Education and Science Sector

Information Supporting the Estimates is organised on the basis of sectors, with each Vote and its administering department allocated to one sector (with a small number of exceptions). The Information Supporting the Estimates comprises of sector overview information, together with statements of responsibility; performance information for appropriations in Votes covered by the sector; and statements of forecast service performance and forecast financial statements of departments included in the sector. Statements of Intent of departments included in the sector form part of the supporting information.

Cover, Contents#

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Introduction#

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• Purpose of Information Supporting the Estimates
• Votes and Departments in Each Sector
• Purpose and Nature of Appropriations
• Guide to Reading Information Supporting theEstimates
• Terms and Definitions
• Useful Links

Sector Overview#

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• Ministerial Statements of Responsibility
• Chief Executive Statements of Responsibility

Performance Information for Appropriations in Each Vote#

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• Vote Crown Research Institutes
• Vote Education Review Office
• Vote Education
• Vote Research, Science and Technology

Statements of Forecast Service Performance of Departments#

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Forecast Financial Statements of Departments#

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• Statement of Common Accounting Policies

• Ministry of Education
• Education Review Office
• Ministry of Research, Science and Technology

Statements of Intent of Departments (separately produced but forming part of this volume)#

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• Ministry of Education
• Education Review Office
• Ministry of Research, Science and Technology

Part 2.2 - Non-Departmental Output Expenses#

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Intended Impacts, Outcomes and Objectives

Biological Industries Research (M56)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The Biological Industries Research is a new output expense that has been created as a result of transfers from Environmental Research, the New Economy Research Fund, Research for Industry, the Pre-Seed Accelerator Fund and from Technology New Zealand. The appropriation focus will be on the activities:

• Improve productivity, sustainability and competitiveness of New Zealand's agriculture, horticulture, forestry and fisheries industries.
• Develop new technologies for economic diversification based on the strengths of New Zealand's primary industries and increased export revenue from food and biological based products.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Energy and Minerals Research (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The Energy and Minerals Research is a new output expense that has been created as a result of transfers from Research for Industry and Sustainable Energy Research. The appropriation will focus on the following activities:

• Develop potential new sustainable low carbon energy technologies.
• Improve energy management and the understanding of current energy resources, and future energy needs.
• Increase wealth from mineral resources.
• Improve the identification and extraction of mineral resources.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Engaging New Zealanders with Science and Technology (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The Engaging New Zealanders output expense has had increased funding as a result from a transfer from Supporting Promising Individuals. Activities within this appropriation are:

• Services provided by other parties to support activities that engage New Zealanders about the role of research.
• Science and technology in supporting innovation in the economy and society.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Environmental Research (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The Environmental Research output expense has had funding reduced from 2009/10 to 2010/11 as a result of transfers out to Biological Industries Research, Hazards and Infrastructure Research, Health and Society Research and to Science Collections and Infrastructure. The appropriation will focus on the following activities:

• Soil and water resources are used in sustainable manner and are preserved for future generations.
• Protect natural indigenous land and freshwater ecosystems.
• Protect the marine ecosystem.
• Improve our ability to predict, mitigate and adapt to impacts of climate change.
• Improve understanding of global processes such as plate tectonics as a basis for anticipating and managing future impacts.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Fellowships for Excellence (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The Fellowships for Excellence is a new output expense which has been created as a result of transfers from Rutherford Foundation and Supporting Promising Individuals. The appropriation will focus on the following activities:

• Early-career researcher grants to support post graduate research.
• Fellowship and scholarships are awarded to top talent and to build capability in the research, science and technology workforce.
• Scholarships are awarded for United States of America based post graduate research.
• Supporting the development of human resources in research, science and technology.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Global Technology Partnership (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

There is no change in this appropriation from 2009/10 to 2010/11.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Hazards and Infrastructure Research (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The Hazards and Infrastructure Research is a new output expense that has been created as a result of transfers from Environmental Research and from Research for Industry. The appropriation will focus on the following activities:

• Get an effective understanding and management of risks and hazards with the potential to have a significant economic, social and environmental impacts to New Zealand.
• Improve the quality of New Zealand's urban, peri-urban and rural settlements.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Health and Society Research (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The Health and Society Research is a new output expense that has been created as a result of transfers from Environmental Research, Health Research, Research for Industry, Social Research, Support for Primary Health Research and from Supporting Promising Individuals. The appropriation will focus on the following activities:

• Improve the health status of New Zealanders.
• Target health research and the Partnership Programme response to specific health sector issues.
• Improve health services.
• Support research in social, economic, and primary health.

Funds were transferred to to go towards the Longitudinal Study of NZ Youth, the Productivity Commission, and savings were identified in the Budget Economic Fiscal Update.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

High Value Manufacturing and Services Research (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The High Value Manufacturing and Services Research is a new output expense that has been created as a result of transfers from the New Economy Research Fund, Research for Industry, the Pre-Seed Accelerator Fund and from Technology New Zealand. The appropriation will focus on the following activities:

• Develop new technologies, novel materials, and new products, processes and services for the manufacturing and technology sectors.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Marsden Fund (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The Marsden Fund output expense has been reduced following a transfer to Research Contract Management.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

National Measurement Standards (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

There is no change in appropriation between 2009/10 and 2010/11.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Research and Development Facilitation and Promotion Service (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The appropriation funds increased by $800,000 from 2009/10 to 2010/11. Savings were identified in the Budget Economic Fiscal Update in 2010 these were deducted from the 2009/10 financial year and redistributed, in 2010/11 the funding returns back to the original baseline of $5 million.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Research Contract Management (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The appropriation has decreased from 2009/10 to 2010/11 due to International Polar Year Contestable research fund stopping of $150,000 per annum stopping in 2009/10.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Vision Matauranga Capability Fund (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The Vision Matauranga Capability Fund is a new output expense that has been created as a result of transfers from the Maori Knowledge and Development Fund and Supporting Promising Individuals. The appropriation will focus on:

• Supporting development of researchers to undertake work that relates to the four themes of Vision Matauranga; indigenous innovation, environmental sustainability, health and social well being, and exploring indigenous knowledge.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Summary of Service Providers for Non-Departmental Outputs#

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The above table summarises funding to be allocated through Vote Research, Science and Technology to non-departmental providers, along with an indication of the mechanism to be used for reporting actual performance and (where determined) the length of the funding commitment.

Part 5 - Details and Expected Results for Other Expenses#

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Part 5.2 - Non-Departmental Other Expenses

Intended Impacts, Outcomes and Objectives

Advanced Network Capability Building (M56)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This appropriation will decrease from $2.340 million in 2009/10 to $200,000 in 2010/11. The reason for the change between the 2009/10 year and the 2010/11 year is a planned reduction in the level of annual funding.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Australian Synchrotron (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This appropriation will increase from $694,000 in 2009/10 to $785,000 in 2010/11. The reason for the change is a planned increase in the level of annual funding to support existing infrastructure and foreign exchange cost pressures.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Carter Observatory Grant (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

There is no change in appropriation from 2009/10 to 2010/11.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Convention Du Metre (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This appropriation will increase by $23,000 from $112,000 in 2009/10 to 2010/11 to $135,000. The appropriation takes into account the impact of foreign exchange and movement in the annual subscription.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

CRI Capability Fund (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

There is no change in appropriation from 2009/10 to 2010/11.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Genomics Research Infrastructure (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This appropriation will decrease from $12 million in 2009/10 to $4.200 million in 2010/11. The reason for the change is a planned reduction in the level of annual funding.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

International Relationships (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The International Relationships is a new non-departmental other expense that has been created as a result of transfers from International Science and Technology Linkages, the New Economy Research Fund, and from the International Investment Opportunities Fund. The appropriation will focus its activities:

• Influencing regional or international research.
• Science and technology-linked activities that advance New Zealand's national interests.
• Promoting international recognition for New Zealand as a centre for innovation.
• Co-invest with international partners in research programmes of joint interest that will involve researchers based in New Zealand.
• Increase the level of funding/scientific skills/ and technological capabilities that New Zealand is able to source from other countries.
• Enable New Zealand researchers to respond to opportunities for international collaboration that arise out-of-cycle.
• Assist world-leading researchers to establish research programmes in New Zealand in key areas of strategic interest to New Zealand.

Savings were identified in the Budget Economic Fiscal Update and funding was reduced in 2010/11.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Royal Society of New Zealand (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

There is no change in appropriation from 2009/10 to 2010/11.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Science Collections and Infrastructure (M56)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Vote RST was restructured to provide simplicity and transparency with a focus on economic drivers and research investment to achieve science priorities. The Science Collections and Infrastructure is a new non-departmental other expense that has been created as a result of transfers from Environmental Research and Research for Industry. The appropriation will focus on the following activities:

• The national seed, plant, and other science collections research databases.
• Significant infrastructure being held in stasis that is to be retained and maintained.
• Management of the availability and suitability for access and use when required.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Reporting Mechanisms#

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The above table indicates the mechanisms to be used for reporting actual performance for each non-departmental other expenses appropriation.

Part 6 - Details and Expected Results for Capital Expenditure#

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Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

Ministry of Research, Science and Technology - Capital Expenditure PLA (M56)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

Capital expenditure in MoRST is primarily investment in information systems that support business processes and information retention within the Ministry. The ongoing investment cycle in those systems does fluctuate across years and movements in 2010/11 reflect the programme change in the cycle.

Expected Results

Part 6.2 - Non-Departmental Capital Expenditure#

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Intended Impacts, Outcomes and Objectives

Research and Education Advanced Network New Zealand (M56)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The funding will maintain the operation of the KAREN network until 30 June 2013, with the expectation that REANNZ is fully funded by user revenue from 2013/14.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Reporting Mechanisms#

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The above table indicates the mechanisms to be used for reporting actual results for each non-departmental capital expenditure appropriation.

Statements of Forecast Service Performance#

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The Statements of Forecast Service Performance of departments included in the Education and Science Sector comprise the service performance information for all departmental output expense appropriations that are proposed to be used by those departments. In this context, service performance information comprises the scope, expenses and revenue, and output performance measures and standards for each class of outputs within those departmental appropriations, as set out in Part 2.1 of the Performance Information for appropriations in each Vote.

The following table identifies the classes of outputs incorporated in the Statement of Forecast Service Performance for each department in the Education and Science Sector.

Statement of Common Accounting Policies#

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These accounting policies have been applied in the forecast financial statements of all departments and Offices of Parliament except as outlined in the statement of entity-specific accounting policies for individual departments or Offices of Parliament.

These forecast financial statements are prepared in accordance with section 41(1)(a)-(f) of the Public Finance Act 1989. The purpose of the forecast financial statements is to facilitate Parliament's consideration of appropriations for, and planned performance of, departments and offices of Parliament. Use of this information for other purposes may not be appropriate. It is not intended that these forecast financial statements be updated subsequent to publication.

Statement of Compliance

These forecast financial statements for the year ended 30 June 2010 comply with FRS-42 Prospective Financial Statements.

Specific Accounting Policies#

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The accounting policies set out below have been applied consistently to all periods presented in these statements. These statements have been prepared on a going-concern basis. The measurement base applied is historical cost modified by the revaluation of certain assets and liabilities as identified in this statement of accounting policies.

The accrual basis of accounting has been used unless otherwise stated. These financial statements are presented in New Zealand dollars, which is the entity's functional currency. All financial information presented has been rounded to the nearest thousand.

Judgements and Estimations

The preparation of forecast financial statements in conformity with FRS-42 requires judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and these variations may be material.

Revenue

Revenue is derived through the provision of outputs to the Crown and from services to third parties. Revenue is recognised in the forecast statement of financial performance when earned.

Leases

Operating Leases

Where substantially all of the risks and rewards of ownership are retained by the lessor, leases are classified as operating leases.

Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term.

Finance Leases

Leases which effectively transfer to the department substantially all the risks and rewards incidental to ownership of the leased items are classified as finance leases. These are capitalised at the lower of the fair value of the asset or the present value of the minimum lease payments. The leased assets and the corresponding lease liabilities are recognised in the statement of financial position. The leased assets are depreciated over the period the department is expected to benefit from their use. The interest expense component of finance lease payments is recognised in the statement of financial performance.

