accounts” section of RMG-100: Guide to Appropriations on the Finance website.

  2. Section 74 of the PGPA Act allows NCEs to increase the spending limit of certain limited appropriations by the amount of certain receipts, as prescribed in section 27 of the PGPA Rule. Neither section is an appropriation in itself, rather they authorise the increase of appropriations that have already been enacted by Parliament, by the received amount.

How can retainable receipts be spent?

  1. An appropriation increase for retainable receipts takes effect at the time a NCE records the amounts in its internal accounts and records (subsection 74(2) of the PGPA Act).
  2. Entities must ensure that their internal accounts and records and their CBMS records are updated in a timely and accurate manner.
    1. The data in CBMS is used to calculate the whole-of-government budget balances, and for public disclosure in the Portfolio Budget Statements, Budget Papers and the Consolidated Financial Statements.
  3. When a NCE increases an appropriation with retainable receipts, the extra money can be spent on the purposes of that appropriation, but only if the government has agreed to spend the extra amount (policy authority).
  4. Spending an appropriation is authorised by government approval of estimates for revenue and expenditure and recorded in the Estimates module of CBMS. NCEs must review, and where necessary, revise revenue and expenditure estimates at each estimates update (please see the most recent EMs for information on the budget process and estimates updates).

Authority to charge

  1. The legislative authority to retain certain receipts is not the same as authority to charge for goods and services, and/or to recover costs that a NCE has incurred.
    1. The PGPA Act and rules do not authorise a NCE to charge for goods and services.
    2. A special account does not authorise a NCE to charge for goods and services.
  2. To charge non-Commonwealth entities (such as individuals, companies or non-government organisations) for goods and services, or to recover costs, one or both of the following is required:
    1. policy authority to charge from government (by a decision of Cabinet or the Prime Minister);
    2. legislative authority to charge (in an Act related to the activity, for example, levies on industry).
  3. How much to charge may be specified in legislation (an Act, rule, regulation or other instrument). If not in legislation, how much to charge must be decided by government, by a Minister responsible for the activity or by a delegated accountable authority (a term defined in section 8 of the PGPA Act).
  4. Charging activities must be consistent with the Australian Government Charging Framework, available on the Finance website. For guidance on charging, contact the Charging Team in Finance (ChargingPolicy@finance.gov.au).
  5. If charging for an activity becomes regular (three years in a row) and/or material (over $1 million a year), the entity is advised to contact the relevant AAU or Charging Team in Finance to discuss reporting options.

When is an appropriation increased?

  1. An appropriation increase legally takes effect at the time a NCE records the amounts in its internal accounts and records (subsection 74(2) of the PGPA Act).  NCEs must also ensure that the CBMS records are also updated in a timely and accurate manner, as the data in CBMS is used to calculate the whole-of-government budget balances and for whole-of-government financial reporting.
  2. Cash received that represents retainable receipts must be transferred from a NCE’s bank account to the OPA in the Cash Management module of CBMS. This will increase the available amounts of cash against the relevant appropriation in CBMS. When the NCE requires the cash to make payments, it can submit a drawdown request in CBMS.
  3. Retainable receipts are reported publicly in the following financial and Budget documents:
  • Portfolio Budget Statements (PBS) – a NCE must report s74 Retained revenue in their annual PBS, in accordance with PBS guidance issued by Finance.
    • CCEs report external revenue in their annual PBS instead.
  • Budget Paper No. 4 (BP4) – all Commonwealth entities and Commonwealth companies in the general government sector must report revenue in the External Revenue column of the Agency Resourcing Table in BP4. It is important that entities maintain accurate records in CBMS where relevant, because BP4 is prepared using CBMS data.
  • Financial Statements – all Commonwealth entities must report receipts and revenue in its annual financial statements in its annual reports, consistent with the FRR and RMG-125 – Commonwealth Entities Financial Statements Guide.

