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 provided information to all agencies regarding the need for risk assessments in relation to compliance with statutory conditions on payments from special appropriations, including special accounts. The possibility of this being an issue for Fair Work Commission was reported in the notes to the 2012-13 financial statements.
During 2013-14, Fair Work Commission reviewed exposure to risks of not complying with statutory conditions on payments from appropriations. The plan involved:
- identifying each special appropriation and special account;
- 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; and
- determining procedures to confirm risk assessment in medium risk cases and to quantify the extent of non-compliance, if any, in higher risk situations.
Fair Work Commission identified two appropriations involving statutory conditions for payment, comprising:
- Judges Pension Act 1968 special appropriations; and
- Section 28(2) of Financial Management and Accountability Act 1997 special appropriation for refund of application fees.
As at 30 June 2014 this work had been completed in respect of both the special appropriation with statutory conditions for payment (representing $4.802m expenditure in 2013-14 (2012-13: $4.515m) for Judges Pension Act 1968 payments and $0.508m 2013-14 (2012-13: $0.387m) for refund of application fees).
During 2012-13 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. Fair Work Commission has again in 2013-14 year reviewed its processes and controls over payments for these items to minimise the possibility for future breaches as a result of these payments. Fair Work Commission has determined that there is a low risk of the certain circumstances mentioned in the legal advice applying to the department.
Work conducted to date has identified no issues of non compliance with Section 83.