Classification of payments to other levels of government for specific purposes and Commonwealth own-purpose expenses

The guidance on this page is relevant to General Government Sector entities.

The key points relevant to this guidance are as follows:

  • Laws/rules/policy: The federal financial relations (FFR) framework established by the Intergovernmental Agreement on Federal Financial Relations (IGA) and supported by the Federal Financial Relations Act 2009 and the COAG Reform Fund Act 2008 was introduced on 1 January 2009.  The FFR framework centralised payments classified as payments to and through the States and Territories for general and specific purposes.
  • Purpose: To provide guidance to entities on the classification of payments to other levels of government for specific purposes as distinct from Commonwealth own-purpose expenses (COPEs) that may involve payments to other levels of government.  The correct classification of payments is important as this determines how each payment is reported in the Australian Government’ budget papers; which Commonwealth entity is responsible for making and reporting the payment in financial statements and whether payments are subject to the FFR framework and require an agreement under the IGA, or the Department of Finance (Finance)-issued Commonwealth Grant Rules and Guidelines (CGRGs). This Guide replaced Finance Circular 2010/02 – Classification of Payments to the States and Territories and Commonwealth Own-Purpose Expenses.

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Last updated: 11 November 2015