Receipts that are not retainable

  1. Amounts that are administered in nature are generally not retainable under section 74 of the PGPA Act, with the exception of repayments (see “Repayment Receipts” below).
  2. Receipts that cannot be retained under section 74 of the PGPA Act include:
    1. receipts to offset expenditure that the NCE has already been appropriated for by Parliament (see subsection 27(6) of the PGPA Rule);
    2. receipts collected under legislation, regulations, rules or other legislative instruments (see subsection 27(6) of the PGPA Rule). For example:
      1. taxes (such as income taxes), except for GST in some circumstances;
      2. levies (such as customs levies collected on dutiable goods);
      3. fines (such as parking fines);
      4. statutory fees (such as legislatively-imposed fees for citizens utilising services of a regulator);
      5. statutory charges (such as legislatively-imposed charges for court costs);
      6. penalties (such as late-payment penalties).
    3. an amount debited against a special account managed by the NCE.
      Note: If a special account can be debited for payments, these must be made from and recorded as having been paid directly from the special account. No amounts may be transferred from the special account to a departmental annual appropriation item or an administered annual appropriation item.
  3. When a NCE collects receipts that cannot be retained, it must:
    1. remit the cash to the OPA;
    2. record the amount in the NCE accounts and records as being remitted to the OPA; and
    3. record the amount in the Cash Management module of CBMS (using the receipt type ‘administered receipt’ and with an appropriate title describing the amount being remitted).

Receipts that are retainable

Departmental receipts

  1. Subsection 74(1)(a) of the PGPA Act allows for a NCE’s most recent annual departmental item appropriation to be increased by nine kinds of receipts listed as ‘items’ in subsection 27(2) of the PGPA Rule. The Items are explained below:

Amounts which offset costs (PGPA Rule subsection 27(2), Item 1)

  1. Item 1 authorises retaining amounts that offset departmental activity costs of the collecting NCE. Amounts surplus to costs cannot be retained. Examples of such receipts which can be retained are amounts:
    1. for goods or services provided;
    2. for goods or services to be provided (pre-payments);
    3. for salary sacrifice services provided to employees;
    4. for selling or hiring out goods (including under a lease);
    5. for sub-leasing (for example, a building);
    6. for car parking provided to employees, consultants or contractors;
    7. for workers compensation to be provided to employees (for example, amounts received from Comcare);
    8. for services provided to another entity, such as:
      • staff to present at the other entity’s seminar;
      • staff seconded to work at another entity; or
      • providing human resource services to another entity.
    9. for staff to attend jury duty (amounts received either from a court or from an employee who was paid by a court);
    10. for conducting litigation or dispute resolution; or
    11. from investing (as permitted by the Finance Minister under a delegation of authority in the PGPA Act).
  2. This provision is not limited to a single financial year. An entity may collect prepayments in anticipation of future costs that they may offset, even if those costs occur in a different financial year, due to timing issues. Conversely, an entity may make payments and then collect the offsetting receipts in a different financial year, due to timing issues. Entities are reminded that once the receipt is credited to the most recent Departmental item, the receipt forms part of the Departmental appropriation item and therefore lapses after three years.  Please note that entities can only retain the costs of providing goods or services as agreed with client entities – entities should not recover costs unrelated to the provision of agreed goods and services, and it is recommended entities undertake a regular reconciliation process with clients to ensure only amounts covering actual costs are retained. For further advice, please contact the Special Appropriations Team.
  3. If an entity receives an amount surplus to costs incurred in delivering a specific good or activities, the surplus must be remitted to the OPA as general government revenue and recorded as an administered receipt in the Cash Management module of CBMS, or repaid to the client where appropriate.
    1. NCEs need to be able to demonstrate that they have reasonably considered the costs of delivering the activity. For example, they may refer to costings agreed with Finance, which inform the related government decisions that provided the policy authority to charge.
    2. Section 17 of the PGPA Act requires accountable authorities to encourage officials to cooperate with other bodies to achieve common objectives. NCEs may agree to jointly manage certain activities to achieve economies of scale when delivering Commonwealth outcomes. These arrangements are typically set out in a service agreement or Memorandum of Understanding, for example, a shared services agreement. A key element of such arrangements is the division of funding, and whether some NCEs will pay others for delivery of some goods and services for the group’s benefit. The receiving NCE would use Item 1 to retain and pool the contributions from other NCEs.

