Natural Resources Management (Financial Assistance) Act 1992

The Act directly affects three broad classes of entity.

First, State and Territory governments (defined in s.4(1) to include the ACT and the Northern Territory) are both potential recipients of financial assistance under s.5 and participants in the joint approval process for projects. Their auditors-general or departmental heads are required to furnish compliance certificates under s.9(3).

Second, “persons” within the extended definition in s.6(1)—associations, authorities, bodies, institutions, organisations whether incorporated or not—may enter agreements under s.6. This captures NRM regional bodies, catchment management authorities, industry associations, landcare groups, research institutions and private contractors. These parties must comply with the audit, reporting and repayment regimes in ss.8–10 and, where applicable, assign intellectual property or repay income derived from project outputs (ss.10(2)–(4)).

Third, Commonwealth officers and the Minister exercise significant discretions. The Minister approves projects (s.5(1)), lays agreements before Parliament (s.5(4)), makes advances, determines repayment amounts, and issues authorisations. Authorised officers (appointed under s.4(2)) enter agreements on behalf of the Commonwealth (s.6(2)), receive audit statements and certificates (s.9), demand reports, and trigger repayment obligations. The Secretary and APS employees may receive delegations of trust-management functions under s.12A.

Indirectly the Act affects landholders, farmers, indigenous land management groups and the wider community who participate in or benefit from funded projects. Because funding is tied to “integrated approaches” and “ecologically sustainable development”, the Act influences the design of on-ground works across agricultural landscapes, river systems and native vegetation corridors. Accountants, auditors and lawyers advising recipients must understand the strict certification and claw-back provisions. Finally, Parliament receives copies of every agreement and annual reports, giving it oversight of expenditure.

Duties of payees are extensive. They must:

• Ensure projects are carried out in accordance with the agreement (s.8(3)(b)).
• Furnish expenditure statements and compliance certificates before any payment (s.9(2)).
• Permit inspection and copying of all project-related documents at reasonable times (s.9(6)).
• Provide activity reports and a final project report on request or upon completion (ss.9(7)–(8)).
• Repay amounts where conditions are breached or overpayments have occurred (ss.8(3)–(4)).
• Where the agreement so provides, remit net income derived from project property or patents, assign such property or patents to the Commonwealth, or pay the Commonwealth a share of disposal proceeds (s.10).

Duties of the Commonwealth/Minister include:

• Causing agreements and amendments to be tabled within 15 sitting days (s.5(4)).
• Preparing and including an annual report in the Department’s annual report (s.26).
• Dealing with trust moneys and conditionally gifted moneys in accordance with the relevant obligations (s.12(1)).
• Maintaining separate accounts for trust and conditional moneys (s.12(2)).

Rights are largely procedural. Payees have the right to receive payments once statutory conditions are satisfied and to receive advances where the agreement or s.5(5) so provides. The Minister and authorised officers have broad rights of access to records and information. The Minister may deduct repayable sums from future payments (s.8(5)), giving the Commonwealth a set-off right. Recipients of trust or conditional gifts retain the protection that those moneys cannot be applied contrary to the trust or condition (s.12(1)), and the Minister’s delegation power under s.12A is constrained so that it cannot be exercised inconsistently with the trust or condition.

The Act creates no private right of action for third parties; enforcement is through administrative repayment demands and, ultimately, debt recovery by the Commonwealth.

The Act contains no criminal offence provisions or pecuniary penalty units. Enforcement is civil and contractual. The principal sanctions are repayment obligations and set-off.

Under s.8(3), if an authorised person is satisfied of non-fulfilment of a condition or non-performance of a project, the payee must repay the whole or a specified part of the payment. Section 8(4) creates a statutory debt for the amount by which total payments exceed amounts that have become due. These are recoverable as ordinary debts owed to the Commonwealth. The authorised person’s “satisfaction” is an evaluative judgment, presumably reviewable under the Administrative Decisions (Judicial Review) Act 1977 on ordinary grounds.

Section 8(5) permits deduction from future payments, a self-executing recovery mechanism. Agreements may also require repayment of net income or the value of assigned property (s.10), adding further contractual repayment obligations.