Borrowing Costs

Borrowing costs are recognised as an expense when incurred.

Property, Plant and Equipment

Property, plant and equipment, other than land and buildings, is stated at cost less accumulated depreciation and impairment losses. Land and buildings are stated at fair value as determined by an independent registered valuer. Fair value is determined using market-based evidence. Land and buildings are revalued with sufficient regularity to ensure that carrying value is not materially different from fair value at the end of the reporting period. Additions between revaluations are recorded at cost. Any capitalisation thresholds applied are set out in the statement of entity-specific accounting policies.

Depreciation

Depreciation is provided on a straight-line basis so as to allocate the cost (or valuation) of an item of property, plant and equipment, less any estimated residual value, over its estimated useful life.

The estimated useful lives are set out in the statement of entity-specific accounting policies.

Leasehold improvements are capitalised and the cost is amortised over the unexpired period of the lease or the estimated useful life of the improvements, whichever is shorter.

Items under construction are not depreciated. The total cost of a capital project is transferred to the appropriate asset class on its completion and then depreciated.

Intangible Assets

Intangible assets with finite useful lives (such as computer software) are recorded at cost less accumulated amortisation and impairment losses. Any capitalisation thresholds applied are set out in the statement of entity-specific accounting policies.

Amortisation is charged to the statement of financial performance on a straight-line basis over the estimated useful life of the asset.

The estimated useful lives are set out in the statement of entity-specific accounting policies.

Intangible assets with indefinite useful lives are not amortised, but are tested at least annually for impairment. Where there is an active market for an intangible asset, the asset is recorded at a revalued amount, being fair value less any subsequent accumulated amortisation and accumulated impairment losses.

Cash and Cash Equivalents

Cash includes cash on hand and funds on deposit with banks with an original maturity of 3 months or less.

Debtors and Other Receivables

Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate, less impairment charges. Allowances for estimated irrecoverable amounts are recognised when there is objective evidence that the asset is impaired.

Inventories

Inventories held for sale or use in the production of goods and services on a commercial basis are recorded at the lower of cost and net realisable value. The cost of purchased inventory is determined using the weighted average cost method.

Inventories held for distribution for public benefit purposes are recorded at cost (calculated using the weighted average cost method) adjusted when applicable for any loss of service potential. Where inventories are acquired at no cost, or for nominal consideration, the cost is the current replacement cost at the date of acquisition.

Employee Entitlements

Pension Liabilities

Obligations for contributions to defined contribution retirement plans are recognised in the statement of financial performance as they fall due.

Other Employee Entitlements

Employee entitlements to salaries and wages, annual leave, sick leave, long service leave, retiring leave and other similar benefits are recognised in the statement of financial performance when they accrue to employees. Employee entitlements to be settled within 12 months are reported at the amount expected to be paid. Long-term employee entitlements are reported at the present value of the estimated future cash outflows.

Termination Benefits

Termination benefits are recognised in the statement of financial performance only when there is a demonstrable commitment to either terminate employment prior to normal retirement date or to provide such benefits as a result of an offer to encourage voluntary redundancy. Termination benefits to be settled within 12 months are reported at the amount expected to be paid. Other termination benefits are reported at the present value of the estimated future cash outflows.

Onerous Contracts

Where the benefits to be derived from a contract are lower than the unavoidable costs of meeting the obligation under the contract, a provision is recognised. The provision is stated at the present value of the future net cash outflows expected to be incurred in respect of the contract.

Foreign Currency

Foreign currency transactions are reported at the New Zealand dollar exchange rate at the date of the transaction.

Statement of Cash Flows

The following are definitions of the terms used in the statement of cash flows:

• cash and cash equivalents include cash on hand, cash in transit, bank accounts and deposits with an original maturity of no more than three months
• investing activities are those activities relating to the acquisition and disposal of non-current assets
• financing activities comprise capital injections by, or repayment of capital to, the Crown, and
• operating activities include all transactions and other events that are not investing or financing activities.

Taxation

Departments and Offices of Parliament are exempt from income tax as public authorities. Accordingly no charge for income tax has been provided for.

Goods and Services Tax

These forecast financial statements are GST exclusive, except for receivables and payables in the statement of financial position, which are stated on a GST inclusive basis. Where GST is not recoverable as input tax, then it is recognised as part of the related asset or expense.

The net amount of GST owing to or from the Inland Revenue Department at balance date is included as part of receivables or payables (as appropriate) in the statement of financial position.

Commitments

Future expenses and liabilities to be incurred on contracts that have been entered into at balance date are disclosed as commitments to the extent that there are equally unperformed obligations.

Contingent Liabilities and Contingent Assets

Contingent liabilities are disclosed if the possibility that they will crystallise is not remote. Contingent assets are disclosed if it is probable that the benefits will be realised.

Changes in Accounting Policies#

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Any changes in accounting policies since the date of the last audited financial statements prepared under New Zealand generally accepted accounting practice are described in the statement of entity-specific accounting policies. The last audited financial statements (30 June 2009) were prepared in accordance with NZ IFRS (New Zealand Equivalents to International Financial Reporting Standards) as appropriate for public benefit entities.

Forecast Financial Statements Ministry of Education #

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Statement of Forecast Comprehensive Income for the year ending 30 June 2011

Statement of Forecast Changes in Taxpayers' Funds for the year ending 30 June 2011#

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Forecast Statement of Financial Position as at 30 June 2011#

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Statement of Forecast Cash Flows for the year ending 30 June 2011#

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Statement of Significant Assumptions#

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These prospective financial statements have been compiled on the basis of government policies and the Ministry of Education's Output Plan as agreed with the Minister of Education and the Minister for Tertiary Education at the time the statements were finalised. These prospective financial statements have been prepared on a going concern basis.

The main assumptions are as follows:

• The department's activities will remain substantially the same as for the previous year.
• Operating costs are based on historical experience. The general historical pattern is expected to continue.
• Estimated year end information for 2009/10 is used as the opening position for the 2010/11 forecasts.

These assumptions are adopted as at 19 April 2010.

In preparing these financial statements the Ministry has made estimates and assumptions concerning the future. These estimates and judgements may differ from the subsequent actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the forecast financial statements and the 2010/11 actual financial statements include:

• revaluation of school sector land and buildings at the end of June 2010 may significantly alter the value on the Ministry balance sheet, which would in turn change the capital charge and depreciation expense for the year
• potential impairment of some school sector buildings after fully assessing the impact of defective buildings on the value of the portfolio may also significantly alter the value on the Ministry balance sheet, which in turn may change the depreciation expense for the year
• the timing of disposal of surplus school sector property assets may affect revenue and expenditure and capital withdrawals related to the sale
• economic conditions may affect assumptions used to calculate employee entitlement provisions
• the impact of some of the new policies and savings across specific Ministry outputs may differ from the initial estimates after full details of implementation have been worked out, and
• further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Statement of Entity-Specific Accounting Policies#

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The Ministry of Education has applied the accounting policies set out in Statement of Accounting Policies Standard included in this document, except as stated below.

Reporting Entity

These are the prospective financial statements of Ministry of Education, prepared in accordance with section 38 of the Public Finance Act 1989.

Ministry of Education is a Government Department as defined by section 2 of the Public Finance Act 1989. For the purposes of financial reporting Ministry of Education is a public benefit entity.

Authorisation Statement

These forecast financial statements were authorised for issue by the Secretary for Education on 19 April 2010. The Secretary for Education is responsible for the forecast financial statements presented, including the appropriateness of the assumptions underlying the forecast financial statements and all other required disclosures.

Specific Accounting Policies

These prospective financial statements of the Ministry of Education have been prepared in accordance with the requirements of the Public Finance Act 1989, which includes the requirement to comply with New Zealand generally accepted accounting practices (NZ GAAP).

These prospective financial statements of the Ministry of Education have been prepared in accordance with, and comply with, NZ IFRS as appropriate for public benefit entities.

The measurement base applied is historical cost adjusted for revaluations of assets. Revaluations are made to reflect the forecast service potential or economic benefit to be obtained through the control of assets.

Statutory Base

The prospective financial statements for the Ministry of Education are prepared pursuant to section 38 of the Public Finance Act 1989.

Property, Plant and Equipment

Property, plant and equipment are stated at the lower of cost less accumulated depreciation and net realisable value, except in the case of school buildings, which are stated at cost or valuation less accumulated depreciation.

School buildings are stated at fair value as determined by an internal valuation process. Fair value is determined using optimised depreciated replacement cost. Early childhood education centre buildings (playcentres and kindergartens) are valued based on depreciated replacement cost. Valuations are conducted on an annual basis.

School land, early childhood education land, house land and houses are recorded at market value, as assessed by an independent registered valuer. Valuations are conducted on an annual basis.

Additions between valuations are recorded at cost.

The capitalisation threshold for property, plant and equipment is $2,500.

Depreciation

Depreciation, on other than freehold land and assets under construction, is provided on a straight line basis at rates that will write off the cost or valuation of the assets, less their estimated residual values, over their estimated useful lives.

The estimated useful lives of property, plant and equipment are:

• Permanent school building roof, services, fitouts, lifts and boilers - 15 to 45 years.
• Relocatable classrooms - 40 years.
• Ancillary buildings, covered ways, houses, kindergartens, playcentres, site improvements, swimming pools - 30 to 50 years.
• Permanent school building fabric - 75 years.
• Motor vehicles - 4 years.
• Plant and equipment - 3 to 8 years.

Intangible Assets

The estimated useful lives of intangible assets are:

• Computer software - 3 to 5 years.

The capitalisation threshold for intangible assets is $2,500.

Properties Intended for Sale

Assets identified as surplus are recorded at the lower of carrying value at the date the asset is designated as surplus, and net realisable value.

Cost Allocation

All costs are charged to activities or projects. Direct costs are charged directly to non-overhead activities or projects. Indirect costs are charged to overhead activities. Costs in overhead activities are then ascribed to non-overhead activities based on cost drivers.

Criteria for Direct and Indirect Costs - direct costs are those costs charged directly to a non-overhead activity. Indirect costs are those overhead costs that cannot be identified with a specific output in an economically feasible manner, and are charged to an overhead activity.

Direct Costs Assigned to Outputs - non-overhead activities are mapped directly to outputs. Costs in these activities are therefore assigned directly to the relevant outputs. This includes costs related to the provision of school sector property.

Basis for Assigning Indirect and Corporate Costs to Outputs - indirect costs are assigned to non-overhead activities, and thereby to outputs, on the basis of direct personnel costs captured within the non-overhead activity.

Notes to the Financial Statements#

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Note 1 - Other Revenue

Note 2 - Operating Expenses#

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Note 3 - Debtors and Other Receivables#

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Note 4 - Property, Plant and Equipment#

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Note 5 - Intangible Assets#

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Note 6 - Reconciliation of Net Surplus to Net Cash Flows from Operating Activities for the year ending 30 June 2011#

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Forecast Financial Statements Education Review Office#

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Statement of Forecast Comprehensive Income for the year ending 30 June 2011

Statement of Forecast Changes in Taxpayers' Funds for the year ending 30 June 2011#

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Forecast Statement of Financial Position as at 30 June 2011#

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Statement of Forecast Cash Flows for the year ending 30 June 2011#

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Statement of Significant Assumptions#

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These forecast financial statements have been compiled on the basis of existing government policies and Ministerial expectations at the time the statements were finalised.

The main assumptions are as follows:

• ERO's activities will remain substantially the same as for the previous year.
• Personnel costs are based on 226 full time equivalents.
• Operating costs are based on historical experience adjusted for any known expected increase in expenditure items.
• Estimated year end information for 2008/09 is used as the opening position for the 2009/10 forecasts.

These assumptions are adopted as at 15 April 2010.

Factors that could lead to material differences between the forecast financial statements and the 2009/10 actual financial statements include changes to the baseline budget through new initiatives, or technical adjustments.

Statement of Entity-Specific Accounting Policies#

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The Education Review Office (ERO) has applied the accounting policies set out in Statement of Accounting Policies Standard included in this document, except as stated below.