Sponsorships, subsidies, gifts, bequests or similar contributions (PGPA Rule subsection 27(2), Item 2)

  1. Item 2 authorises retaining monetary sponsorships, subsidies, gifts, bequests or similar contributions (i.e. receipts that involve no reciprocity and no consideration on the part of the Commonwealth). Provisions in the PGPA Act prohibit NCEs from providing such amounts to each other, particularly where they have already received an appropriation for the activities.
  2. Sponsorships, gifts, bequests or similar contributions received without the express purpose of contributing to the NCE’s departmental activities are received for the Commonwealth as a whole and should be remitted to the OPA as general government revenue (administered receipts).
  3. Examples of amounts covered by Item 2 include:
    1. cash (as distinct from goods) received from sponsors for a NCE to run a seminar or for an NCE to participate in a trade show;
    2. employment subsidies (for example, a monetary subsidy or incentive for staff of a NCE to participate in a program that encourages the engagement of particular groups of people, such as staff involved in national security activities, Defence Reserve activities, or to employ people with disabilities); and
    3. gifts of money or bequests from parties outside of the Commonwealth (not to be confused with trust or trust-like arrangements, which are dealt with in subsection 27(3)).
  4. Receipts cannot be retained under subsection 27(2) Item 2 if they were received:
    1. without an express purpose of contributing to the NCE’s departmental activities;
    2. from another NCE (NCEs cannot provide each other with monetary sponsorships, gifts, bequests or similar contributions, or subsidies other than government subsidies offered to all Australian entities); or
    3. for activities that have already been appropriated funding (subsection 27(6) of the PGPA Rule).

Monetary incentives or rebates (PGPA Rule subsection 27(2), Item 3)

  1. Item 3 authorises retaining monetary incentives or rebates in relation to procuring goods or services, for example:
    1. fuel tax rebates;
    2. cash incentives related to leasing a building; or
    3. cash back offers that accompany the purchase of a good or service (such as from manufacturers of electrical goods).

    Before accepting monetary incentives or rebates, NCEs must consider implications for receiving value for money in procurements and proper use of Commonwealth money.

Insurance payouts (PGPA Rule subsection 27(2), Item 4)

  1. Item 4 authorises retaining insurance payouts received in Australia or overseas, for example:
    1. amounts to cover building fit-out damaged by rain; or
    2. amounts as a result of motor vehicle accidents.

Damages and other compensation (PGPA Rule subsection 27(2), Item 5)

  1. Item 5 of authorises retaining amounts received as a result of compensatory amounts awarded by a court or payable under contract (which relate to departmental activities). It does not include penalties or punitive amounts, which are not compensatory and should be remitted to the OPA as general government revenue (administered receipts).
  2. Examples of amounts covered by Item 5 include receipts that are:
    1. damages or compensation payable under contract;
    2. negotiated compensatory out-of-court settlements;
    3. court-awarded contractual damages; or
    4. compensatory court-awarded costs.

Employee leave (PGPA Rule subsection 27(2), Item 6)

  1. Item 6 authorises retaining receipts related to employee leave, for example:
    1. the Commonwealth’s Paid Parental Leave scheme;
    2. Defence Force Reserve duties; or
    3. accumulated entitlements (received from a former employer).

Sale of departmental assets (PGPA Rule subsection 27(2), Item 7)

  1. Item 7 authorises retaining receipts related to selling departmental assets. Examples are the sale of vehicles, furniture, fittings, specialist military equipment and research equipment. Amounts under Item 7 are limited by subsection 27(7) to no more than: “5 per cent of the total departmental items for the NCE for the financial year”.
  2. ‘Total departmental items’ means the sum of all departmental items contained in the annual Appropriation Acts passed by Parliament during the financial year, for example Appropriation Act (No. 1) 2017-18, Appropriation Act (No. 2) 2017-18, Appropriation Act (No. 3) 2017-18, Appropriation Act (No. 4) 2017-18, Appropriation Act (No. 5) 2017-18 and Appropriation Act (No. 6) 2017-18.