Audit non-compliance has a practical rather than formal penalty: no entitlement to payment arises until the statement and certificate are provided (s.9(2)). This operates as a condition precedent to release of funds.

Because the Account is a special account under the Public Governance, Performance and Accountability Act 2013, misapplication of its moneys could engage that Act’s accountability and audit provisions, including potential Auditor-General scrutiny. However the 1992 Act itself does not create additional enforcement machinery.

The Act is expressly linked to the Public Governance, Performance and Accountability Act 2013 (PGPA Act). The Natural Resources Management Account is a special account for PGPA purposes (s.11(2)), and interest on investments must be credited to it (s.11(3)). Section 12 subordinates the general operation of the PGPA Act to trust and conditional-gift obligations, except for s.58 of the PGPA Act which continues to govern investment by the Commonwealth.

It repealed the National Water Resources (Financial Assistance) Act 1978 and the Soil Conservation (Financial Assistance) Act 1985 (s.24) but preserves the legal effect of agreements made under those Acts (s.25). Any repayments or credits referable to those legacy agreements flow into and out of the Account (ss.11(4)(b) and 11(5)(a)).

The definition of “officer” in s.4(1) picks up persons appointed or engaged under the Public Service Act 1999, thereby linking staffing and delegation arrangements to that statute. The delegation power in s.12A is limited to the Secretary or APS employees in the Department and must be exercised in accordance with ministerial directions.

Qualified accountants for the purposes of audit certificates are defined by reference to registration under State or Territory law or membership of Chartered Accountants Australia and New Zealand or CPA Australia (s.9(5)). This imports professional standards and disciplinary regimes from those bodies.

The requirement to table agreements (s.5(4)) engages parliamentary oversight procedures. Annual reporting under s.26 is incorporated into the Department’s annual report, satisfying broader public-sector reporting obligations.

The Act does not displace general Commonwealth financial management or fraud provisions; misuse of funds could still attract Criminal Code Act 1995 offences relating to obtaining financial advantage by deception or dishonesty.

The text reflects amendments made after 1999. The Account was originally established by the Financial Management Legislation Amendment Act 1999 (note to s.11(1)) and is now expressed to be a special account under the PGPA Act 2013, replacing the earlier Commonwealth Authorities and Companies Act 1997 framework. This change aligns the Account with contemporary Commonwealth resource-management terminology and investment rules.

Section 12A, dealing with delegation of trust and conditional obligations, is a later insertion. It was added to improve administrative efficiency by allowing the Minister to delegate detailed trust-management functions to the Secretary or APS employees while preserving the safeguard that neither delegation nor directions may contradict the terms of the trust or condition. The amendment reflects a broader trend toward delegable ministerial powers in financial legislation.

The objects in s.3 were drafted in 1992 to capture the then-emerging language of “ecologically sustainable development” and “integrated” NRM, anticipating the National Strategy for Ecologically Sustainable Development (1992) and subsequent natural resource management reforms. The repeal of the two predecessor Acts and the transitional provisions in s.25 were designed to rationalise overlapping funding streams into a single statutory vehicle.

No further substantive policy expansion appears in the provided text; later policy shifts (for example the move to Caring for Our Country and subsequent regional NRM funding programs) have operated through appropriations and program guidelines made under this Act rather than by amending its core architecture.

The source text contains no reference to any decided cases. Because the Act is a funding statute rather than a regulatory one, it has generated limited reported litigation. The repayment and set-off mechanisms in s.8 are framed as statutory debts arising upon an authorised person’s state of satisfaction; any challenge would likely proceed by way of judicial review of that satisfaction rather than as a contractual dispute. The requirement that the authorised person be “satisfied” imports a Wednesbury-type reasonableness standard, but no specific High Court or Federal Court authority is recited in the Act.

Controversies in the broader NRM funding domain have typically concerned the adequacy of consultation with regional bodies, the transparency of competitive grant processes, and the extent to which funding conditions respect landholder property rights. None of these are addressed on the face of the statute. The mandatory audit and reporting conditions in s.9 have occasionally produced administrative friction where small community groups struggle to obtain qualified-accountant certificates, but again the Act itself is silent on such operational difficulties.

