Technical Guide: Writing Financial Recommendations for Cabinet and Joint Minister Papers

Updated 1 Feb 07

This Technical Guide is intended to help users prepare papers containing financial recommendations. The formats used are designed to meet Cabinet Office requirements for recommendations being considered by Cabinet (refer to the Step-by-Step Guide at http://www.dpmc.govt.nz/cabinet/guide/index.html) and by Ministers to ensure that information presented to them follows a consistent style and format.

Agencies should download and use the Word version to copy and paste sections of the Technical Guide.

The Technical Guide was updated in January 2006 to expand the scope to cover other common transactions and to reflect amendments to the Public Finance Act (PFA) and further updated in February 2007 with a new form of recommendation governing supplementary estimates and imprest supply.

Guidance for Standard Cabinet Papers

The correct drafting of financial recommendations is essential to record accurately Cabinet's financial decisions. Such decisions provide Cabinet's authority for changes in appropriations, expenditure, and the use of Imprest Supply.

There are two recommendations that are commonly used in papers submitted to Cabinet for new funding.

The first recommendation is for when only new Crown operating or capital funding is sought - see Example 1 (page 13) of the Technical Guide (Word version - 836 KB).
The second recommendation is where there is a mix of Crown and Other funding e.g. from a levy or fee - see Example 3 (page 17) of the Technical Guide (Word version - 836 KB).

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Contents Introduction Purpose of this Technical Guide Why have Financial Recommendations? How to Use this Guide Financial recommendations module in CFISnet Essential Elements for Financial Recommendations How to Write Financial Recommendations Eight Steps in Writing Financial Recommendations Impact on the Operating Balance and/or Debt Numbering of Recommendations Four Common Scenarios Supplementary Estimates and Imprest Supply Recommendation Forecasting Changes Recognition of Crown Liabilities (eg, Legal Liabilities) Baseline reductions Technical Accounting Adjustments Annex A: Anatomy of Financial Recommendations Anatomy of a Text Recommendation and Appropriation Table Anatomy of a Summary Table (for Use with Multiple Initiatives) Anatomy of an Impact Table (for Use where Changes Partially Impact) Annex B: Examples of Typical Financial Recommendations Example 1 – Combined Approval and Impact Statement for a Single Baseline Change Example 2 – Combined Approval and Impact Statement for Multiple Baseline Changes all Impacting on Operating Balance and/or Debt Example 3 – Separate Impact Table where a Single Baseline Change Partially Impacts on the Operating Balance and/or Debt Example 4 – Separate Impact and Summary Tables where Multiple Baseline Changes Partially Impact on the Operating Balance and/or Debt Example 5 - Expense and/or Capital Transfers (ECTs) Example 6 - In Principle Expense and/or Capital Transfers (ECTs) Example 7 - Fiscally Neutral Adjustments (FNAs) Example 8 - Fiscally Neutral Adjustments (FNAs) Between Votes Example 9 - Changes in Funding Source Example 10 - Changes to Crown Revenue Example 11 – Inter-departmental Purchasing of Outputs Example 12 – Specifying Baselines beyond the Forecast Period Annex C: Examples of Financial Recommendations for Multi-year Appropriations (MYA) General conditions Example 13 - Establishing a new MYA Example 14 – Converting an existing annual appropriation into a MYA Annex D: Multi-class Output Expense Appropriations (MCOA) Example 15 - Establishing a new MCOA Example 16 - Fiscally Neutral Transfer to/from MCOA Example 17 - Add an output class to an existing MCOA Annex E: Financial Recommendations relating to Permanent Legislative Authorities (PLA) Example 18 – Changes in Appropriation where Permanent Legislative Authority exists Annex F: Financial Recommendations relating to Capital Contributions Example 19 - Capital Injections to Departments Example 20 - Capital Injections with Associated Operating Implications Example 21 – Non-departmental Capital Expenditure Annex G: Departmental Other Expenses Disclosure of Other Expenses General Principle Background Types of Other Expenses Loss on Disposal of Assets Asset Devaluations Restructuring Expenses Extraordinary Items Netting of Gains and Losses on Disposal Funding of Other Expense	finrecs-07.pdf(216 KB) pp. (2),iii,44 finrecs-07.pdf(836 KB) pp. (2),iii,44

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Introduction

Purpose of this Technical Guide
Why have Financial Recommendations?
How to Use this Guide
Financial recommendations module in CFISnet

Essential Elements for Financial Recommendations

How to Write Financial Recommendations

Eight Steps in Writing Financial Recommendations
Impact on the Operating Balance and/or Debt
Numbering of Recommendations
Four Common Scenarios
Supplementary Estimates and Imprest Supply Recommendation
Forecasting Changes
Recognition of Crown Liabilities (eg, Legal Liabilities)
Baseline reductions
Technical Accounting Adjustments

Annex A: Anatomy of Financial Recommendations

Anatomy of a Text Recommendation and Appropriation Table
Anatomy of a Summary Table (for Use with Multiple Initiatives)
Anatomy of an Impact Table (for Use where Changes Partially Impact)

Annex B: Examples of Typical Financial Recommendations

Example 1 – Combined Approval and Impact Statement for a Single Baseline Change
Example 2 – Combined Approval and Impact Statement for Multiple Baseline
Changes all Impacting on Operating Balance and/or Debt
Example 3 – Separate Impact Table where a Single Baseline Change Partially
Impacts on the Operating Balance and/or Debt
Example 4 – Separate Impact and Summary Tables where Multiple Baseline
Changes Partially Impact on the Operating Balance and/or Debt
Example 5 - Expense and/or Capital Transfers (ECTs)
Example 6 - In Principle Expense and/or Capital Transfers (ECTs)
Example 7 - Fiscally Neutral Adjustments (FNAs)
Example 8 - Fiscally Neutral Adjustments (FNAs) Between Votes
Example 9 - Changes in Funding Source
Example 10 - Changes to Crown Revenue
Example 11 – Inter-departmental Purchasing of Outputs
Example 12 – Specifying Baselines beyond the Forecast Period

Annex C: Examples of Financial Recommendations for Multi-year Appropriations
(MYA)

General conditions
Example 13 - Establishing a new MYA
Example 14 – Converting an existing annual appropriation into a MYA
Annex D: Multi-class Output Expense Appropriations (MCOA)
Example 15 - Establishing a new MCOA
Example 16 - Fiscally Neutral Transfer to/from MCOA
Example 17 - Add an output class to an existing MCOA

Annex E: Financial Recommendations relating to Permanent Legislative Authorities
(PLA)

Example 18 – Changes in Appropriation where Permanent Legislative Authority
exists

Annex F: Financial Recommendations relating to Capital Contributions

Example 19 - Capital Injections to Departments
Example 20 - Capital Injections with Associated Operating Implications
Example 21 – Non-departmental Capital Expenditure

Annex G: Departmental Other Expenses

Disclosure of Other Expenses
General Principle
Background
Types of Other Expenses
Loss on Disposal of Assets
Asset Devaluations
Restructuring Expenses
Extraordinary Items
Netting of Gains and Losses on Disposal
Funding of Other Expense

finrecs-07.pdf(216 KB) pp. (2),iii,44
finrecs-07.pdf(836 KB) pp. (2),iii,44

Web Guidelines

This Technical Guide is a special purpose document in terms of section 6.4.2 of the Government Web Guidelines (E-Government web site) as it contains a number of complex tables for use as templates in Word documents. These tables cannot be reproduced in HTML and still serve their intended purpose.

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