FOI Requests (PGPA Rule subsection 27(2), Item 8)

  1. Item 8 authorises retaining receipts related to processing applications under the Freedom of Information Act 1982 (FOI Act). Fees charged must be consistent with the FOI Act.

Balance of a sunsetting special account (PGPA Rule subsection 27(2), Item 9)

  1. Item 9 of subsection 27(2) of the PGPA Rule authorises the retention of the balance of a sunsetting special account, subject to agreement from the Minister for Finance. This item can be used to replace special accounts that supported departmental activities with annual departmental appropriation.
    • Entities are advised to seek Finance comments on draft ministerial correspondence at least two parliamentary sitting periods before the relevant special account is expected to sunset. (Special.Appropriations@finance.gov.au).

Prepayments

    • Prepayments are amounts received in advance of delivering a related good or service.  Prepayments made to a NCE by another party that are departmental in nature, can be retained under Item 1 of subsection 27(2).
    • Nevertheless, a NCE may only accept such a prepayment if the accountable authority (or delegate) decides that it is in the best interest of the Commonwealth (as a whole) to do so. Otherwise, receipts should only be received in the financial year in which the good or service was delivered by the NCE.

Money held on trust

  1. Subsection 27(3) of the PGPA Rule allows a NCE to increase its most recent departmental item with amounts that relate to a trust or similar arrangement.
  2. For the purposes of section 8 of the PGPA Act, money held on trust is considered “relevant money” and must be handled in accordance with the PGPA Act and the PGPA Rule requirements for relevant money (for example, section 18 of the PGPA Rule).
  3. Before entering into a trust or trust-like arrangement, it is important to understand the legal, financial and other implications for the Commonwealth. NCEs are encouraged to obtain policy authority (a decision of Cabinet or the Prime Minister) before entering into such an arrangement.
  4. If a NCE holds money on trust for a non-Commonwealth entity (such as an individual, company or non-government organisation), that money forms part of the CRF. Therefore, an appropriation is required to spend the money, including repaying a trust benefactor.
  5. Entities are discouraged from establishing a trust (under a trust deed or a trust instrument) or accepting trust-like responsibilities unless it is expressly in the Commonwealth’s interest to do so, legal and resourcing implications have been considered, and appropriate policy authority from Cabinet or the Prime Minister has been sought (section 15 of the PGPA Act).
    1. For further advice and in particular before entering into a trust relationship that obliges investment of money, it is recommended that the NCE consult Finance in the first instance.
    2. Where such an arrangement exists, and obliges an NCE to invest a principal amount and earn returns or interest (including on bank accounts), the NCE must ensure it has the necessary delegations and approvals from the Finance Minister to invest money under section 58 of the PGPA Act and to accrue and spend bank account interest under banking policies.
    3. For further information, please contact the Governance Team in Finance (PMRA@finance.gov.au).
  6. Legal trusts are established under state and territory laws and usually require money to be held ‘separately’. This separation can be met by a NCE maintaining a separate bank account to support the money held on trust as part of its annual departmental appropriation.
  7. Additional transparency can be provided in the NCE’s annual report and on the NCE’s website. There are also specific financial reporting requirements for trust moneys. For further information on reporting and accounting for trust amounts, see the FRR and RMG-125 – Commonwealth Entities Financial Statements Guide.