The preservation of legacy agreements under s.25 has the potential to create dual regimes (old agreements continuing under repealed Acts alongside new agreements), which could generate disputes over which set of conditions governs a particular project. The Act resolves this by making transitional continuity “subject to the provisions of any agreement under this Act”, thereby giving new agreements precedence.

Most practitioners assume that once an agreement is signed the funding is secure; in fact every payment remains subject to the overlay conditions in ss.8–10 regardless of the agreement’s terms. An authorised person’s unilateral satisfaction that a condition has been breached triggers an immediate statutory repayment obligation—there is no requirement for a court order or even procedural fairness expressly stated in the Act.

The definition of “natural resources management” in s.4(1) is wider than many realise. Paragraph (b) captures any activity relating to the management of “any other natural resources” provided it is for the purposes of managing soil, water or vegetation. This can pull in biodiversity, carbon sequestration or even certain tourism projects if linked to the primary resources.

Section 9(2) is a trap for the unwary: the payee is “not entitled to a payment” until both the approved-form statement and the certificate are given. Even if the project has been completed perfectly, cash-flow can be halted by a paperwork omission. For non-State payees the certificate must come from either the head of the organisation (if its accounts are statutorily audited by the Auditor-General) or a qualified accountant; many community groups discover too late that their internal auditor does not qualify.

The trust and conditional-gift rules in s.12 operate “in spite of anything in this Act” (other than s.12(2)) and the PGPA Act (other than s.58). This creates a statutory ring-fence that can surprise departmental officers attempting to consolidate accounts. Separate accounting is mandatory, yet the Act does not prescribe the precise bookkeeping method, leaving room for audit qualification.

Finally, s.5(4) requires every agreement and every amending agreement to be tabled. In practice many program administrators treat template or funding-round agreements as outside this obligation; a strict reading suggests otherwise. Non-tabling does not invalidate the agreement but could expose the Minister to parliamentary censure.

Compliance begins at the agreement-negotiation stage. Ensure every mandatory matter listed in s.7 is expressly addressed. Draft conditions of payment to align with, but not contradict, the statutory conditions in ss.8–10; attempting to exclude the statutory overlay will be ineffective.

For State recipients, secure early engagement with the State Auditor-General or departmental accounting head so that the s.9(3) certificate process is built into project governance. Non-State recipients should budget for a qualified accountant’s certificate at each claim stage; obtain the accountant’s engagement letter early and ensure the form of certificate matches the statutory language (“in the responsible person’s opinion, the amount was spent in accordance with the agreement”).

Implement a document-retention protocol that satisfies s.9(6). All plans, designs, tenders, records and correspondence must be available for inspection at reasonable times; electronic systems should allow rapid production of extracts. Maintain a dedicated project file that can be handed to an authorised officer on request.

Cash-flow forecasting must allow for the condition-precedent nature of s.9(2). Do not assume payment will follow invoice; factor in the time required to compile the statement and obtain the certificate.

Where an agreement includes s.10 clauses, establish clear accounting separation between project-derived income and other income. If intellectual property is generated, document ownership trails so that assignment or revenue-sharing obligations can be met without dispute.

For trust or conditionally gifted moneys, keep them in separately identified ledger accounts from the moment of receipt. Any delegation under s.12A must be evidenced in writing and the delegate must be given the precise terms of the trust or condition; the delegate cannot be directed to act inconsistently with those terms.

Commonwealth administrators should maintain a central register of agreements to satisfy the tabling obligation within 15 sitting days. Authorised officers issuing repayment demands under s.8 should record the factual basis of their “satisfaction” to reduce judicial-review risk.

Annual reporting under s.26 requires aggregation of all agreements active during the financial year; compliance systems should therefore capture both quantitative expenditure data and qualitative information on project outcomes against the statutory objects in s.3.

Organisations that receive both legacy funding under the transitional provisions and new funding should maintain two parallel compliance streams until all legacy agreements expire, noting that new agreements can override legacy terms.

In short, treat the Act as a continuing accountability statute rather than a one-off grant instrument. Build the audit, reporting and repayment disciplines into the project’s internal controls from day one; the cost of doing so is modest compared with the risk of full repayment plus loss of future funding eligibility.