Reporting Entity

These are the prospective financial statements of ERO, prepared in accordance with section 38 of the Public Finance Act 1989.

ERO is a Government Department as defined by section 2 of the Public Finance Act 1989. For the purposes of financial reporting ERO is a public benefit entity.

Authorisation Statement

These forecast financial statements were authorised for issue by the Chief Review Officer on 15 April 2010. The Chief Review Officer is responsible for the forecast financial statements presented, including the appropriateness of the assumptions underlying the forecast financial statements and all other required disclosure.

Specific Accounting Policies

Property, Plant and Equipment

Capitalisation thresholds applied are set out as follows:

• Computer hardware - $1,000.
• Motor vehicles - $500.
• Office equipment - $1,000.
• Leasehold improvements - $1,500.
• Furniture and fittings - $1,500.

The estimated useful life and associated depreciation rates applied to each class of fixed assets are as follows:

• Computer hardware - 2.5 years to 4 years, 25% to 40%.
• Motor vehicles - 4 years to 5 years, 20% to 25%.
• Office equipment - 5 years, 20%.
• Leasehold improvements - 10 years, 10%.
• Furniture and fittings - 10 years, 10%.

Intangible Assets

Capitalisation thresholds applied are set out as follows:

• Computer software - $1,000.
• Review procedures - $20,000.

The estimated useful life and associated amortisation rates applied to intangible assets are as follows:

• Computer software - 4 years, 25%.
• Review procedures - 5 years, 20%.

Cost Allocation

Direct costs are costs incurred by output delivery management units. Direct costs are attributed to outputs based on time spent on each output from ERO's time recording system.

Indirect costs are the costs of corporate management and support services which cannot be identified with a specific output in an economically feasible manner. Indirect costs are allocated to output-delivery management units (excluding Policy Services and Ministerial Services) through the most appropriate cost driver as a proxy for consumption.

The cost of Education Evaluation Reports includes a transfer of time from institutional reporting activities. This transfer represents time spent by review officers in institutions collecting overview information.

The costs of Policy Services and Ministerial Services are based on the estimated hours at the average charge-out rate.

Notes to the Financial Statements#

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Note 1 - Operating Expenses

Note 2 - Reconciliation of Net Surplus to Net Cash Flows from Operating Activities for the year ending 30 June 2011#

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Forecast Financial Statements Ministry of Research, Science and Technology #

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Statement of Forecast Comprehensive Income for the year ending 30 June 2011

Statement of Forecast Changes in Taxpayers' Funds for the year ending 30 June 2011#

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Forecast Statement of Financial Position as at 30 June 2011#

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Statement of Forecast Cash Flows for the year ending 30 June 2011#

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Statement of Significant Assumptions#

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These forecast financial statements have been compiled on the basis of existing government policies and Ministerial expectations at the time the statements were finalised.

The main assumptions are as follows:

• The department's activities will remain substantially the same as for the previous year.
• Personnel costs are based on 84 staff positions (84 full time equivalents).
• Operating costs are based on historical experience. The general historical pattern is expected to continue [explain if this is not the case].
• Estimated year end information for 2009/10 is used as the opening position for the 2010/11 forecasts.

These assumptions are adopted as at 1 April 2010.

Factors that could lead to material differences between the forecast financial statements and the 2010/11 actual financial statements include:

• changes to the baseline budget through new initiatives, or technical adjustments
• changes in the level of activity undertaken by the Ministry over the last three months.

Statement of Entity-Specific Accounting Policies#

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The Ministry of Research, Science and Technology has applied the accounting policies set out in Statement of Accounting Policies Standard included in this document, except as stated below.

Reporting Entity

These are the prospective financial statements of Ministry of Research, Science and Technology , prepared in accordance with section 38 of the Public Finance Act 1989.

Ministry of Research, Science and Technology is a Government Department as defined by section 2 of the Public Finance Act 1989. For the purposes of financial reporting Ministry of Research, Science and Technology is a public benefit entity.

Authorisation Statement

These forecast financial statements were authorised for issue by Ministry of Research, Science and Technology on 20 April 2010. The Ministry of Research, Science and Technology is responsible for the forecast financial statements presented, including the appropriateness of the assumptions underlying the forecast financial statements and all other required disclosure.

Specific Accounting Policies

Property, Plant and Equipment

Capitalisation thresholds applied are set out below.

• IT Equipment / Hardware - $1,500
• All other property, plant and equipment - $1,500

Depreciation

The estimated useful lives of property, plant and equipment are set out below.

• Leasehold improvements - expected life of the lease (12 years at present)
• IT Equipment / Hardware - 3 years
• Furniture and office equipment - 5 years
• Other categories - 5 years

Intangible Assets

Capitalisation thresholds applied are:

• Purchased software - $1,500
• Internally developed software - $1,500

The estimated useful lives of intangible assets are set out below:

• Purchased software - 3 years
• Internally developed software - 3 years

Cost Allocation

The Ministry has derived the costs of outputs using the cost allocation system outlined below:

• Direct costs assigned to outputs - direct costs are charged directly to outputs.
• Allocating indirect and corporate costs to outputs - indirect costs (including personnel directly applied but whose cost is pooled) are allocated by a proportion of budgeted direct staff time for each output.

'Direct costs' are those costs directly assigned to an output whereas 'indirect costs' are those costs that cannot be identified in an economically feasible manner with a specific output. Corporate costs are all costs incurred by the Ministry's service and support units.

Notes to the Financial Statements#

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Note 1 - Operating Expenses

Note 2 - Reconciliation of Net Surplus to Net Cash Flows from Operating Activities for the year ending 30 June 2011#

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Purpose of Information Supporting the Estimates#

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The Information Supporting the Estimates provides members of Parliament with information on expected performance to:

• support their examination of the appropriations and other authorities requested by the Government in the first Appropriation Bill for the forthcoming financial year, and
• provide a basis against which they can later assess the actual performance of each individual department and Office of Parliament over that financial year.

The Information Supporting the Estimates is organised into 10 volumes by sector, each of which covers one or more Votes. The scope of each sector and the allocation of Votes to a sector reflect a balancing of three desired characteristics - namely that each volume should, where possible:

• reflect natural sectors
• keep together Votes administered by the same department, and
• keep together Votes allocated to a particular select committee of the House of Representatives for examination.

The number of sectors and coverage of each sector was set in consultation with the Finance and Expenditure Committee. The 10 sectors are:

• Economic Development and Infrastructure Sector
• Education and Science Sector
• Environment Sector
• External Sector
• Finance and Government Administration Sector
• Health Sector
• Justice Sector
• Māori, Other Populations and Cultural Sector
• Primary Sector
• Social Development and Housing Sector.

 

Votes and Departments in Each Sector#

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Purpose and Nature of Appropriations#

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An appropriation is a statutory authority from Parliament allowing the Crown or an Office of Parliament to incur expenses or capital expenditure.

Neither the Crown nor an Office of Parliament can legally incur any expense or capital expenditure - as those terms are defined in the Public Finance Act 1989 (PFA) - unless it is expressly authorised by or under an Act of Parliament.

Each appropriation is allocated to, and managed as, one of six types of appropriation.

Limits Created by Appropriations#

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Each appropriation has a defined scope that limits the uses or activities for which the expenses or capital expenditure can be incurred. The scope should be sufficient on its own to establish the nature and extent of the authority to incur expenses or capital expenditure. The wording of the appropriation scope should achieve the balance between being sufficiently precise to act as an effective constraint against non-authorised activities and not so specific that it inadvertently limits activity intended to be authorised.

In most cases an appropriation also limits the amount of expenses or capital expenditure that can be incurred, and the time period within which those expenses or capital expenditure can be incurred.

Aside from the very limited exclusions provided for in the PFA, the amount of expense or capital expenditure authorised by an appropriation is measured in accordance with generally accepted accounting practice.

As generally accepted accounting practice does not normally treat GST as an expense, appropriation amounts also generally exclude GST. Prior to 2005/06, however, appropriations included applicable GST. All prior-year appropriation data, such as in the Summary of Trends table in the Estimates and the Summary of Financial Activity Table for each Vote in Information Supporting the Estimates - have been adjusted to exclude GST to allow appropriate comparison.

Responsibility for Appropriations#

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Each appropriation is the responsibility of a designated Minister, who controls the right to use that appropriation within the limits authorised by Parliament. A department is also assigned to administer that appropriation in accordance with the Minister's wishes concerning its use.

A Vote is a group of appropriations (and can be a single appropriation) administered by a single department. Different appropriations within a Vote may be the responsibility of different Ministers.

 

Types of Appropriation#

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The PFA provides for six types of appropriation. Four appropriation types authorise the incurring of expenses; one type authorises the incurring of capital expenditure; and the remaining type authorises both.

These appropriation types can be further differentiated by whether the expenses or capital expenditure are departmental or non-departmental transactions.

Types of Output Expense Appropriations#

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A number of variations are possible for output expense appropriations. In particular, the constraint on the amount of expense that can be incurred is not always a fixed amount; and an output expense appropriation can cover more than one class of outputs.

Appropriation Period#

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The length of the appropriation period affects how appropriations are presented in the Estimates and Supplementary Estimates. Three kinds of appropriation can be distinguished on the basis of period - annual and multi-year (as referred to in the above table on types of output expense appropriations), and permanent:

• Annual Appropriations - Most appropriations listed in the Estimates and Supplementary Estimates allow expenses or capital expenditure to be incurred only during a particular financial year. The annual amounts, for which parliamentary authority is being sought, are shown in bold type in Details of Annual and Permanent Appropriations in the Estimates and Supplementary Estimates for each Vote. The amounts for RDAs and annual DDAs are forecasts only, and so are not shown in bold type.
• Multi-Year Appropriations (MYAs) - The PFA also permits appropriations that allow expenses or capital expenditure to be incurred during a specified period that spans the whole or parts of more than one financial year, but no more than five financial years. The details of each MYA, including its commencement date and expiry date, are specified in Details of Multi-Year Appropriations in the Estimates and Supplementary Estimates for relevant Votes.
• Permanent Appropriations (sometimes referred to as permanent legislative authorities or PLAs) -Permanent appropriations are authorised by legislation other than an Appropriation Act and continue in effect until revoked by Parliament. Generally the authorising legislation will impose limits on the scope of the appropriation and not its amount. For those appropriations that with limits set in cash terms, section 11(2) of the Public Finance Act 1989 requires that they be reported on an accrual basis. The usual legislative wording allows for expenses or capital expenditure to be incurred for the purpose specified in the legislation “without further appropriation than this section”. Details of permanent appropriations are included in Details of Annual and Permanent Appropriations in the Estimates and Supplementary Estimates for each Vote for completeness, though the amount specified is a forecast rather than a limit. The amounts of permanent appropriations are therefore not shown in bold type. The scope of a permanent appropriation will reference the relevant section of the authorising legislation.

Guide to Reading Information Supporting theEstimates#

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The Information Supporting the Estimates for each of the 10 sectors comprises five components, each of which is briefly described, below.

1 Sector Overview Information

The first component of the Information Supporting the Estimates may include a statement, agreed by all Ministers responsible for appropriations in each Vote included in the sector, that presents an overview of the sector and a high-level summary of the government's expectations and priorities. The Overview also includes Ministerial and Chief Executive Statements of Responsibility for the information provided in the Information Supporting the Estimates.

2 Performance Information Relating to Appropriations in Each Vote#

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The second component of the Information Supporting the Estimates presents performance information relating to each appropriation.

Thetitle pages for each Vote specify the Minister(s) responsible for existing and proposed appropriations in the Vote, and the Responsible Minister for the department. The performance information meets the requirements of sections 15 and 41(1)(e) of the PFA and contains up to six parts. If particular information is not applicable to the Vote or a specific appropriation or type, or is otherwise unavailable, the relevant heading is not included.

