CDDA Scheme: Defective Administration and Loss

What the CDDA Scheme Covers

The CDDA Scheme covers eligible non-corporate Commonwealth entities and their own administration. It does not apply to corporate Commonwealth entities or parliamentary departments. Identify the responsible entity before assessing the substance of the claim.

Finance’s CDDA Scheme guidance directs claims to the entity whose administration caused the alleged loss. Finance owns the policy but does not determine another entity’s claim or review its decision. Other available remedies must be explored first.

Establish whether a statutory remedy or a claim involving legal liability is the appropriate pathway. A different discretionary mechanism, act of grace, has its own purpose and assessment. It is not an appeal from a CDDA decision.

Record whose conduct is alleged, what function that person performed and which entity administered it. RMG 409 excludes contracted providers’ own actions from the scheme. Where a complaint concerns both a provider and an agency, separate their conduct before deciding which allegations belong in the CDDA assessment.

Identify the Alleged Defective Administration

Identify the particular act or omission and compare it with the administration expected in those circumstances. A disappointing outcome or a financial loss alone does not establish a defect.

The Attorney-General’s Department’s scheme explanation identifies four forms of defective administration:

• A specific, unreasonable failure to follow existing administrative procedures.
• An unreasonable failure to establish appropriate procedures.
• Incorrect or ambiguous advice in the circumstances.
• An unreasonable failure to give proper advice within the officer’s power and knowledge, including advice reasonably obtainable by the officer.

For each allegation, retain the procedure or advice that applied, the records of what happened and the agency’s explanation. If the complaint concerns advice, preserve the actual wording and context. Distinguish an incorrect statement from a claimant’s interpretation of an accurate one.

A useful allegation record names the expected action, the observed departure and the evidence supporting each. For example, an acknowledgement email can prove receipt of documents. It does not establish that the application was complete or that a payment was already due.

Incorrect assessment: a claimant incurred a fee after an adverse decision, so the administration was defective.

Correct assessment: identify the alleged procedural failure, determine what the records establish and separately test whether that failure caused the fee.

Trace the Defect to the Claimed Loss

Trace the alleged defect through the claimant’s actions to the financial consequence. Keep the claimant’s account, source records and assessment of causation distinguishable.

Consider a fictional claim about incorrect agency advice. A person says an official told them a payment instruction had been corrected. Two weeks later, the original instruction caused a failed payment and several charges.

Test competing explanations. A failed payment might also result from insufficient funds or an unrelated account restriction. A debit appearing after the advice proves timing. The payment-return reason and account records help establish the cause.

Finance’s Resource Management Guide 409 addresses reasonable reliance and foreseeability for pure economic loss caused by incorrect or ambiguous advice. It also requires assessment of reasonable mitigation in the claimant’s actual circumstances.

Record when the claimant learned of the error, what corrective options existed and what action they took. Assess whether a proposed alternative was genuinely available. Avoid treating an assumed ideal response as evidence that this claimant could have prevented the loss.

Reconcile the Financial Loss Schedule

Reconcile every claimed amount to evidence and explain each adjustment. The schedule must distinguish a recorded payment from the assessment that it is compensable.

In the fictional claim, the claimant presents $1,800 of gross charges. The following arithmetic organises the assessment. It does not decide entitlement.

Record why each adjustment applies and confirm that the same recovery is counted once. If the value of a retained benefit is disputed, preserve both calculations and explain the unresolved valuation.

Give every row a source identifier, such as statement file and page, invoice number or refund reference. Retain the original documents alongside the calculation. A second reviewer can then reproduce the $1,200 total and identify the $400 causal dispute without inferring either from the bank balance.

For numerous accounts, FinTrace creates a searchable transaction ledger with direct references to source statement pages. The assessment team can use that payment evidence alongside invoices and agency correspondence when reconciling the loss schedule.

Keep application-preparation costs and any interest component separately identified. RMG 409 generally excludes these from compensation calculations. An expense incurred because of the alleged defect needs its own analysis, distinct from the cost of preparing the claim.

Prepare the Recommendation and Decision Record

Prepare a decision record that connects each allegation to the evidence, causal finding and proposed treatment of loss. Include the reasons for rejecting a claimed amount as clearly as the reasons for including one.

Use an ordered file review before submitting the recommendation:

1. Identify the responsible entity, applicable scheme guidance and decision-maker’s specific authority.
2. State each alleged defect and the evidence supporting or contradicting it.
3. Set out the causal chronology, alternative explanations and mitigation assessment.
4. Attach the reconciled schedule, source references and treatment of contested amounts.
5. Record outstanding issues, the claimant’s response to adverse material and the recommended outcome.
6. Retain the authorised decision and reasons, then reconcile any approved payment to its release record.

Under RMG 409, an official deciding a CDDA claim acts through express ministerial authorisation, separately from general expenditure authority. Confirm that authorisation before presenting a recommendation for decision. Give the claimant procedural fairness, including an opportunity to address adverse material relied on.

Use the responsible agency’s published submission and review arrangements. For example, the Aged Care Quality and Safety Commission’s CDDA process uses an application form and provides a formal decision with reasons. Its published approach allows reconsideration on new and relevant evidence and identifies the Commonwealth Ombudsman complaint route. These are the Commission’s arrangements, not universal filing requirements.

Finance’s general guidance identifies the Commonwealth Ombudsman for complaints, with the Inspector-General of Taxation pathway for Australian Taxation Office matters. CDDA does not itself create a tribunal appeal right. A separate statutory entitlement to merits review must be established under the law governing the decision concerned.

Before finalising the file, ensure the decision explains the defect finding, the causal conclusion and the amount approved or refused. Identify the actual reconsideration or complaint route in the outcome letter so the claimant can act on it.