E: Administering appropriations

In 2013, the Public Finance Act was amended to make it clear that departmental chief executives were responsible for advising on the efficiency and effectiveness of non-department spending including that appropriated for use by Crown entities. The Crown Entities Act was also amended to include explicitly the monitoring department's role of administering any appropriations, where relevant. 8

Departments have a number of important financial management roles, including supporting the budget process, meeting the department's Vote administration roles, and providing advice on the efficiency and effectiveness of spending.

Departments should support government budget processes by:

  • distributing budget round information (timetables, templates, etc.) to entities
  • working with entities to align entity planning and budget processes
  • developing the Four-year Plan (covering both departmental and non-departmental expenditure) for the Vote(s) the department administers working with entities to understand, improve and critically assess proposals
  • ranking initiatives against other initiatives for the sector, and
  • ensuring all approved initiatives are reflected in accountability documents (e.g. SOI, SPE ), 9 after budget decisions are released to Crown entities.

Departments also have Vote administration roles for the financial management and financial requirements for non-departmental expenditure. These include:

  • providing budget and budget update coordination and quality assurance
  • preparing the estimates and other information that support the budget
  • reporting on expenses and capital expenditure against appropriations, and
  • advising the Minister on financial and non-financial performance.

For more on Vote administration see: www.treasury.govt.nz/publications/guidance/planning/appropriations/guide/02.htm .

Monitoring departments should engage with entities as a 'friendly critic' (at times acting as an advisor or sector leader). Under the Public Finance Act (s. 34(2)(b) and s. 35(b)) departmental chief executives are responsible for advising the appropriation Minister on the efficiency and effectiveness of expenditure from appropriations administered by the department.

Ministers should be presented with all requests for increases in compulsory levies, fees and charges well ahead of the proposed implementation date. As for budget bids, departments should work with entities to improve requests for levy increases, but also assess them critically. The Minister should be advised on whether costs can be absorbed, why the levy represents value to levy payers, how consultation with those affected by the change will be managed, and any risks arising from the increase.


8: As noted previously, in some cases monitoring is undertaken by a different department from the department that has policy and Vote administration responsibilities.

9: CEA s. 170 (which takes effect on 1 July 2014) provides "A responsible Minister may set standards, terms, and conditions in respect of any reportable class of outputs that a Crown entity proposes to supply". This will replace the previous formulation of s. 170 which allowed responsible Ministers to require entities to have an output agreement.

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