Repayments

  1. For various reasons, a payment made by the Commonwealth may be subsequently returned by one or more recipients. A repayment receipt is the return of some or all of an amount that was earlier paid from an appropriation, which is limited in amount. Appropriations which are limited in amount include:
    1. administered items or departmental items in the schedules of annual Appropriation Acts;
    2. special accounts, the limit being the balance of the special account; and
    3. special appropriations which have a dollar limit specified in the relevant Act.
  2. Subsections 27(4) and (5) of the PGPA Rule provide for the retention of repayment receipts relating to a limited appropriation. The effect of these subsections is to re-credit an appropriation with the repayment. Some examples of when this could occur include:
    1. a NCE has overpaid a supplier of goods and services, and that person repays the excess amount;
    2. a NCE has made a grant payment, of which some has been returned by the recipients in accordance with the grant agreement;
    3. a NCE has made a payment mistake, such as payment to the wrong recipient, double-paying, or paying at the wrong time, and the recipients return the amounts paid in error.
  3. The appropriation which is increased is the one from which the original payment was made, for example:
    1. if a NCE paid an amount using its most recent departmental item, the repayment is credited to that departmental item; or
    2. if the NCE paid an amount using a departmental item in a previous Appropriation Act, an administered item in an Appropriation Act, a special appropriation limited in amount, or a special account, then the repayment received may be credited to the appropriation used, but only if that original appropriation still remains in force.
  4. If an appropriation has ceased, then it cannot be increased and related repayments must be remitted to the OPA as administered receipts, noting:
    1. annual Appropriation Acts cease after three years;
    2. special accounts established by legislative instruments (determinations) cease after 10 years; and
    3. if the appropriation is increased, the amount cannot be spent without policy approval from government to adjust expenditure estimates.
  5. If a payment is made from a special appropriation which is not limited in amount (i.e. an unlimited special appropriation) then all related repayment receipts are to be remitted to the OPA as administered receipts. There is no need for an unlimited special appropriation to retain repayments, as its spending limits and expenditure estimates can always be increased at any time (consistent with the appropriate policy approval processes).
  6. In accounting terms, not all receipts are extra revenue. In addition, depending on when the repayment is received (i.e. within the same financial year or in a subsequent year), the repayment may be accounted for differently. For further information on reporting and accounting for repayments, see the FRR and RMG-125 – Commonwealth Entities Financial Statements Guide.

Transferring cash collected

  1. Cash received that comprises retainable receipts must be transferred from a NCE’s bank account to the OPA. In the Cash Management module of CBMS:
    1. transactions related to retainable receipts are recorded using the identifier ‘Appropriation Receipts (s74)’.
    2. transactions related to repayments receipts are recorded using the identifier ‘Appropriation Repayments’.
    3. transactions related to the subsequent expenditure of retainable receipts or repayment receipts are recorded using the identifier ‘Drawdown’. This reflects an amount of cash being transferred from the OPA group of accounts to one of the NCE’s bank accounts.
  2. Transactions to reflect receipts will increase the available amounts of cash against the relevant appropriation balance in CBMS. When a NCE requires cash to make payments, it submits a drawdown request in CBMS, to receive the money back from the OPA.
  3. If another NCE, a CCE, a Commonwealth company, or other party, acts as an agent and collects receipts on behalf of a NCE, the NCE will remain accountable for and be required to report the receipts, either as retainable receipts if departmental in nature, or as administered receipts if administered in nature. The other party will also need to report amounts received and paid on behalf of the NCE.
    • Please see the “Disclosures by agent in relation to annual and special appropriations” section of the FRR for more details.
    • Please see the ‘Other CRF Money’ requirements in RMG-303 – Other CRF Money.
  4. Amounts received and credited to a special account are not retainable receipts and cannot be recorded as retainable receipts. Instead, these are recorded as increases to the balance of the special account.