Part 1 - Summary of the Vote

The Summary of the Vote comprises:

• Part 1.1 Overview of the Vote - A plain-language summary of the focus of the appropriations through a brief explanation of the Vote. The Overview also appears at the start of the Vote in the Estimates.
• Part 1.2 High-Level Objectives of the Vote - The objectives for the Vote presented through links and relationships and high-level priorities and outcomes to which they contribute. Where applicable, priorities and outcomes are drawn from the priorities and desired outcomes and published strategy documents. Links are also made to specific government strategies. Links may also be made to specific Government objectives.
• Part 1.3 Trends in the Vote - A presentation of the actual and estimated trends in the Vote, comprising:
  • Summary of Financial Activity - A table showing financial information over the preceding five years (actual, budgeted or estimated actual), the current year (Budget) and the following three years (estimated) for the type of appropriations and Crown revenue and capital receipts.
  • New Policy Initiatives - A table showing how new initiatives (and the associated expenses or capital expenditure) are allocated to appropriations in the Vote. References are included where appropriations in other Votes are affected by the same initiative.
  • Analysis of Significant Trends - High-level analysis of appropriations and Crown revenue and capital receipts by type over the nine financial years covered by the Summary of Financial Activity table, explanations of significant changes and may also contain graphical presentations.

• Part 1.4 Reconciliation of Changes in Appropriation Structure - a table providing a reconciliation and explanation of any changes in the structure or classification of appropriations made in the Budget year. These changes are restated for the previous financial year to facilitate comparison.

Part 2 - Details and Expected Performance for Output Expenses#

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This Part provides further detail about appropriations and expected performance for output expenses.

• Part 2.1 Departmental Output Expenses - Intended impacts, outcomes and objectives are presented for departmental output expense appropriations in the Vote. This is followed by information on each appropriation, including its scope, a table showing expenses and revenue (distinguishing the revenue sources between the Crown and others), a statement of reasons for change in the appropriation (if material), and tables detailing performance measures and standards for significant aspects of expected output performance, any conditions on use of appropriation, any memorandum accounts (which record accumulated surpluses and deficits incurred in the provision of outputs on a full cost-recovery basis), and any current and past policy initiatives affecting the appropriation.
  • Information on impacts and outcomes or objectives to which the outputs contribute is provided. Further information on the relationships between outputs, impacts, and outcomes or objectives is outlined in Part 1.2 and the Statement of Intent. Conditions on use include administrative criteria and processes contained in legislation, regulation and Government decisions, which may be reference in scope statement or performance measures. The current and past policy initiatives tables provides a five-year history of announced initiatives that impact on the Budget year, the preceding year and the following three years.
  • For MCOA, an explanation is provided as to why the classes of outputs have been grouped under a single appropriation, and the scope statement, expenses and revenue, and performance information is presented for each output class.
  • Information provided for MYAs enables the original appropriation to be reconciled to the adjusted level if changes have been approved or are proposed, and the balance remaining to be derived taking account of actual or estimated expenses incurred to date.
  • The appropriation scope, expenses and revenue, and output performance measures and standards match information required to be included in a department's Statement of Forecast Service Performance with respect to departmental output expense appropriations used by the department.
• Part 2.2 Non-Departmental Output Expenses - This sub-part contains comparable information to that presented in Part 2.1 on departmental output expense appropriations. The main differences are that details of third parties’ other revenue is not relevant and a summary of service providers is included.
  • The service providers table shows Crown entities and non-governmental organisations providing outputs funded through the Vote, and (where applicable) the mechanism for reporting actual performance to Parliament and the expiry of the Government's resource commitment. The reporting mechanisms are typically an entity's annual report or a report by the responsible Minister required by section 32A of the PFA. Where the provider is a Crown entity that is required to produce a Statement of Intent, its annual report may contain more detailed performance information at the output class or output level. ‘Section 32A' reports include a statement of service performance in relation to the appropriation.

Part 3 - Details for Benefits and Other Unrequited Expenses#

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Part 3 provides performance information about appropriations for benefits and other unrequited expenses incurred by the Crown. No departmental transactions arise under this appropriation type.

• Part 3.2 Non-Departmental Benefits and Other Expenses - Information on each appropriation includes impacts and outcomes intended to be achieved, a scope statement, expense components, reasons for material changes, any conditions of use, and details of any current and past policy initiatives over the five years up to and including the Budget year.

Part 4 - Details for Borrowing Expenses#

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This Part provides detail about appropriations for borrowing expenses. No departmental borrowing expense appropriations exist at present.

• Part 4.2 Non-Departmental Borrowing Expenses - The set of performance information is the same as that for non-departmental benefits and other expenses, except that conditions on use are no specified.

Part 5 - Details and Expected Results for Other Expenses#

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Part 5 provides detail about appropriations for:

• Part 5.1 Departmental Other Expenses - It is uncommon for this category of appropriation to be utilised. In the few cases where it occurs, the performance information is the same as that for non-departmental other expense appropriations except for a summary of reporting mechanisms.
• Part 5.2 Non-Departmental Other Expenses- Information on other expenses incurred by the Crown covers intended impacts and outcomes, appropriation scope, expenses analysed by component, reasons for material changes in the appropriation, expected results and standards, any conditions on use, any current and past policy initiatives, and a summary of mechanisms for reporting actual performance to Parliament.

Part 6 - Details and Expectations of Capital Expenditure#

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This Part provides further details about appropriations for capital expenditure.

• Part 6.1 Departmental Capital Expenditure - The purchase or development of assets by a department is made under a permanent appropriation authorised by section 24(1) of the PFA. Capital expenditure is defined in section 2 as the cost of assets acquired or developed, including tangible, intangible or financial assets, and any ownership interest in entities, but excluding inventories. The appropriation appears in the Vote that contains appropriations that are the responsibility of the department's Responsible Minister.
  • Information is provided on intended impacts and outcomes of the appropriation, its scope, expenditure analysed by standard asset categories, reasons for material changes in the appropriation, and expected results. The scope statement is in a standard form for all departments. The performance information relates to the department as a whole and is not limited to any specific capital injection.
• Part 6.2 Non-Departmental Capital Expenditure - Performance information for capital expenditure incurred by the Crown is the same as that for departmental capital expenditure except for not detailing asset categories and the addition of any conditions on use of the appropriation, any current and past policy initiatives, and a summary of the mechanism for reporting to Parliament.
  • The scope statement indicates the form of interest or asset acquired by the Crown, such as a capital injection (equity), loan or shares.

The following table summarises the performance information that is required for a ‘standard' appropriation in each sub-part.

Information on reasons for change, conditions on use, current and past policy initiatives, and reporting mechanisms appears where applicable or material. Memorandum accounts are relevant only in Part 2.1. Some variations exist for non-standard appropriations, including MCOAs in Parts 2.1 and 2.2 and MYAs in Parts 2.1, 2.2, 5.2 and 6.2. Furthermore performance information may not be available for some appropriations.

3 Statement of Forecast Service Performance of Departments#

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The third component of the Information Supporting the Estimates of Appropriations comprises the Statement of Forecast Service Performance for each department included in the sector, by reference to material already set out in Part 2.1 of Votes containing appropriations proposed to be used by the department.

4 Forecast Financial Statements of Departments#

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The fourth component of the Information Supporting the Estimates begins with a Statement of Common Accounting Policies applicable to all departments. The forecast financial statements for the forthcoming financial year for each department covered by the sector includes a:

• Statement of Forecast Comprehensive Income
• Statement of Forecast Changes in Taxpayers' Funds
• Forecast Statement of Financial Position
• Statement of Forecast Cash Flows
• Statement of Significant Assumptions.

Each department will include a Statement of Entity- Specific Accounting Policies detailing policies for any matters not addressed by the Statement of Common Accounting Policies (such as a “going concern” statement) or where its policies are more specific than the common policies (such as capitalisation thresholds and estimated useful lives of individual classes of assets). Notes to the Financial Statements provide additional details to assist interpretation of the accounts and to meet disclosure requirements outlined in legislation and accounting standards.

5 Statements of Intent of Departments#

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The final component of the Information Supporting the Estimates presents the Statements of Intent of the departments covered by each sector. These statements contain the information required by section 40 of the PFA. They focus on the medium term and generally cover:

• Nature and scope of the department's functions - A brief high-level description of the department's functions, addressing its role(s) and purpose and how it intends fulfilling them.
• Strategic direction - impacts and outcomes - A brief high-level overview of the department's strategic direction covering both the impacts and outcomes the department is seeking to achieve (or contribute to) and the strategic environment in which the department operates through, in particular, its responses to the government's priorities.
• Operating intentions - Information that describes how the department intends to achieve (or contribute to) those desired impacts and outcomes through its operations. This section should also include the main measures and standards the department will use to assess and demonstrate what it has achieved, including measures of outcome achievement, impact and cost effectiveness.
• Managing in a changeable operating environment - Information on the risks to achievement of the desired outcomes and priorities, and the department's mitigation strategies.
• Assessing organisational health and capability - The department's intentions for building and strengthening its internal capability, including its responses to the development goals for the State Services and its strategic approach to managing its asset base and forecast capital expenditure in the medium term. If capital expenditure is significant, it is in a separate section.
• Additional information and statutory reporting requirements - As required either by the responsible Minister or Minister of Finance, or by specific legislation.

Terms and Definitions#

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The table below contains terms that are used in the Estimates and the Information Supporting the Estimates.

Useful Links#

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The suite of Budget 2010 documents can be accessed in the Budgets section of the website: www.treasury.govt.nz/budget/2010. Documents providing guidance on the PFA and the public sector financial management system can be accessed in the Public Finance Overviews section of the Treasury's website: www.treasury.govt.nz/publications/guidance/publicfinance.

Ministerial Statements of Responsibility#

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Each of us is satisfied that the information on future operating intentions provided by our respective departments and included in the Information Supporting the Estimates for the Education and Science Sector is in accordance with sections 38, 40 and 41 of the Public Finance Act 1989 and is consistent with the policies and performance expectations of the government.

Chief Executive Statements of Responsibility#

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Ministry of Education

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Education and Science Sector relating to the Ministry of Education and for the Vote for which the Ministry of Education is the administering department. Specifically, this information is contained in the Ministry of Education's statement of forecast service performance, forecast financial statements and statement of intent.

This information has been prepared in accordance with the Public Finance Act 1989. It is also consistent with the proposed appropriations set out in the Appropriation (2010/11 Estimates) Bill, as presented to the House of Representatives in accordance with section 13 of the Public Finance Act 1989, and with existing appropriations and financial authorities.

Education Review Office

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Education and Science Sector relating to the Education Review Office and for the Vote for which the Education Review Office is the administering department. Specifically, this information is contained in the Education Review Office's statement of forecast service performance, forecast financial statements and statement of intent.

This information has been prepared in accordance with the Public Finance Act 1989. It is also consistent with the proposed appropriations set out in the Appropriation (2010/11 Estimates) Bill, as presented to the House of Representatives in accordance with section 13 of the Public Finance Act 1989, and with existing appropriations and financial authorities.

Ministry of Research, Science and Technology

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Education and Science Sector relating to the Ministry of Research, Science and Technology and for the Vote for which the Ministry of Research, Science and Technology is the administering department. Specifically, this information is contained in the Ministry of Research, Science and Technology's statement of forecast service performance, forecast financial statements and statement of intent.

This information has been prepared in accordance with the Public Finance Act 1989. It is also consistent with the proposed appropriations set out in the Appropriation (2010/11 Estimates) Bill, as presented to the House of Representatives in accordance with section 13 of the Public Finance Act 1989, and with existing appropriations and financial authorities.

Performance Information for Appropriations Vote Crown Research Institutes#

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MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Research, Science and Technology (M56)

ADMINISTERING DEPARTMENT: The Treasury

MINISTER RESPONSIBLE FOR THE TREASURY: Minister of Finance

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Minister of Research, Science and Technology is responsible for appropriations in Vote Crown Research Institutes (CRIs) for the 2010/11 financial year totalling $1.074 million. This covers the purchase of advice on ownership, performance monitoring, and governance advice to the Minister of Research, Science and Technology and the Minister for Economic Development in respect of the CRIs, Research and Education Advanced Network New Zealand Ltd and New Zealand Venture Investment Fund Ltd monitored by the Treasury.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

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Government Priorities and Outcomes - Links to Appropriations

Part 1.3 - Trends in the Vote#

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Summary of Financial Activity

Analysis of Significant Trends

The constant level of output expenditure in Vote CRI's shows the effective management of cost pressures. The Treasury's Crown Ownership Monitoring unit will also monitor the financial performance of REANNZ.

