Putting It Together: An Explanatory Guide to New Zealand's State Sector Financial Management System

Published 15 Sep 2011
Page updated 29 Jul 2012

Note: Due to the 2013 amendments to the Public Finance Act 1989 , the State Sector Act 1988 and the Crown Entities Act 2004 this document is under review.

This publication provides an overview of New Zealand's State sector financial management. The system includes the role and information needs of Parliament in approving and scrutinising government expenditure, the tools available to Ministers to focus public resources on the government's priorities and to set expectations of departments and other government agencies, and the role of departments in ensuring taxpayer's money is used appropriately (whether by the department in providing services itself or by the Crown entities and other organisations funded through departments).

This document summarises how the system is intended to operate and updates the original version, which was published in 1996. The updated Putting It Together may be a useful reference for:

staff in Parliament, departments, Crown entities, and state-owned enterprises
professionals and students
interested members of the public
people from overseas who are interested in New Zealand's state sector financial management system and how it works.

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Purpose What's New? Questions and Feedback Further Information Introduction by the Secretary to the Treasury 1 Introducing State Sector Financial Management The Purpose of State Sector Financial Management Constitutional Structure of the State Sector Agencies Maintaining the Financial Management System Legislative Structure for the Financial Management System Standing Orders of the House of Representatives Conclusion 2 Explaining Key Concepts Introduction State Sector Accountability Framework Accrual and Cash Accounting Generally Accepted Accounting Practice (GAAP) Appropriations Inputs, Outputs, Outcomes and Impact Purchase and Ownership Interests Responsible Ministers The Crown and Departments The Crown and Other State Sector Organisations Decision-making and Accountability Working Across Agencies and Sectors Conclusion 3 Planning and Budgeting Introduction 4 Authority from Parliament Introduction Appropriation Acts Types of Appropriation Periods of Appropriation The Estimates Information Supporting the Estimates Examples of Appropriations from the Main Estimates Specifying the Performance Expected in Return for Funding Conclusion 5 Efficient, Effective Management Introduction Priorities Drive Performance Expectations and Spending Chief Executive Performance Expectations Expectations of Fiscal Prudence and Value-for-Money Agencies and Assets are Managed Strategically Conclusion 6 Managing Money Introduction Management of cash and other financial instruments Cash Disbursements Trust Money Conclusion 7 The Wider Crown Estate Introduction State-Owned Enterprises (SOEs) Crown Entities Health Sector Crown Entities Education Sector Crown Entities Tertiary Education Sector Organisations Named or Described in Schedule 4 of the Public Finance Act 1989 Conclusion 8 Reporting on Expected and Actual Performance Introduction Statement of Intent (SOI) In-year Reporting Annual Reporting Relationship between the Types of Appropriation in the Estimates and the Information Supporting the Estimates, Statements of Intent, and Annual Reports Financial Statements of the Government Conclusion 9 Parliamentary Review Introduction Select Committee Review Unappropriated Expenses and Capital Expenditure Imprest Supply Controller Function The Financial Veto Conclusion 10 Putting It Together Appendix A: The Public Finance Act 1989 Appendix B: Reporting on Fiscal Responsibility Appendix C: Relationship between the Types of Appropriation in the Estimates and the Information Supporting the Estimates, Statements of Intent, and Annual Reports Appendix D: Further Reading Early Documents on New Zealand's State Sector Reforms Appendix E: Abbreviations Index	pit-2011.pdf (751 KB) pp. 1–100

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