Disclosure for retainable receipts

  1. Retainable receipts must be reported in the following annual publications:
    1. Portfolio Budget Statement (PBS), which are prepared by NCEs;
    2. Budget Paper 4 (BP4), Agency Resourcing Table, which is prepared by Finance;
    3. financial statements, prepared by NCEs in their annual reports.
  2. Retainable receipts also form part of the figures published in the Final Budget Outcome and the Consolidated Financial Statements, prepared by Finance on an annual basis.
  3. The reports described in (a) and (b) above are derived from CBMS, so it is essential for the figures entered in CBMS to be accurate.
  4. Entities must enter estimates of retainable receipts (as revenue or another appropriate classification) in the Estimates module of CBMS. These amounts are presented in the “External Revenue” column in the Agency Resourcing Table of BP4. The figures in this column are derived from a NCE’s revenue estimates in the Estimates module of CBMS, in particular revenue accounts that have a cash flow impact.
    • Reporting revenue (rather than receipts) recognises that NCEs are not necessarily resourced with all receipts that they collect in a year (see the section “Receipts that are not Retainable” above).
    • Further information can found in the FRR, RMG-125 – Commonwealth Entities Financial Statements Guide and Quick Reference Guide – Budget Paper No. 4  (available in CBMS).
    • Current and prior years’ Agency Resourcing Tables are available on the BP4 pages of the Treasury’s Budget website here.

Frequently Asked Questions – Retainable receipts

1. Can a NCE retain earnings generated from its administered activities to cover costs?

No. Administered receipts are general government revenue for which the entity does not have policy authority to retain, and must be remitted to the OPA (see the “Receipts that are not retainable” section).

If a NCE needs an additional administered appropriation, it must consult its AAU regarding whether a New Policy Proposal would be required. If policy approval is given, funding would then be provided in the next annual Appropriation Act.

2. Can a NCE retain earnings generated from an administered asset (such as land or a building) as retainable receipts?

Generally, no. Most earnings generated from an administered asset are also administered in nature, and so are not covered by section 27 of the PGPA Rule. However, there are a small number of cases in which such earnings may be regarded as departmental in nature.

The Finance Minister can approve reclassification of amounts between administered and departmental. Reclassifications cannot be made retrospectively, so any changes in funding will be reflected in the next Appropriation Bills.

The NCE should contact their AAU in Finance to discuss the issues.

3. Can a NCE expend a receipt it has retained, in anticipation of receiving policy authority to make the payment?

No. A NCE that has retained amounts in accordance with section 27 of the PGPA Act can only spend these amounts after the NCE has received the relevant policy authority from government, even in cases where government is likely to provide it shortly.

4. Can a NCE retain money that someone has left the NCE in a will, or through another type of contribution?

Yes. Bequests can be retained if the will specifies the amount is to be applied towards the departmental operations of the NCE and is applied to activities that are not already funded. See Item 2 in subsection 27(2) of the PGPA Rule.

Other contributions from persons other than the Commonwealth can also be retained under Item 2 in subsection 27(2) of the PGPA Rule.

If a will, trust, deed, or other contribution specifies that money is to be applied towards the government in general or for an administered purpose, the NCE should endeavour to return the money to the payer. If this is not possible, then the money is considered general government revenue and must be remitted to the OPA as an administered receipt.

5. Can a NCE retain a repayment related to an amount paid from an unlimited special appropriation?

No. If a NCE makes payments from an unlimited special appropriation (for example, as part of a demand-driven entitlement program like social security benefits), then any repayment receipts are to be remitted to the OPA as administered receipts.

If this results in a need to expend more from the unlimited special appropriation at a later time, then the NCE needs to increase the appropriation’s spending limits in the Cash Management module of CBMS and its expenditure estimates in the Estimates Module of CBMS (consistent with the appropriate policy authority and internal approvals processes, which may vary from appropriation to appropriation).

6. Can a NCE retain a repayment related to an amount paid in a prior year?

Yes, in some cases:

  • for annual departmental or administered annual appropriations: yes, the relevant appropriation can be increased, if the appropriation is still in force at the time of receipt. 
    • For example, a NCE made a payment against Appropriation Act (No. 1) 2016‑17. It received a repayment in August 2017. As the original Appropriation Act remains in force until 1 July 2019, the NCE may
      re-credit that appropriation.
  • for special accounts: yes, the relevant special account can be increased, if the Act or determination that established it is still in force at the time of receipt.
  • for limited special appropriations: yes, the relevant appropriation can be increased, if the appropriation is still in force at the time of receipt.
  • for unlimited special appropriations: no, repayment receipts are remitted to the OPA as administered receipts. (See Question 5 above.)