The variation in other expenditure reflects the one-off nature of these transactions. Appropriations enable the Crown to settle claims under indemnities and provisions provided to CRIs when they were established. More recently, all of the expenditure has been associated with reimbursing CRIs for the costs associated with cleaning up contaminated sites. While most of these contaminated sites have been cleaned up, there is ongoing groundwater testing at AgResearch's Invermay site and, potentially, other excluded liabilities that may arise in the future.

Part 2 - Details and Expected Performance for Output Expenses#

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Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

Crown Company Monitoring Advice to the Minister of Research, Science and Technology and the Minister for Economic Development (M56)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

Funding was transferred from Vote CRI to Vote State Owned Enterprises in 2009/10 to reflect additional activity and costs associated with integrating CCMAU and Treasury in monitoring activity into a new business unit the Crown Ownership Monitoring Unit (COMU).

Output Performance Measures and Standards

Statement of Estimated and Forecast Net Worth of Entities Owned

The Minister for CRIs and the Minister for Economic Development are responsible Ministers for the Government's ownership interests in CRIs, REANNZ and NZVIF, respectively (the Minister of Finance is the other shareholding Minister). The estimated net worth (total assets less total liabilities) of CRIs, REANNZ and NZVIF, which are monitored under the auspices of Vote CRIs, are listed in the table below.

Changes in net worth result from the net effects of profit (after tax), dividends paid and capital injections or withdrawals. The data for these organisations are based on forecasts provided for inclusion in the 2010 Budget.

Conditions on Use of Appropriation

Policy standard ratings

In 2008/09 the Treasury commissioned an external review to assess the standard of policy advice on a sample of policy outputs provided during that financial year. That review established a benchmark against which to assess future performance. The Treasury intends to commission biennial reviews of the quality of its policy advice to provide an assessment of its performance against the standard.

Quality standards for policy advice

This Quality Standard for Policy Advice sets out the characteristics or dimensions of policy advice that will best enable it to promote well-informed high-quality decision-making by Ministers. However, the quality dimensions below are not a checklist and not all dimensions will be equally important in every case - judgements are required at the outset about how to apply and balance the quality dimensions to ensure a particular piece of advice is fit for purpose in achieving the result sought.

When undertaking a piece of work, explicit consideration needs to be given to the following:

• What point are Ministers at in their decision-making process? Can Treasury add value? What are our opportunities to have an impact?
• What result are we seeking by providing a piece of advice?
• How should the quality dimensions below be applied and balanced to achieve this result?
• What is the relative priority of this piece of work?
• What level of investment is warranted?

Dimensions of quality policy advice

At the end:

• Did we achieve the result we were seeking?
• Were our judgements about what would be fit for purpose correct?
• What would we do differently next time?
• How can we capture and share this learning?

Performance Information for Appropriations Vote Education Review Office#

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MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister Responsible for the Education Review Office (M27)

ADMINISTERING DEPARTMENT: Education Review Office

MINISTER RESPONSIBLE FOR EDUCATION REVIEW OFFICE: Minister Responsible for the Education Review Office

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Minister Responsible for the Education Review Office is responsible for appropriations in the Vote for the 2010/11 financial year covering the following:

• a total of $26.084 million for reviews of early childhood education service providers, and schools and other education service providers, and
• a total of $2.950 million for education evaluation reports, policy services, ministerial and contractual services.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

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Vote Education Review Office (ERO) contributes to the Government's vision for "a world leading education system that equips all New Zealanders with the knowledge, skills and values to be successful citizens in the 21st Century" by independently evaluating the quality of education and care in schools, early childhood education services and other education providers in the pre-tertiary education sector.

The education sector is committed to building strong learning foundations for literacy and numeracy, increasing the levels of educational attainment and maximising the value received from its services. This is reflected in the shared outcomes for education: "Every child has the opportunity to participate in high quality early childhood education"; "Every child achieves literacy and numeracy levels that enable their success"; "Every young person has the skills and qualifications to contribute to their and New Zealand's future"; "Relevant and efficient tertiary education provision that meets student and labour market needs"; and "Maori enjoying education success as Maori".

Government Priorities and Outcomes - Links to Appropriations

Part 1.3 - Trends in the Vote#

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Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

Total Vote: All Appropriations

Vote ERO contains appropriations for departmental output expenses and capital expenditure.

Departmental output expense appropriation levels for outputs supplied by ERO was increased:

• in 2005/06 for maintaining capability in the face of increased input costs and for improved review coverage of schools and early childhood services
• in 2005/06 to 2008/09 for maintaining capability to recruit and retain appropriately skilled review officers in the face of increases in teaching salaries.

In line with the Government's priorities for 2009/10 the above increases were offset by decreases in departmental output expense appropriation levels for:

• cessation of adult and community education reviews
• cessation of post-review assistance workshops to schools
• reduction in the number of homeschooling education reviews.

There are no significant trends in capital expenditure appropriation levels.

Part 2 - Details and Expected Performance for Output Expenses#

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Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

Accountability Reviews MCOA (M27)

Scope of Appropriation

Explanation for Use of Multi-Class Output Expense Appropriation

From 2006/07 a multi-class output expense appropriation called Accountability Reviews was established. This multi-class output expense appropriation aggregates output classes Early Childhood Education Services and Schools and Other Education Service Providers that deliver the same service (education reviews) to two different parts of the education sector (early childhood education services and schools). Both of the output classes use similar resources in working toward the same outcome of ensuring delivery of the highest quality pre-tertiary education to all young New Zealanders. Grouping these will recognise this alignment and allow for more flexibility in resourcing levels across the two.

Expenses and Revenue

Reasons for Change in Appropriation

The change in appropriation levels between output classes reflect the latest forecasts in output activities.

Output Performance Measures and Standards

ERO recognises an education review as an output at the time it is available for delivery to the Minister responsible for the Education Review Office. Partially complete reports are not reported.

The standard procedures describe the processes to be followed, the evaluation indicators to be used, and the accepted principles of good practice for conducting reviews. The standard procedures set out quality standards relating to the investigation and reporting processes, and to the content, presentation and timeliness of reports. They also describe the quality management procedures to be applied systematically within ERO.

Current and Past Policy Initiatives

Quality of Education Reports and Services (M27)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

There have been minimal changes to this appropriation.

Output Performance Measures and Standards

Education evaluation reports evaluate educational issues including delivery of the curriculum, the effectiveness of governance, management structures and systems, student achievement, the delivery of teaching services, and barriers to learning across a number of institutions. Education evaluation reports may include guides to good practice. The information for these reports is gathered from the education reviews carried out by ERO.

Education evaluation reports tend to follow specific themes. These themes may be drawn from issues arising from the Government's education initiatives and issues of strategic importance identified by ERO from its regular reporting on schools and early childhood education services.

Policy services involve advice to, or on behalf of, the Minister responsible for the Education Review Office, on policy proposals or any other issues referred to, or identified by, the Chief Review Officer.

ERO is not primarily a provider of policy advice. From its regular presence in schools and early childhood services it is, however, in a position to make a useful contribution to assist the policy agencies. This service will contribute to the Government's policy priorities for schools and early childhood education service providers.

Contractual services include one-off reviews of institutions (or certain aspects of them), and analyses of particular matters under specific terms of reference agreed with ERO. Contractual reviews are conducted on a fee-for-service basis.

Current and Past Policy Initiatives

Part 6 - Details and Expected Results for Capital Expenditure#

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Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

Education Review Office - Capital Expenditure PLA (M27)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The decrease in capital expenditure is mainly due to the timing of computer software purchases in 2009/10 carried forward from 2008/09.

Performance Information for Appropriations Vote Education#

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MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Education (M26), Minister for Tertiary Education (M68)

ADMINISTERING DEPARTMENT: Ministry of Education

MINISTER RESPONSIBLE FOR MINISTRY OF EDUCATION : Minister of Education

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Minister of Education is responsible for appropriations in Vote Education for the 2010/11 financial year covering the following:

• A total of nearly $1,793 million for services from the Ministry of Education (depreciation and capital charge on school accommodation and special education services being the most significant costs).
• A total of nearly $386 million for educational services from central education Crown entities (New Zealand Qualifications Authority and Career Services) and other non-departmental providers. The most significant costs are for professional development in the schools and early childhood education sector and school transport services.
• A total of nearly $52 million for allowances, bursaries, scholarships (including national study awards for teachers) and grants.
• A total of just over $6,209 million for educational services from schools (including teacher salaries), early childhood education providers, and other education providers.
• A total of nearly $25 million for capital for Crown entities and schools.
• A total of nearly $713 million for capital expenditure by the Ministry of Education, mainly related to school sector property.

The Minister for Tertiary Education is responsible for appropriations in Vote Education for the 2010/11 financial year covering the following:

• A total of nearly $14 million for services from the Ministry of Education.
• A total of just over $2,214 million for student achievement component funding provided to tertiary education institutions, educational services from the Tertiary Education Commission and other non-departmental providers.
• A total of nearly $22 million for tertiary scholarships, international education and other grants.
• A total of nearly $541 million for educational services from tertiary education institutions (including capability and research funding), the adult and community education sector and other education providers, as well as other expenses.
• A total of just over $2 million for capital for tertiary education institutions.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

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The Ministry will focus on implementing a set of specific policies and programmes to deliver on six education outcomes determined by Government:

Increasing opportunity for children to participate in quality early childhood education.

• Children need the opportunity to participate in early childhood education. Increased participation in target geographical areas and among groups with traditionally low participation rates will be the focus.

Every child achieves literacy and numeracy levels that enable their success.

• Every child needs the opportunity to develop their literacy and numeracy skills and to be supported and enabled to make as much progress in developing these skills as they can.

Every young person has the skills and qualifications to contribute to their and New Zealand's future.

• To keep young people engaged in education, a wider range of relevant learning options needs to be developed within schools and through partnerships between schools, training and tertiary education providers and local businesses. Schools must be supported to ensure they are responsive to the needs of every student.

Relevant and efficient tertiary education provision that meets student and labour market needs.

• In the current financial context, tertiary education is critical to sustain and grow productivity and to support industry and employers in developing and retaining skilled employees.

Maori enjoying education success as Maori.

• Identity, culture and Maori language are critical ingredients for the success of Maori students in education. Collaboration with schools and providers is essential to ensure they meet the educational needs of Maori students.

The Ministry is capable, efficient and responsive to achieve education priorities.

• The performance of the Ministry needs to be continually improving so as to support outcomes for every student and ensure that expenditure produces the maximum benefits.

The departmental appropriations are focused primarily on strategic leadership of the sector and education system, management of the school sector property portfolio, support and resources for education providers, teachers and communities and interventions for target student groups. Non departmental funding is primarily used for early childhood education, primary and secondary schooling, tertiary education and research.

The table below shows how the Government priorities, education outcomes and the appropriations interconnect. Only the appropriations most significant in terms of expenditure, or impact, on each priority are listed.

Government Priorities and Outcomes - Links to Appropriations

Part 1.3 - Trends in the Vote#

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Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

Significant changes in departmental and non-departmental appropriations between 2005/06 and 2013/14 are discussed briefly below.

Departmental Expenditure

The growth in departmental output expenditure is principally reflected in the increased costs of providing school land and buildings and other facilities, including capital charge and depreciation. This results from the increased value of the property portfolio after additional Government investment in schools and the annual revaluation of the portfolio, partly offset by changes in the capital charge rate. From 2010/11 there is also provision for rationalisation of surplus school property and the impact of Treaty of Waitangi settlements, notably the leasing back of school sites.

There is also increased provision for services for students with special education needs, including provision for teacher aides, adjustments to funding levels for the Ongoing and Reviewable Resourcing Schemes and Schools High Health Needs Fund (both for price and volume changes), settlements of related collective agreements, supplementary learning support and reducing challenging behaviour policies. Recently there has also been provision for the Positive Behaviour for Learning initiative.

