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

December 2012 Update published 8 Jan 2013
Page updated 1 Feb 2013

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, as this will enable them to copy and paste sections of the Technical Guide where relevant.

The Technical Guide was updated in December 2012 to reflect changes in Cabinet Office Circular CO(11)6 which has superseded CO(09)6 (including two new flexible funding mechanisms for departments - retention of underspends and front-loading of spending). Also new rules relating to capital charge and amended rules relating to Multi-class Output Expense appropriations.

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 and departmental net assets, 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 where new Crown operating or capital funding is sought - see Example 1 (page 20) of the Technical Guide (Word version - 844 KB).
The second recommendation is where there is a mix of Crown and Other funding eg, from a levy or fee - see Example 3 (page 27) of the Technical Guide (Word version - 844 KB).

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What's New? Introduction About this 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 Supplementary Estimates and Imprest Supply Impact on Contingencies Numbering of Recommendations Four Common Scenarios 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 within an appropriation across financial years (ECTs) Example 6 – In-Principle Expense and/or Capital Transfers within an appropriation across financial years (IPECTs) Example 7 – Retention of Underspends (RoUs), where approval is sough prior to or at March Baseline Update Example 8 – Retention of Underspends (RoUs), where approval is sought after March Baseline Update Example 9 – Front-loading of Spending (FLoS) Example 10 – Fiscally Neutral Adjustments (FNAs) Within a Vote Example 11 – Fiscally Neutral Adjustments (FNAs) Between Votes Example 12 – Changes in Funding Source Example 13 – Changes to Crown Revenue or Capital Receipts Example 14 – Specifying Baselines beyond the Forecast Period Annex C: Financial Recommendations for Multi-year Appropriations (MYAs) Example 15 – Establishing a New MYA Example 16 – Converting an Existing Annual Appropriation into an MYA Annex D: Financial Recommendations for Multi-class Output Expense Appropriations (MCOAs) Example 17 – Establishing a New MCOA Example 18 – Fiscally Neutral Transfer to or from an MCOA Example 19 – Adding an Output Class to an Existing MCOA Annex E: Financial Recommendations for Permanent Legislative Authorities (PLAs) Example 20 – Changes in Appropriation where Permanent Legislative Authority Exists Example 21 – Inter-departmental Purchase of Outputs Annex F: Financial Recommendations for Capital Example 22 – Capital Injections to Departments Example 23 – Capital Injections to Departments with Associated Operating Implications Example 24 – Non-departmental Capital Expenditure Annex G: Capital and Operating Swaps and Voluntary Capital Withdrawals Example 25 – Operating to Capital Swaps within a Single Financial Year Example 26 – Capital to Operating Swaps within a Single Financial Year Example 27 – Operating to Capital Swaps where Reductions in Operating Expenses are Ongoing Example 28 – Capital to Operating Swaps where Increases in Operating Expenses are Ongoing Example 29 – Voluntary Capital Withdrawals Annex H: Financial Recommendations for Retention of Departmental Operating Surplus Example 30 – Requests for Retention of Surplus Annex I: Departmental Other Expenses	finrecs-dec12-v3.pdf (625 KB) pp. 74 finrecs-dec12-v3.doc (848 KB) pp. 74

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What's New?

Introduction

About this 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
Supplementary Estimates and Imprest Supply
Impact on Contingencies
Numbering of Recommendations
Four Common Scenarios
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 within an appropriation across financial years (ECTs)
Example 6 – In-Principle Expense and/or Capital Transfers within an appropriation across financial years (IPECTs)
Example 7 – Retention of Underspends (RoUs), where approval is sough prior to or at March Baseline Update
Example 8 – Retention of Underspends (RoUs), where approval is sought after March Baseline Update
Example 9 – Front-loading of Spending (FLoS)
Example 10 – Fiscally Neutral Adjustments (FNAs) Within a Vote
Example 11 – Fiscally Neutral Adjustments (FNAs) Between Votes
Example 12 – Changes in Funding Source
Example 13 – Changes to Crown Revenue or Capital Receipts
Example 14 – Specifying Baselines beyond the Forecast Period

Annex C: Financial Recommendations for Multi-year Appropriations (MYAs)

Example 15 – Establishing a New MYA
Example 16 – Converting an Existing Annual Appropriation into an MYA

Annex D: Financial Recommendations for Multi-class Output Expense Appropriations (MCOAs)

Example 17 – Establishing a New MCOA
Example 18 – Fiscally Neutral Transfer to or from an MCOA
Example 19 – Adding an Output Class to an Existing MCOA

Annex E: Financial Recommendations for Permanent Legislative Authorities (PLAs)

Example 20 – Changes in Appropriation where Permanent Legislative Authority Exists
Example 21 – Inter-departmental Purchase of Outputs

Annex F: Financial Recommendations for Capital

Example 22 – Capital Injections to Departments
Example 23 – Capital Injections to Departments with Associated Operating Implications
Example 24 – Non-departmental Capital Expenditure

Annex G: Capital and Operating Swaps and Voluntary Capital Withdrawals

Example 25 – Operating to Capital Swaps within a Single Financial Year
Example 26 – Capital to Operating Swaps within a Single Financial Year
Example 27 – Operating to Capital Swaps where Reductions in Operating Expenses are Ongoing
Example 28 – Capital to Operating Swaps where Increases in Operating Expenses are Ongoing
Example 29 – Voluntary Capital Withdrawals

Annex H: Financial Recommendations for Retention of Departmental Operating Surplus

Example 30 – Requests for Retention of Surplus

Annex I: Departmental Other Expenses

finrecs-dec12-v3.pdf (625 KB) pp. 74
finrecs-dec12-v3.doc (848 KB) pp. 74

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