7. Can a NCE retain money collected in implementing the Shared and Common Services Program as retainable receipts?

Yes, if the receipts collected are fees for providing goods and services (including prepayments). Refer to Item 1 in subsection 27(2) of the PGPA Rule.

8. Can a NCE increase an annual administered appropriation with money contributed by another government (such as a state) for a joint activity?

No, the amount cannot increase an annual administered appropriation.

Alternate options would be to seek agreement from the Cabinet/Prime Minister to be reappropriated the amounts received, or to use an existing special account (such as a Services for Other Entities and Trust Moneys Special Account) to retain the amounts received. Should an entity wish to use the latter approach, they should first discuss this with the Special Appropriations Team in Finance.

9. Can a NCE increase a departmental appropriation with a reimbursement of costs from another NCE, for staff seconded to that other NCE?

Yes, for amounts that “offset costs”. See Item 1 in subsection 27(2) of the PGPA Rule.

10. A NCE uses a departmental special account to hold employee provision balances for employees whose position is funded by the special account.  Can a NCE debit a special account and credit a departmental appropriation for the leave provision transfer when an employee moves to a departmental appropriation funded position?

No. A special account determination may contain purpose clauses that allow for payments of provision transfers between entities however, the PGPA Act does not allow a NCE to credit a departmental appropriation item from a special account for an intra-departmental transfer.

11. Can a NCE use section 27 of the PGPA Rule to transfer amounts relating to non-financial assets to/from another NCE?

No. Amounts appropriated to a NCE (entity A) to maintain its non-financial assets, such as the Departmental Capital Budget, cannot be ‘paid’ to another NCE (entity B) to maintain entity B’s assets because entity A would not be receiving a good or service in return for such a payment. Should entity A wish to contribute towards joint assets held by entity B, entity A should instead seek the Finance Minister’s approval to reduce its appropriations and increase entity B’s appropriations via the Budget process and next available appropriation Bills. Please see the most recent EM on capital budgeting, or contact your AAU in Finance.

Non-financial assets themselves can be gifted away in limited cases (see section 66 of the PGPA Act); however, appropriations can only be transferred between NCEs using the provisions of section 75 of the PGPA Act, or where the policy authority allows the reduction of the appropriations of one entity and the increase of another’s.

12. Can an NCE reclassify amounts retained as receipts as a Departmental Capital Budget?

No. The receipts must continue to be reported as departmental revenue, and reported as an adjustment to the entity’s departmental appropriation in the Appropriations note to the financial statements. Please see sections 37(a), 43(b) of the PGPA (Financial Reporting) Rule 2015 and associated guidance on the Finance website.

Entities can however spend the receipts retained on the departmental operations relating to the receipt, including capital expenditure. Entities should refer to the relevant capital budgeting policy.

Flow Chart – Retaining a Receipt

Retaining a Receipt Diagram

Flow Chart - Spending a Retained Receipt

Spending a Retaining Receipt Diagram

Abbreviations used

AAU Agency Advice Unit (in Finance)
ATO Australian Taxation Office
BP4 Budget Paper No. 4
CBMS Central Budget Management System
CFO Chief Financial Officer
CFS Consolidated Financial Statements
CRF Consolidated Revenue Fund
CCE Corporate Commonwealth entity
EM Estimates Memorandum
FOI Act Freedom of Information Act 1982
FRR Public Governance, Performance and Accountability
(Financial Reporting) Rule 2015
NCE Non-corporate Commonwealth entity
OPA Official Public Account
PBS Portfolio Budget Statement
PGPA Act Public Governance, Performance and Accountability Act 2013
PGPA Rule Public Governance, Performance and Accountability Rule 2014
RMG Resource Management Guide

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