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Supplementary Statements

Statement of Unappropriated Expenditure
for the year ended 30 June 2016

Parliament's approval for the incurring of expenses or capital expenditure is generally given either by means of an Appropriation Act or an Imprest Supply Act followed by an Appropriation Act.

Imprest Supply Acts authorise the Government to incur expenses and capital expenditure, in advance of the passing of an Appropriation Act, up to a specified amount. Cabinet rules require any use of imprest supply to be authorised by a specific Cabinet decision or in some instances by delegated authority to joint ministers. All expenses and capital expenditure incurred under an Imprest Supply Act must be subsequently approved by Parliament prior to the end of the financial year. If not approved by Parliament prior to the end of the financial year, then the expenditure must be validated in an Appropriation (Confirmation and Validation) Act.

Expenses or capital expenditure that is incurred without an appropriation or other authority (such as an Imprest Supply Act) or that is incurred under imprest supply but not included in an Appropriation (Supplementary Estimates) Act by the end of the financial year, is classed as “unappropriated expenditure” and remains so until it is subsequently validated by Parliament.

Unappropriated expenditure is subject to specific requirements in the Public Finance Act 1989:

  • it must be disclosed in the annual financial statements of the Government, and of the relevant administering department, and
  • it must be retrospectively validated by Parliament through the passing of an Appropriation (Confirmation and Validation) Act.

The following table describes the various types of unappropriated expenditure that can typically occur during the year. Categories (A) to (C) represent unappropriated expenses with authority, whilst categories (D) to (F) represent unappropriated expenditure without authority. All unappropriated expenditure is reported and validated via an Appropriation Bill in the following year.

Category of unappropriated expenditure Reporting requirements to Parliament under the Act
(A)  Approved by the Minister of Finance under Section 26B of the Public Finance Act 1989 Where the amount in excess (but within the scope) of an existing appropriation was within $10,000 or 2% of the appropriation, Section 26B of the Act authorises the Minister of Finance to approve these items.  Such items must also be confirmed by Parliament in the Appropriation Act for the year.

(B)  With Cabinet authority to use imprest supply but in excess of appropriation prior to the end of the financial year

(C)  With Cabinet authority to use imprest supply but without appropriation prior to the end of the financial year

(D)  In excess of appropriation and without prior Cabinet authority to use imprest supply

(E)   Outside scope of an appropriation and without prior Cabinet authority to use imprest supply

(F)   Without appropriation and without prior Cabinet authority to use imprest supply

Where the unappropriated items exceed the limits available for approval under Section 26B, they fall into one of five categories of unappropriated expenditure. 

All such instances are unlawful unless validated by Parliament through an Appropriation Act (Section 26C of the Act).   

The validating legislation will be accompanied by a report to the House of Representatives that sets out each unappropriated item together with an explanation made by the Minister responsible for the appropriation. 

The following graph shows the number of unappropriated items by year:

Number of unappropriated items by year
Number of unappropriated items by year
Unappropriated Expenditure by Category
30 June
2016
Number
30 June
2015
Number
30 June
2016
$m
30 June
2015
$m
  By category  
1 5 Approved by the Minister of Finance A 2 21
-   Cabinet authority to use imprest supply but in excess of appropriation B
1 Cabinet authority to use imprest supply but without appropriation C 3
6 7 Without Cabinet authority and in excess of appropriation D 52 31
1 3 Without Cabinet authority and outside scope E 11 11
5 8 Without Cabinet authority and without appropriation F 10 14
1 Other
14 24 Total unappropriated expenditure 78 77

In 2016 there were a total of 811 appropriations (2015: 868). Of these 14 or 1.7% were unappropriated (2015: 24 or 2.8%).

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