Overpayments made as a result of processing errors

Over the last four years, we have disclosed (in our financial statements) instances where overpayments to taxpayers have resulted in a breach of section 83 of the Constitution (refer Note 24C, ATO financial statements). While these overpayments are innocent in nature, immaterial in terms of volume and value, and are usually the result of an inadvertent error, we are required to disclose them as they relate to standing appropriations in section 16 of the Taxation Administration Act 1953.

We originally identified this issue in 2007-08 and since then have been pursuing possible resolutions, including consultation with the Treasury about a legislative solution. In August 2011, the Department of Finance and Deregulation advised chief financial officers of all Financial Management Act agencies that recent legal advice indicated the issue may apply to any agency with a special appropriations and special account. As a result, the Department of Finance and Deregulation is planning to investigate the potential for a whole-of-government solution. Regardless of the timing of the whole-of-government solution, we intend to pursue an ATO-specific standing appropriation solution and plan to have this in place before 30 June 2012, subject to government approvals and legislative priorities.

    Last modified: 31 Oct 2011QC 28036