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

Updated 11 Jun 10

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 June 2010 to reflect changes in Cabinet Office Circular CO(09)6, include a number of additional worked examples (including one relating to capital/operating swaps), and to improve general clarity.

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 16) of the Technical Guide (Word version - 654 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 20) of the Technical Guide (Word version - 654 KB).

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Contents 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 Nine Steps in Writing Financial Recommendations Impact on the Operating Balance and/or Debt Numbering of Recommendations Four Common Scenarios Supplementary Estimates and Imprest Supply 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 (IPECTs) Example 7 – Fiscally Neutral Adjustments (FNAs) Within a Vote Example 8 – Fiscally Neutral Adjustments (FNAs) Between Votes Example 9 – Capital to Operating and Operating to Capital Swaps Example 10 – Changes in Funding Source Example 11 – Changes to Crown Revenue or Capital Receipts Example 12 – Specifying Baselines beyond the Forecast Period Annex C: Financial Recommendations for Multi-year Appropriations (MYAs) Example 13 – Establishing a New MYA Example 14 – Converting an Existing Annual Appropriation into an MYA Annex D: Financial Recommendations for Multi-class Output Expense Appropriations (MCOAs) Example 15 – Establishing a New MCOA Example 16 – Fiscally Neutral Transfer to or from an MCOA Example 17 – Adding an Output Class to an Existing MCOA Annex E: Financial Recommendations for Permanent Legislative Authorities (PLAs) Example 18 – Changes in Appropriation where Permanent Legislative Authority Exists Example 19 – Inter-departmental Purchase of Outputs Annex F: Financial Recommendations for Capital Example 20 – Capital Injections to Departments Example 21 – Capital Injections to Departments with Associated Operating Implications Example 22 – Non-departmental Capital Expenditure Annex G: Financial Recommendations for Retention of Departmental Surplus Example 23 – Requests for Retention of Surplus Annex H: Departmental Other Expenses	finrecs-jun10.pdf(296 KB) pp. (2),52 finrecs-jun10.doc(654 KB) pp. (2),52

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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

Nine Steps in Writing Financial Recommendations
Impact on the Operating Balance and/or Debt
Numbering of Recommendations
Four Common Scenarios
Supplementary Estimates and Imprest Supply
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 (IPECTs)
Example 7 – Fiscally Neutral Adjustments (FNAs) Within a Vote
Example 8 – Fiscally Neutral Adjustments (FNAs) Between Votes
Example 9 – Capital to Operating and Operating to Capital Swaps
Example 10 – Changes in Funding Source
Example 11 – Changes to Crown Revenue or Capital Receipts
Example 12 – Specifying Baselines beyond the Forecast Period
Annex C: Financial Recommendations for Multi-year Appropriations (MYAs)
Example 13 – Establishing a New MYA
Example 14 – Converting an Existing Annual Appropriation into an MYA
Annex D: Financial Recommendations for Multi-class Output Expense Appropriations (MCOAs)
Example 15 – Establishing a New MCOA
Example 16 – Fiscally Neutral Transfer to or from an MCOA
Example 17 – Adding an Output Class to an Existing MCOA

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

Example 18 – Changes in Appropriation where Permanent Legislative Authority Exists
Example 19 – Inter-departmental Purchase of Outputs

Annex F: Financial Recommendations for Capital

Example 20 – Capital Injections to Departments
Example 21 – Capital Injections to Departments with Associated Operating Implications
Example 22 – Non-departmental Capital Expenditure

Annex G: Financial Recommendations for Retention of Departmental Surplus

Example 23 – Requests for Retention of Surplus

Annex H: Departmental Other Expenses

finrecs-jun10.pdf(296 KB) pp. (2),52
finrecs-jun10.doc(654 KB) pp. (2),52

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