State sector agencies are increasingly working together to deliver results for New Zealanders. To support this focus the Treasury, together with agencies, has developed the Cross-agency Funding Framework to make funding cross-agency initiatives easier. The framework provides clarity on the range of funding models available, when they should be used and resets expectations about where it is reasonable to pursue particular funding arrangements.
The framework has three broad funding models:
- Cost recovery charges – where an agency buys a service from another agency that recovers costs through a service fee
- Pooled funding – a small group of agencies pool funds from their baselines to share the cost of an initiative to achieve a common goal
- Centrally determined funding – where Ministers determine that an activity is to be performed and funded on a cross-agency basis, and determine the funding sources.
The framework includes funding principles, decision tools and key questions to guide agencies through the process of identifying the most appropriate funding models for cross-agency initiatives.
Cabinet agreed the cross-agency funding framework in December 2014.
The Treasury can provide advice on the application of the framework and support agencies to work through specific funding issues. Agencies should contact their relevant vote analyst in the first instance.