1   Introduction to Treasury Instructions

1.1  General

This document comprises:

1. a summary of the of the relevant provisions of the Public Finance Act 1989 as amended in 2004 (the Act);
2. a set of instructions in bold to be known as Treasury Instructions (the Treasury Instructions) and;
3. some guidance on the Instructions and the provisions of the Act .

The Treasury Instructions are issued under the authority of section 80 of the Act and are to be read in conjunction with the Act (all terms have the same meaning as in section 2 of the Act).

1.2  Date of issue

The Treasury Instructions contained herein were issued on 30 June 2009 (and amended on 9 September 2009), and apply as from 30 June 2009. All previous Treasury Instructions applying to departments as defined in the Public Finance Act 1989 are hereby revoked.

1.3  Structure of Treasury Instructions 

This document comprises six sections:

Section one : Introduction to the Treasury Instructions.

Section two: Principles for the development of accounting policies for external financial reporting. This section of the Treasury Instructions is to be complied with by the Government and departments when developing accounting policies for external financial reporting.

Section three: Accounting policies for external financial reporting by the Government of New Zealand. This section of the Treasury Instructions is to be complied with when providing reports on Crown revenue, expenditure, assets or liabilities, and when providing information for the preparation of the Financial Statements of the Government of New Zealand and Forecasts.

Section four: Accounting policy parameters for external financial reporting by departments. Departments must select their accounting policies within the parameters specified in this section of the Treasury Instructions.

Section five: Cost accounting policy parameters. Departments are required to provide a clear and concise statement of cost accounting policies in external financial reports, and this section of the Treasury Instructions provides criteria for disclosing cost accounting policies.

Section six: Operating instructions. This section of the Treasury Instructions is to be complied with when determining and operating departmental accounting and management systems.

A number of publications have been developed to assist departmental Chief Executives with the development and maintenance of appropriate accounting policies and systems. Departments can obtain these publications through the Treasury web site www.treasury.govt.nz.

1.4  Application of Treasury Instructions

The Treasury Instructions apply, subject to the provisions of the Act and of any regulations made under this Act, to all Chief Executives and all employees of any department as defined in the Public Finance Act 1989 as amended in 2004 (the Act). It is the responsibility of every Chief Executive to ensure that the Instructions are complied with.

1.5  Access to Treasury Instructions

The current and only official version of the Treasury Instructions is on Treasury's web site (www.treasury.govt.nz).

Chief Executives are to ensure that all employees have sufficient access to the Public Finance Act 1989 (the Act) and to the current Treasury Instructions issued under that Act.

1.6  Review of Treasury Instructions

The Treasury Instructions are reviewed and updated annually. They are effective from 1 July of the year in which they are published. Each new version of the Treasury Instructions issued in this manner supersedes all previous versions of the Treasury Instructions.

1.7 Relationship between Treasury Instructions and Treasury Circulars

Treasury Instructions are issued under Section 80(1) of the Act. Treasury may issue instructions to departments for the purpose of

• requiring information to be supplied to Treasury to enable the Treasury to fulfil properly the functions imposed upon it by the Government or any Act;
• prescribing the processes and data standards to be used when supplying the information required;
• prescribing particular accounting policies and financial statement representations that Ministers, departments, Offices of Parliament, Crown entities or organisations named or described in Schedule 4 to the Act must apply in their financial reporting;
• prescribing the terms and conditions that must apply to the guarantees or indemnities referred to under section 81(1)(bb);
• prescribing any other matters relating to the guarantees or indemnities referred to under section 81(1)(bb);
• regulating the collection, receipt, custody, issue, expenditure, control and management of public money or trust money;
• regulating the accounting and financial management and control procedures relating to contracts of the Crown; and
• regulating the custody and control by the Crown of public securities and securities representing the investment of public money.

Treasury Instructions generally specify what the Chief Executives of the departments of the Crown must do. Treasury Instructions are signed on behalf of the Secretary to the Treasury and all Chief Executives and all employees of any department as defined in the Act are required to comply with Treasury Instructions.

The main purpose of Treasury Circulars is to provide guidance and information, and to request financial information. Treasury Circulars may cover matters that are outside the scope of Treasury Instructions, such as the budget timetable. Since Treasury Instructions are updated annually, Treasury Circulars may also cover matters that are to take effect immediately (but may later be incorporated within Treasury Instructions as part of an annual update).

Treasury Circulars are intended principally for departmental (and sometimes Crown Entities and State-owned enterprises) use and they are usually addressed to Chief Executives/Chief Financial Officers (CEs/CFOs).

A list of current, publicly-available Treasury Circulars.