Other significant changes to departmental funding include:

• Initiatives to increase the supply of teachers, address specific skill shortages and improve teacher capability.
• Provision of additional curriculum support material, including development of an electronic, Internet-based version of assessment tools, and development of assessment resources to align National Certificate of Educational Achievement standards with the curriculum and support the implementation of the National Standards.
• Improved administrative systems for the compulsory sector, including roll and funding information and electronic data transfer, improving sector capability and development of new education payroll systems and related advisory services.
• Ongoing implementation of new regulatory and funding systems for the early childhood education sector.
• Investment in Ministry infrastructure, including document management and web infrastructure.
• Reductions in expenditure on Ministry support functions from 2009/10, as well as realising efficiencies in information campaigns and focusing Ministry resources on a smaller number of support programmes.

Non-Departmental Outputs

Increases in non-departmental output expenses are principally owing to:

• Transfer of tertiary student achievement component funding from other expense appropriations from 1 January 2008, which accounts for the significant change in 2007/08 and 2008/09. Further transfers of enrolment-related funding (the top-slice) will occur from January 2011.
• Steady growth in the cost of school transport services.

Other notable changes include:

• Additional resources to support curriculum initiatives, including the laptops for teachers programme and software licensing and teacher professional development for the school and early childhood education sectors. These are partly offset from 2009/10 by ceasing or retargeting some development and support programmes that have been assessed as less efficient and effective.
• Growth in work-based education and training initiatives (for example, the Industry Training Fund, the Modern Apprenticeships and Gateway programmes) although partly offset by starting to phase out some programmes from 2009/10.
• Increases in operating funding for the Tertiary Education Commission to implement the tertiary sector reforms and a substantial reduction in funding from 2009/10 onward.

Benefits and Other Unrequited Expenses

Changes in benefit expenses are largely related to:

• Provision of tertiary doctoral and enterprise scholarships, and trainee medical intern grants up to 2008/09 but with a phase out of tertiary doctoral and enterprise scholarships from 2009/10.
• Initiatives to attract students to careers in teaching, including introduction of a voluntary bonding scheme for teachers in hard-to-staff areas or subjects from 2012. These have been partly offset by transfers of funding for teacher trainee scholarship payments to Vote Social Development.
• A steady rise in the number of national study awards available to existing teachers as a result of settlement of collective agreements and awards for top-performing teachers.
• Phasing out doctoral research and undergraduate international student scholarships and capping tertiary study abroad awards from 2009/10.

Non-Departmental Other Expenses

Other expense appropriations account for most funding under Vote Education. Changes in these appropriations mainly reflect a combination of:

• Roll-related increases in early childhood education sessional payments and school operations funding, as well as revised funding rates. Policy changes from 2010/11 will slow the rate of increase in early childhood education funding as well as support improved targeting to increase participation among Maori and Pasifika children and those in lower socio-economic areas.
• Implementation of the early childhood education strategic plan with provision for a new funding framework from April 2005, including access to 20 hours early childhood education from 2007.
• The impact of wage settlements for teachers and principals (including the flow-on of these costs to the early childhood education sector) and provision for improved staffing in schools.
• Increased funding for tertiary education and training programmes up to 2008/09 owing to a combination of increased numbers of tertiary students and increases in per-student funding, strategic assistance to tertiary education institutions to adjust to the new tertiary education environment and growth in targeted Performance Based Research Fund funding.
• However, as part of meeting commitments made against Budget 2009 the level of growth in tertiary education spending has been reduced (compared to that approved by the previous government). The impact of these reductions was spread across all tertiary education funding areas but with a particular focus on those increased in Budget 2008.
• From 2010/11 there is provision to maintain the volume of Equivalent Full-time Students (EFTS) and increase numbers of EFTS in some sectors as well as a one-off increase to the subsidy for EFTS places. These are offset by stopping or further reducing most capability funding pools.

Tertiary student achievement component funding was transferred to non-departmental output expenses from 1 January 2008. Other enrolment-related funding (the top-slice) will be transferred to outputs from 1 January 2011.

Non-Departmental Capital Expenditure

The major changes in non-departmental capital expenditure over the period relate to:

• Investment in tertiary education institutions, including assistance to institutions at financial risk, support for establishment of Centres of Research Excellence and support for public/private ventures under the Partnerships for Excellence facility.
• Consideration for the inadequate capitalisation of Wananga and provision for their future needs.
• Assistance for institutions to prepare for the new tertiary education environment envisaged by the Tertiary Education Strategy.
• The sale of core teacher housing stock to schools and disposal of other housing assets between 2004/05 and 2006/07.

Ministry Capital Expenditure

Most capital expenditure for the Ministry of Education is for the school property works programme. Movements between years relate to factors such as site purchases and construction of new schools required for roll growth, as well as general timing of projects. There is also growing expenditure on the Schools Network Upgrade Programme and broadband initiatives. From 2010/11 there is also increased focus on rectification work for defective buildings.

The apparent reduction in funding after 2010/11 is mainly owing to most capital injections being determined on an annual basis.

Revenue

Significant changes between years include recoveries from Crown entities and repayment of principal on loans to tertiary education institutions.

Part 1.4 - Reconciliation of Changes in Appropriation Structure#

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In 2010/11 the non-departmental other expense Tertiary Education Organisation Component - Capability Fund appropriation has been disestablished from 1 January 2011. Enrolment-based funding (the top-slice) has been transferred to non-departmental output expense Tertiary Education: Student Achievement Component. The balance of the Tertiary Education Institution Base Investment and other elements of the Capability Fund have been transferred to the Tertiary Education Grants and Other Funding appropriation.

Several appropriations have changed name in 2010/11 - Secondary School Examinations has become Secondary School Assessments; Tertiary and International Advisory Services has become International Education Programmes and Tertiary Education Organisation Component - Performance Based Research Fund has become Performance Based Research Fund.

Explanations of the reasons for changing the appropriation structure are noted in the details of each appropriation in Parts 2-6.

Part 2 - Details and Expected Performance for Output Expenses#

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Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

For further information on the intended impacts, outcomes and objectives of the departmental output expense appropriations please see the Statement of Intent for the Ministry of Education.

Interventions for Target Student Groups (M26)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The increase in appropriation for 2010/11 compared to 2009/10 is mainly owing to a combination of:

• increased provision for implementation of Positive Behaviour for Learning ($6.600 million increase)
• extension of the Ongoing and Reviewable Resourcing Schemes ($2.795 million increase)
• wage settlement for Special Education-funded teacher aides ($1.629 million increase)
• maintaining hours of Special Education Support Workers ($1.100 million increase)
• effect of settlement of Special Education Field Staff and Service Managers' collective agreements ($644,000 increase), and
• partly offset by reductions in general operating expenditure as agreed in Budget 2009 ($512,000 decrease).

Output Performance Measures and Standards

Current and Past Policy Initiatives

School Property Portfolio Management (M26)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The increase in the appropriation in 2010/11 compared to 2009/10 is mainly owing to a combination of:

• provision for a school property rationalisation programme ($25 million increase)
• additional costs - mainly capital charge and depreciation - related to the school property works programme, especially decisions from Budgets 2009 and 2010 ($22.421 million)
• the impact of Treaty of Waitangi settlements involving education sites including transfer costs and increased lease expenses ($12.225 million increase)
• increased costs related to managing the defective buildings programme ($10.400 million increase)
• increased costs related to disposal of surplus school properties ($2.400 million), and
• additional costs related to property investments for school staffing improvements ($1.786 million increase).

Output Performance Measures and Standards

Current and Past Policy Initiatives

Strategic Leadership in the Sector (M26)#

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Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Note 1 - An association of industries or groups established for the purposes of developing standards and processes, lobbying government or promoting the interests of the members.

Current and Past Policy Initiatives

Strategic Leadership in the Tertiary System (M68)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The decrease in the appropriation compared to the previous year is owing mainly to decisions from Budget 2009, including to eliminate two Counsellor positions for international education ($800,000), reduce policy advice expenditure ($239,000), and general operating expenditure ($107,000).

Output Performance Measures and Standards

Current and Past Policy Initiatives

Support and Resources for Education Providers (M26)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The increase in the appropriation for 2010/11 is mainly owing to a combination of

• ongoing work on replacement of the schools payroll project ($8.133 million increase)
• modifying early childhood education funding systems ($1.442 million increase)
• reductions in general operating expenditure as agreed in Budget 2009 ($836,000 decrease)
• reduced provision for the long-term work programme related to settlement of teacher collective agreements ($375,000 decrease), and
• one-off funding for actions to boost participation in early childhood education ($355,000 decrease).

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Note 1 - This initiative was originally appropriated under departmental output Support and Resources for Teachers.

Support and Resources for Teachers (M26)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The reduction in appropriation for 2010/11 is mainly owing to a combination of:

• rationalising resources and focussing on fewer support programmes as agreed in Budget 2009 ($2.800 million decrease)
• costs related to broadband initiatives and trial of the national education network ($1.264 million decrease)
• provision for development of assessment tools to support the National Standards ($1.680 million increase), and
• a contribution to the State Services Commission Identity Verification Service in 2009/10 only ($751,000 increase).

Output Performance Measures and Standards

Current and Past Policy Initiatives

Support and Resources for the Community (M26)#

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Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Current and Past Policy Initiatives

Part 2.2 - Non-Departmental Output Expenses#

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Intended Impacts, Outcomes and Objectives

Note 1 - For further information on the intended impacts, outcomes and objectives of the non-departmental output expense appropriation, please see the Statements of Intent Career Services and New Zealand Qualifications Authority.

Note 2 - For further information on the intended impacts, outcomes and objectives of the non-departmental output expense appropriations, please see the Statement of Intent New Zealand Qualifications Authority.

Note 3 - For further information on the intended impacts, outcomes and objectives of the non-departmental output expense appropriations, please see the Statement of Intent Tertiary Education Commission.

Centres of Research Excellence (M68)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in the appropriation is owing to full implementation of the Budget 2009 decision to remove small funds to reduce administration costs ($666,000) and different levels of funding between the two years agreed in the contracts with each centre ($408,000).

Output Performance Measures and Standards

Current and Past Policy Initiatives

Curriculum Support (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in the appropriation is mainly owing to a combination of:

• transfer of funding for Sport for Young Kiwis to non-departmental other expenses Primary Education and Secondary Education ($2.670 million decrease)
• reduction in Students At-risk Innovations Pool ($915,000 decrease)
• adjustment in professional development programmes reduced in Budget 2009 ($434,000 increase)
• continuing the Kiwi Can programme ($300,000 increase), and
• development of assessment tools to support the National Standards ($250,000 increase).

Output Performance Measures and Standards

Current and Past Policy Initiatives

Note 1 - This initiative was originally appropriated in non-departmental other expense Secondary Education.

Education Research Initiatives (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in the appropriation is owing to a higher level of reallocation toward a longitudinal study in 2010/11 ($150,000).

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

International Education Programmes (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in the appropriation is owing to the transfer of the Export Education Innovations Programme from non-departmental other expense Tertiary Education Grants and Other Funding ($217,000 increase).

The appropriation has been renamed this year from Tertiary and International Advisory Services (refer to Part 1.4 for details).

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Note 1 - This initiative was originally appropriated under non-departmental other expense Tertiary Education Grants and Other Funding.

Managing the Government's Investment in the Tertiary Education Sector (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in the appropriation is owing to a combination of:

• funding changes for the Supporting the Distinctive Contributions of the Institutes of Technology and Polytechnics Sub-sector initiative ($5.625 million decrease)
• reduced funding for development of an adult literacy and numeracy assessment tool ($2.265 million decrease)
• reducing the growth in funding for literacy, language and numeracy programmes from 2009/10 ($850,000 decrease)
• changes in operating funding related to streamlined services ($1.025 million increase), and
• changes in funding allocated for policy advice and leadership of the tertiary reforms ($1 million increase).

Output Performance Measures and Standards

Current and Past Policy Initiatives

Note 1 - Prior to 2008/09 these initiatives were originally appropriated under the non-departmental output appropriations Developing Strategic Coherence Across the Tertiary Sector, and Management of Grants and Contracts.

Ownership Monitoring of Tertiary Education Institutions (M68)#

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Scope of Appropriation

Expenses

Output Performance Measures and Standards

Current and Past Policy Initiatives

Note 1 - This initiative was originally appropriated under non-departmental output expense Developing Strategic Coherence Across the Tertiary Sector.

