Overview

Reporting is a critical element of accountability. Section 32A reports stand alongside other annual reports (eg, departmental and Crown entity annual reports) in providing a comprehensive picture of performance to Parliament.

Section 32A reports specifically provide for statements of service performance (output expenses and some other expenses) and results (most other expenses and capital expenditure) for non-departmental appropriations, where the use of the expenditure is not reported on to Parliament thorough any other mechanism, and the expenditure meets the agreed criteria and thresholds for reporting. In these cases, the Minister responsible for the non-departmental appropriation is also responsible for the reporting to the House of Representatives (the House) on the use of the non-departmental appropriation.

The chief executive of the department that administers the non-departmental appropriation is likely to be given the tasks by the responsible Minister of managing and monitoring the contract with the provider of the services or results, and the task of preparing section 32A reports on what was achieved.

As the administering department is not accountable for the performance achieved from non-departmental appropriations[1], the section 32A performance report is not included in the department's annual report. However, the administering department’s annual report must include a statement of actual expenses or capital expenditure incurred against each appropriation, and a statement of unappropriated expenses and capital expenditure in respect of both departmental and non-departmental activities administered by the department.[2]

When a Section 32A report is required

Statutory requirement: Section 32A of the PFA:

Additional reports in relation to non-departmental appropriations

Statutory requirement: Section 32A(1) of the PFA:

1. This section applies, if in any financial year, an Appropriation Act—

(a) lists an appropriation or a class of outputs within an appropriation for which expenses or capital expenditure are to be incurred other than by departments or Offices of Parliament; and

(b) states that the appropriation or class of outputs is, on whole or part, subject to this section.

Statutory exemption: Section 32A(5) of the PFA:

5. Despite subsection (3) [which states what the report must include], the report does not need to include a statement of service performance in relation to a part of an appropriation or a class of outputs on which another entity is required to report in its statement of service performance if an Appropriation Act that lists the appropriation or class of outputs so provides.

In any financial year, a section 32A performance report is required for any non-departmental appropriation (or class of outputs within an appropriation) that is listed in a Schedule to the Appropriation Act[3] as being pursuant to section 32A of the PFA.

The Schedule for the Appropriation Act is produced annually, following advice from administering departments to the Treasury as to which non-departmental appropriations or class of outputs require a section 32A report. In determining the list for the Schedule, administering departments apply the criteria and thresholds agreed by the Finance and Expenditure Committee (FEC) for when a section 32A report is required (refer to section 1.2.1.1 of this guidance).

A section 32A report is not required if:

• the non-departmental appropriation (or class of outputs within an appropriation) is already covered by other reporting to Parliament (section 32A(5) of the PFA), or
• using the agreed criteria and thresholds, it is identified that a section 32A report is not required (refer section 1.2.1.1).

To illustrate the above points:

The performance cycle and section 32A reports

The performance cycle, as depicted inside the front cover to this guidance, is part of a continuous cycle that involves reviewing performance against stated intentions, and then feeding back into the next cycle of strategy setting, planning, implementation and review. Performance management and reporting is ultimately about improving results for New Zealanders, and a good way to measure progress is the extent to which the service performance or results achieved compare with the service performance or results that were forecast to be achieved.

To produce meaningful, clear and concise performance reporting, administering departments need to:

• identify which non-departmental appropriations and output classes will require a section 32A report (as per the PFA and the agreed criteria and thresholds) and provide this information to the Treasury each year for inclusion in a Schedule of the Appropriation (Estimates) Bill and, if necessary, in the Supplementary Appropriation (Estimates) Bill. The non-departmental appropriations and output classes that need to be considered are:'
  • each output class within a non-departmental output expense appropriation
  • each non-departmental other expense appropriation, and
  • each non-departmental capital expenditure appropriation.
• identify expected service performance or results (if possible with the provider and then using these to form part of the contract), and as part of the Estimates information upload to CFISnet[4], supply the related measures or results to the Treasury for publication in the Information Supporting the Estimates
• manage and monitor the contract related to the delivery of the expected service performance or results, and
• at the end of each financial year, prepare for the responsible Minister's approval the section 32A report, using the section 32A template available at http://purl.oclc.org/nzt/g-soice. The report needs to provide a comparison of expected service performance or results to actual service performance or results.