Financial Delegations: Authority and Approval

Locate the Source of Financial Authority

Financial authority starts with the law governing the entity and the particular decision. Record the government, entity type and source provision before looking for a person’s approval limit.

For a non-corporate Commonwealth entity, section 23 of the Public Governance, Performance and Accountability Act 2013 addresses arrangements and commitments of relevant money. Section 110 provides for written delegations, subject to its exclusions and conditions. These provisions establish the starting point for an instrument check.

Keep the following distinctions in the file.

Authority or control	What it establishes	What to inspect
Statutory delegation	A person can exercise a specified statutory power under a delegation	Enabling provision, signed instrument and directions
Authorisation	A person can act through an authorisation whose legal effect depends on its source	Express or implied basis, permitted acts and conditions
Internal approval limit	An internal control allocates approval responsibility	Instructions and limit schedule, alongside the underlying legal authority
Available funding	Money is available from a lawful funding source	Relevant funding records, separately from the person’s power

Finance’s authorisation explanation distinguishes express statutory authorisation from implied authorisation. Under implied authorisation, an official acts for the authorising person, who retains the statutory power. Avoid treating every document labelled an authorisation as legally identical.

Verify the Delegate and Effective Instrument

Verify the instrument against the person and decision at the time authority must be exercised. Use the signed instrument and all applicable schedules, amendments and directions.

Follow the chain from the person granting the power to the proposed decision-maker. Identify the office or class of officials covered, then connect the individual to it through appointment or personnel records. For an acting officer, read the instrument’s wording and the applicable appointment rules. Record whether that officer falls within the described class throughout the relevant acting period.

A published Commonwealth example shows why wording matters. Treasury’s Community Grants Hub housing-program delegations identify officials holding, occupying or performing specified positions. The instrument also contains program restrictions, financial limits and directions. Its wording illustrates an instrument-specific inquiry, without establishing authority for an unrelated agency or purchase.

Compare the signed authority with the delegation register, position description and finance-system access. A register helps locate authority. A job description explains responsibilities. System access shows what a user can do technically. If these records disagree, resolve the discrepancy against the operative legal documents before relying on the approval.

Test Limits, Conditions and Subdelegation

Test the power against the whole proposed decision and the instrument’s own measure of value. Read its treatment of tax, variations, related commitments and any period-based limit. Also check purpose restrictions, consultation requirements and excluded transaction types.

Consider this fictional purchase by a non-corporate Commonwealth entity. An officer has authority under a hypothetical instrument to approve one arrangement up to $20,000, including GST. One proposed arrangement costs $24,000, billed through two $12,000 invoices.

Incorrect assessment: approve each invoice because each is below $20,000.

Correct assessment: apply the hypothetical instrument’s arrangement limit to the $24,000 commitment and refer it to an appropriately authorised decision-maker.

The example’s limit is invented to explain the check. It creates no government-wide aggregation rule. Where the real instrument uses different wording, assess the connected transactions under that wording and relevant instructions.

A delegate also needs authority to pass a power onwards. For Commonwealth decisions, examine the applicable delegation provision and every instrument in the chain. Section 110 contains express provisions governing further delegation, but a particular officer’s delegation must actually confer the necessary power. Sending an approval request to a colleague does not create it.

Distinguish Approval, Commitment and Payment

Approval, entry into an arrangement and payment release can involve different decisions and evidence. Map them separately, even when one authorised officer performs several steps.

Finance’s guidance on arrangements and commitments explains the Commonwealth authority and written-record requirements. An official who approves a commitment must record that approval in writing. A verbal approval must be recorded as soon as practicable afterwards.

Decision point	Authority question	Evidence to retain
Proposed expenditure	Who can approve this commitment on these terms?	Proposal, value calculation, applicable authority and approval
Arrangement	Who can enter into the contract or other arrangement?	Executed terms and the signatory’s authority
Variation	Does the change require another exercise of power?	Changed scope, revised value and relevant approval
Payment release	Who can release this payment under the entity’s controls?	Invoice, receipt or acceptance evidence and release record

A budget allocation establishes neither the approver’s delegation nor the signatory’s authority. A procurement approval may address a purchasing process while a contract records agreed obligations. Payment release records the disbursement step. Connect these records explicitly instead of assuming that one approval covers every act.

Build the Government Lawyer’s Decision Record

Build a record another reviewer can follow from the source of power to the resulting payment. Give each document a stable reference and preserve the version relevant to the decision.

For the fictional $24,000 arrangement, follow this review sequence:

1. Identify the entity and statutory basis for the proposed arrangement.
2. Retain the operative instrument and locate the position permitted to approve $24,000 on the proposed terms.
3. Match the named approver to that position and record any acting appointment relied on.
4. Document the total commitment, GST treatment and satisfaction of conditions before approval.
5. Connect the approval to the executed arrangement, invoices and payment records.
6. Record the reviewer’s conclusion and any remaining authority question separately from the transaction reconciliation.

Suppose the bank statement confirms both $12,000 payments, but the file contains only the lower-limit officer’s approval. The payment evidence establishes an outflow. It leaves an authority gap requiring legal assessment. Preserve that distinction in the review finding, including what instrument or approval is missing and which decision it affects.

For a large payment record, FinTrace converts bank statements into a searchable ledger with references to the source pages. That gives the legal team an inspectable payment trail alongside the separate instruments and approval records.

Respond to a Gap or Change in Authority

Refer an absent instrument, changed position or approval outside a limit to the responsible finance and legal teams before relying on it for further action. Identify whether the problem concerns missing evidence, an ineffective instrument or an act outside the power granted.

Retrieve the instrument history and appointment records. Compare commencement, revocation and replacement provisions with the decision chronology. Ask the responsible team to assess continuing commitments and any required escalation under the entity’s instructions. Finance’s risk and control guidance places delegations and authorisations within the entity’s control arrangements.

Keep corrective action separate from the legal assessment of the original act. A later approval does not, by itself, establish that an earlier defective exercise was valid. The available response depends on the governing law, instrument and facts, including any existing contractual obligations.

Before closing the file, record the authority conclusion against the decision and decision-maker, with the supporting instrument. Assign any unresolved issue to its responsible assessor.