Professional Development and Support (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in the appropriation is mainly owing to a combination of:

• previous adjustments for funding the Mission-On initiative ($3.425 million decease)
• savings agreed in Budget 2009 from ceasing professional development programmes ($1.689 million decrease)
• decisions in Budget 2008 to reprioritise funding ($1.342 million decrease)
• changes in funding supporting literacy and numeracy in secondary schools ($1.210 million decrease)
• savings agreed in Budget 2009 from ceasing or re-targeting early childhood education professional development ($804,000 decrease)
• changes in the timing of support for boards of trustees ($663,000 decrease)
• additional support for school boards of trustees in implementing the National Standards ($1 million increase), and
• changes related to Te Kotahitanga and He Kakano programmes ($2.153 million increase).

Output Performance Measures and Standards

Current and Past Policy Initiatives

Provision of Information and Advisory Services (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in the appropriation is owing to the full-year effect of reducing curriculum support programmes in Budget 2009 ($375,000 decrease) and one-off funding in 2009/10 to boost participation in early childhood education ($260,000 decrease).

Output Performance Measures and Standards

Current and Past Policy Initiatives

Qualifications Support Structures (M26)#

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Scope of Appropriation

Expenses

Output Performance Measures and Standards

Current and Past Policy Initiatives

Quality Assurance (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in the appropriation is owing to a transfer to non-departmental output Secondary School Assessments ($2.720 million) and changes in funding for establishing an integrated quality assurance and monitoring framework to support the tertiary sector ($610,000).

Output Performance Measures and Standards

Current and Past Policy Initiatives

Note 1 - This initiative has been transferred to non-departmental output Secondary School Assessments from 2010/11.

Note 2 - These initiatives were originally appropriated under non-departmental output Stewardship of the New Zealand Qualifications System.

School Transport (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in the appropriation is mainly owing to the increased costs of daily services as a result of index-based adjustments to contract prices ($2.806 million).

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Secondary School Assessments (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in the appropriation is owing to a transfer from non-departmental output Quality Assurance from 2010/11 onward ($2.720 million) for moderation of internal assessment for the National Certificate of Educational Achievement.

This appropriation has been renamed this year from Secondary School Examinations (see Part 1.4 for details).

Output Performance Measures and Standards

Current and Past Policy Initiatives

Note 1 - This initiative was originally appropriated under non-departmental output Quality Assurance from 2010/11.

Service Academies (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in the appropriation is owing to the initiative starting part way through the previous financial year.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Supporting Parenting (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in the appropriation is owing to increased funding for the Early Childhood Parent Support Programme partly offset by reduction in funding for the Roots of Empathy initiative.

Output Performance Measures and Standards

Note 1

• 2010/11 Budget Standards - both Promoting Participation Project and Centre-based Parent Support and Development are under review. Current contracts expire by 30 June 2010. Specific decisions on new programme design will be made after the Budget, but 2010/11 performance levels are likely to be lower than for 2009/10 owing to implementation lead time and to greater targeting and more intensive support required.
• 2009/10 Budget Standards approximated the two-year contracted totals. The Estimated Actual Standards are estimates for 2009/10 only.

Current and Past Policy Initiatives

Tertiary Education and Training Policy Advice (M68)#

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Scope of Appropriation

Expenses

Output Performance Measures and Standards

Current and Past Policy Initiatives

Tertiary Education: Student Achievement Component (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in the appropriation is mainly owing to a combination of:

• simplifying the tertiary education funding system through a transfer from non-departmental other expense Tertiary Education Organisation Component - Capability Fund ($136.326 million increase) - see Part 1.4 for further details
• maintaining 2010 Equivalent Full-time Students baseline in the university and polytechnic sectors ($25.184 million increase)
• provision for a price increase to tuition subsidies ($20.953 million increase) effective from 2011
• provision for increased enrolments and costs as forecast when the new appropriation was established ($18.612 million increase)
• an increase in funding to meet tertiary sector cost pressures, including amendments from Budget 2009 ($15.900 million increase)
• increased provision for youth guarantee places ($11.381 million increase)
• withdrawal of student achievement component funding for regulatory compliance qualifications from 2011 as agreed in Budget 2009 ($3.094 million decrease), and
• funding transferred from previous financial years to maintain the current three-year funding envelope ($18.688 million decrease).

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Training for Designated Groups (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in the appropriation is mainly owing to a combination of:

• reductions in funding in 2009/10 only, as a result of lower than expected uptake in the industry training funding and modern apprenticeships programmes ($13.500 million increase)
• additional funding for increased growth and participation in industry training ($3 million increase)
• funding in 2009/10 only, for maintaining levels of targeted skills training ($2.973 million decrease)
• ceasing funding for the Skill Enhancement programme from 2010 ($2.154 million decrease), and
• phasing out the Nga Kaiarakati Pathfinders programme ($606,000 decrease).

Output Performance Measures and Standards

Note 1 - Standard training measure is the amount of training required for a trainee to achieve 120 National Qualifications Framework credits. Funding is based on the number of standard training measures provided by an industry training organisation in a calendar year.

Note 2 - Estimated actual number is the actual numbers for the year ended 31 December 2009.

Current and Past Policy Initiatives

Summary of Service Providers for Non-Departmental Outputs#

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The above table summarises funding to be allocated through Vote Education to non-departmental providers, along with an indication of the mechanism to be used for reporting actual performance and (where determined) the length of the funding commitment.

Part 3 - Details for Benefits and Other Unrequited Expenses#

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Part 3.2 - Non-Departmental Benefits and Other Unrequited Expenses

Intended Impacts, Outcomes and Objectives

Boarding Allowances and Bursaries (M26)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in appropriation is owing to one-off transfers to the Mapihi Pounamu appropriation in 2009/10 only.

Conditions on Use of Appropriation

Home Schooling Allowances (M26)#

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Scope of Appropriation

Expenses

Conditions on Use of Appropriation

Current and Past Policy Initiatives

International Student Scholarship Scheme (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in appropriation is mainly owing to Budget 2009 decisions to phase out undergraduate and doctoral research scholarships over several years.

Current and Past Policy Initiatives

Maori and Pacific Island Scholarships and Bursaries (M68)#

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Scope of Appropriation

Expenses

Current and Past Policy Initiatives

Mapihi Pounamu (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in appropriation is owing to one-off transfers from the Boarding Allowances and Bursaries appropriation to meet increased demand in 2009/10 only.

Conditions on Use of Appropriation

National Study Awards (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in appropriation is mainly owing to better targeting of teacher supply initiatives in the early childhood education sector ($2.500 million decrease) partly offset by the final tranche of the 2007/08 settlements of teachers' and principals' collective agreements ($253,000 increase) and the awards for top-performing teachers being fully implemented ($500,000 increase).

Current and Past Policy Initiatives

Queen Elizabeth II Study Awards (M68)#

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Scope of Appropriation

Expenses

Conditions on Use of Appropriation

Scholarships for Students to Attend Private Schools (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in the appropriation is owing to the planned growth in the number of scholarships to be awarded until the programme is fully implemented.

Current and Past Policy Initiatives

Study Abroad Awards (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in appropriation is mainly owing to the Budget 2009 decision to cap tertiary awards.

Current and Past Policy Initiatives

Targeted Education and Training Grants (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in appropriation is owing to the Budget 2009 decision to phase out the grants by 2011/12.

Current and Past Policy Initiatives

Teacher Trainee Scholarships (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in appropriation is mainly owing to:

• lower than expected demand for Teach NZ Scholarships during 2009/10 ($3.299 million), and
• changes between years in the level of funds transferred to Vote Social Development as part of decisions on the future administration of TeachNZ scholarships ($2.800 million).

Changes from 2011/12 reflect implementation of a voluntary bonding scheme for teachers in hard-to-staff areas or subjects.

Current and Past Policy Initiatives

Tertiary Scholarships (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in appropriation is mainly owing to a combination of continuing to phase out the Enterprise and Top Achiever Doctoral Scholarships programmes and reduce the growth in funding for literacy, language and numeracy programmes, both decisions made in Budget 2009.

Current and Past Policy Initiatives

Tertiary Teaching Awards (M68)#

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Scope of Appropriation

Expenses

United World Scholarships (M26)#

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Scope of Appropriation

Expenses

Part 5 - Details and Expected Results for Other Expenses#

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Part 5.2 - Non-Departmental Other Expenses

Intended Impacts, Outcomes and Objectives

Note 1 - For further information on the intended impacts, outcomes and objectives of the non-departmental other expense appropriation, please see the Statement of Intent New Zealand Teachers Council.

Note 2 - For further information on the intended impacts, outcomes and objectives of the non-departmental other expense appropriation, please see the Statement of Intent New Zealand Qualifications Authority.

Note 3 - For further information on the intended impacts, outcomes and objectives of the non-departmental other expense appropriations, please see the Statement of Intent Tertiary Education Commission.

Adult and Community Education (M68)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in the appropriation is mainly owing to:

• a reduction in Adult and Community Education funding for schools and community groups from 2010 ($3.431 million decrease) and tertiary education institutions from 2011 ($4.445 million decrease), and
• a reduction for other programmes in the community ($3.010 million decrease).

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Early Childhood Education (M26)#

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Scope of Appropriation

Expenses

Targeted funding includes targeted early childhood education (ECE) participation initiatives; equity funding for community-based early childhood education; Annual Top-up for Isolated Services for licensed rural services; Provisionally Registered Teachers Support Grant for provisionally registered teachers in teacher-led services; correspondence ECE; and funding for teacher supply initiatives.

Equity funding for the ECE sector was introduced in 2002 to provide additional support for community-based services. The equity funding components are weighted as follows:

• 50% of the fund toward low socio-economic communities
• 25% of the fund toward special education needs and non-English-speaking backgrounds
• 15% of the fund toward languages and cultures other than English, and
• 10% of the fund toward isolation.

Reasons for Change in Appropriation

The increase in appropriation for 2010/11 is mainly owing to a combination of:

• the impact of higher forecast numbers of children aged up to four years old, increased average weekly attendance and increasing participation rates ($72.404 million increase)
• increased funded child hour rates owing to inflation adjustments ($22.444 million increase)
• services moving up to higher, more expensive, funding bands as a result of a higher proportion of their teachers being registered ($20.981 million increase)
• a package of targeted initiatives to improve early childhood education participation ($10.400 million increase)
• removal of the highest funding bands effective from 1 February 2011 ($31.157 million decrease).

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Early Childhood Grants (M26)#

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Scope of Appropriation

Expenses

Expected Results

Current and Past Policy Initiatives

Integrated Schools Property (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in appropriation is mainly owing to the revaluation of school sector property in June 2009 ($2.676 million increase) partly offset by changes in the annual school property works programme ($328,000 decrease).

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Interest Subsidy for Schools (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in appropriation is owing to a combination of fewer schools receiving interest subsidies as their loans mature, and projected changes to average interest rates.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

New Zealand Teachers Council (M26)#

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Scope of Appropriation

Expenses

Performance Based Research Fund (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in the appropriation is mainly owing to a combination of:

• a difference in the phasing of expenditure between the years in the agreed funding profile from when this appropriation was first established in 2007/08 ($3.468 million increase)
• an incremental change in the basis of funding ($3.817 million increase), and
• transfers under the Budget Management Rules into 2009/10 only ($2.435 million decrease).

This appropriation has been renamed this year from Tertiary Education Organisation Component - Performance Based Research Fund (see Part 1.4 for details).

Expected Results

Note 1 - External research income is reported historically. The increase from 2007 to 2008 was 13%. The average annual increase between 2005 and 2008 was 10%.

This appropriation is intended to support increased quality of research and research-based teaching and learning and to provide incentives for improving investment in research in the tertiary sector.

Specific outcomes include:

• increased quality of research (as measured by the Quality Evaluation)
• increased research degree completions, and
• increased external research income generated by tertiary education organisations.

The quality of research is measured six-yearly through the Performance Based Research Fund Quality Evaluation.

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Primary Education (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in appropriation is mainly owing to a combination of:

• a difference in term dates between the financial years ($21.293 million increase)
• adjustment to schools' operations grant funding ($11.225 million increase)
• increases between years related to the settlement of teacher collective agreements ($9.803 million increase)
• provision for schools to retain unused staffing entitlements ($6 million increase), and
• support for students to meet literacy and numeracy standards ($4.500 million increase).

Expected Results

Current and Past Policy Initiatives

Remission of Fees (M26)#

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Scope of Appropriation

Expenses

School Transport (M26)#

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Scope of Appropriation

Expenses

Expected Results

Current and Past Policy Initiatives

Schooling Improvement (M26)#

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Scope of Appropriation

Expenses

Expected Results

Note 1 - In 2010/11 fewer schools are expected to be involved as work will be done more with individual schools instead of school clusters, and work is likely to be more intensive.

Note 2 - In 2010/11 work is expected to focus on individual schools instead of clusters of schools.

Current and Past Policy Initiatives

Secondary Education (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in appropriation is mainly owing to a combination of:

• a difference in term dates between the financial years ($19.580 million increase)
• adjustment to schools' operations grant funding, including from decisions in Budgets 2009 and 2010 ($12.561 million increase)
• provision for schools to retain unused staffing entitlements ($4 million increase)
• further funding for Kiwisport - to increase young people's participation in sport ($2.600 million increase)
• increased funding for The Correspondence School ($2.312 million increase), and
• the impact of quarterly roll counts for operations grants ($3 million decrease).

Expected Results

Current and Past Policy Initiatives

Special Needs Support (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in appropriation for 2010/11 is mainly owing to a combination of:

• an adjustment to operations grant funding ($2.174 million increase)
• increases in average teacher salaries rates ($2.111 million increase)
• a change in timing of school terms between financial years ($1.879 million increase), and
• reduced employer superannuation subsidy resulting from the redistribution of school-type expenditure across outputs ($927,000 decrease).

Expected Results

Current and Past Policy Initiatives

Note 1 - This initiative was originally appropriated under departmental output Interventions for Target Student Groups.

Note 2 - These initiatives were originally appropriated under non-departmental other expenses Primary Education and Secondary Education.

Tertiary Education Grants and Other Funding (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in the appropriation is mainly owing to a combination of:

• a technical change to accounting for Crown tertiary assets and depreciation ($51.037 million decrease)
• provision for tertiary providers to support students in on-campus summer employment in 2009/10 only ($4 million decrease)
• end of provision for building research capability in strategically relevant areas ($2.153 million decrease)
• removal of small funds to reduce administration and compliance costs in tertiary education ($953,000 decrease), and
• transfers of programmes from non-departmental other expense Tertiary Education Organisation Component - Capability Fund with effect from 1 January 2011 - see Part 1.4 for further details ($14.169 million increase).

Expected Results

This appropriation includes a broad range of particular funds with specific targeted impacts:

• Equity Loading - Loading on funding rates for Maori, Pasifika students and students with disabilities.
• National Centre for Tertiary Teaching Excellence - Funding to support research and dissemination of best practice of excellent teaching across the tertiary education sector.
• Special Education Special Supplementary Grants - Grants to promote, through one-to-one work with tutorial staff, the acquisition of knowledge and skills that will equip students with disabilities to take part in social and economic life in New Zealand. These grants are disestablished from 1 January 2011.
• Chair of Malay Studies Special Supplementary Grant - Annual grant to Victoria University of Wellington to support a Chair of Malay Studies to promote greater awareness and understanding in New Zealand of Malaysia and its peoples, including their language, culture, politics, geography and economy.
• Workbase Education Trust - Crown contribution.
• New Zealand School of Dance Grant - Crown contribution to teaching and learning.
• New Zealand School of Drama Grant - Crown contribution to teaching and learning.
• Literacy Projects - Capability development for organisations to deliver adult literacy programmes.
• Refugee Study Grants - Grants for refugees to undertake English for Speakers of Other Languages training. These grants are disestablished from 1 January 2011.
• Academic Migrant Grants - Study grants for migrants meeting certain skills and employment criteria. These grants are disestablished from 1 January 2011.
• Tertiary Education Institution Base Grants - Contribution to each university, wananga, institute of technology and polytechnic towards the costs of operating a council or board. These grants are disestablished from 1 January 2011.
• Institute of Technology and Polytechnics Business Links - Contestable funding to assist initiatives in institutes of technology and polytechnics to improve links with business. These grants are disestablished from 1 January 2011.
• Encouraging and Supporting Innovation - Contestable funding to promote innovation in the tertiary education sector.
• Industry Training Organisation Strategic Leadership Fund - Contestable funding to support industry training organisations in their industry leadership role, including the development of new qualifications at level 5 and above.
• Wananga Research Capability Fund - Funding to encourage and support academic research within the wananga sector, particularly within the area of wananga specialisation.
• Supporting Change - Funding to enhance the capability of tertiary education organisations to deliver high quality and relevant qualifications.
• Literacy, Language and Numeracy Capability - Enhancing the capability of providers to embed literacy, language and numeracy in Levels 1-3.

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Tertiary Education Organisation Component - Capability Fund (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in the appropriation is mainly owing to a combination of:

• simplifying the tertiary education funding system through a transfer to non-departmental output Tertiary Education: Student Achievement Component ($136.326 million decrease)
• savings from stopping various funds from 31 December 2010 or reducing others ($45.858 million decrease)
• impact of Budget 2009 decisions, including reducing universities' tripartite funding, having the Encouraging and Supporting Innovations fund from 2010, removing Priorities for Focus funding from universities from 2011 and amending consumer price index adjustments ($29.731 million decrease)
• transfers of residual programmes to non-departmental other expense Tertiary Education Grants and Other Funding with effect from 1 January 2011 ($14.169 million decrease)
• movement of funds between years to maintain the current funding envelope ($10.168 million decrease)
• funding transferred from capital appropriations in previous years ($10 million decrease)
• further investment to maintain per-student funding rates as participation increases and to support the distinctive contributions of the various sub-sectors ($7.527 million increase)
• a transfer to non-departmental output Tertiary Education: Student Achievement Component in 2009/10 for the wananga sector to respond to Job Summit initiatives and increased demand for student places ($5.211 million increase), and
• a difference in the phasing of expenditure between the years in the agreed funding profile when this appropriation was first established in 2007/08 ($1.951 million increase).

This appropriation will be disestablished from January 2011. The majority of the funding from the appropriation has been transferred to the non-departmental output Tertiary Education: Student Achievement Component. The balance of the funding has been transferred to non-departmental other expense Tertiary Education Grants and Other Funding. Refer to Part 1.4 for further information.

Expected Results

The following table provides further analysis on the expected expenditure by element within this appropriation.

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Note 1 - These initiatives relate to funding being transferred to non-departmental output Tertiary Education: Student Achievement Component from 1 January 2011.

Note 2 - These initiatives relate to funding being transferred to non-departmental other expense Tertiary Education Grants and Other Funding from 1 January 2011.

UNESCO (M26)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in the appropriation is owing to the impact of adverse exchange rate movements in 2009/10 only ($70,000 decrease).

University of Auckland Starpath Project (M68)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in the appropriation is owing to a delay in the timing of the balance of expenditure for the initiative until 2010/11.

Current and Past Policy Initiatives

Reporting Mechanisms#

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The above table indicates the mechanisms to be used for reporting actual performance for each non-departmental other expenses appropriation.

Part 6 - Details and Expected Results for Capital Expenditure#

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Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

Ministry of Education - Capital Expenditure PLA (M26)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The change in Land and in Property, Plant and Equipment purchases between 2009/10 and 2010/11 mainly reflects typical changes in the annual school sector property programme to meet the demands of schooling and demographic changes. Also included is rectification work on defective buildings.

Expected Results

Part 6.2 - Non-Departmental Capital Expenditure#

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Intended Impacts, Outcomes and Objectives

Property Disposal Incentives Scheme (M26)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The increase in appropriation is owing to the different levels of disposals planned between years.

Expected Results

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Quality Reinvestment Programme (M68)#

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Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The reduction in appropriation for 2010/11 reflects the timing of expenditure under the funding agreements with the tertiary education institutions.

Current and Past Policy Initiatives

Redevelopment of Whitireia Community Polytechnic Porirua Campus (M68)#

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Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The increase in appropriation in 2010/11 is owing to delays in timing of asset disposals upon which the capital injection is dependent.

Current and Past Policy Initiatives

School Support Project (M26)#

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Scope of Appropriation

Capital Expenditure

Schools Furniture and Equipment (M26)#

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Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The decrease in appropriation in 2010/11 is owing to different levels of expenditure on new schools, classroom replacement and other initiatives between the two years, mainly as a consequence of recent Budget initiatives.

Expected Results

Current and Past Policy Initiatives

Reporting Mechanisms#

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The above table indicates the mechanisms to be used for reporting actual results for each non-departmental capital expenditure appropriation.

Performance Information for Appropriations Vote Research, Science and Technology#

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MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Research, Science and Technology (M56)

ADMINISTERING DEPARTMENT: Ministry of Research, Science and Technology

MINISTER RESPONSIBLE FOR MINISTRY OF RESEARCH, SCIENCE AND TECHNOLOGY : Minister of Research, Science and Technology

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Minister of Research, Science and Technology is responsible for appropriations in Vote Research, Science and Technology (RST) of a total of $768 million, a net increase of $23 million, primarily related to the Government's economic agenda. The budget will commit an additional $306 million for the Government's economic agenda over four years, including new and reprioritised funding. Appropriations in the Vote RST for the 2010/11 financial year cover the following:

Departmental Appropriations

• Nearly $22 million (3% of the Vote) is principally for advice and contract management on RST that supports New Zealand's knowledge base, its capacity to innovate, to manage contracts and agreements within Vote RST and delivers on the outcome for science and technology transforming New Zealanders' wealth and wellbeing. Funds have been allocated for the cost impact associated with the amalgamation of the Ministry of Research Science and Technology with the Foundation for Research Science and Technology. Excluding the amalgamation cost impact, the departmental appropriation for MoRST represents 2% of the Vote.

Non-Departmental Appropriations

• In late 2009, the Government set priorities for Vote RST, to reflect its broader economic growth agenda. The science investment priorities are reflected in changes to individual appropriations. The previous appropriations had become numerous and complicated. The revised set of appropriations is more explicit about where the Government invests in research and what research outcomes are sought.
• Priority investment within science research outcomes is nearly $566 million (74% of the Vote) in 2010/11. These science investment priorities are high value manufacturing and services, biological industries, energy and minerals, hazards and infrastructure, environment, and health and society.
• Priorities that underpin a successful science system are nearly $164 million (21% of the Vote) in 2010/11. These priorities include access to modern national research facilities, international relationships, Vision Matauranga capability fund, Marsden Fund and fellowships.
• Total non-departmental Operational Funding will rise from $730 million in 2010/11 to $758 million by 2013/14.

Capital Appropriations

• A total of $16 million (2% of the Vote) has been allocated for capital investment through a Budget 2009 decision. The capital investment is for the continued operation of the Kiwi Advanced Research and Education Network (KAREN) which is managed by the Research Education Advanced Network New Zealand Limited (REANNZ).

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

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Research, science and technology (RST) transforms New Zealanders' wealth and wellbeing. RST has the responsibility for producing ideas and knowledge that drive innovation. Those ideas are taken up and applied, not just in commercial products that fuel economic growth, but throughout society by enhancing New Zealanders' health and lifestyle, and in understanding how to make the most of our natural resources and protect our environment.

Government Priorities and Outcomes - Links to Appropriations

The Government is committed to New Zealand science. Science plays a vital role in providing evidence for quality decision making, creating new knowledge to drive economic growth, while enriching our society. Government has a central role in ensuring that science delivers greater impact for New Zealand. The Government is the largest investor in RST within New Zealand and also owns key research capability in the form of the Crown research institutes (CRIs).

The Government is committed to lifting New Zealand's economic performance through RST. The most significant programme of improvements seen within the RST sector for the last 20 years has begun. Decisions made by the Government on science investment priorities will significantly change the RST sector. The changes made include an independent review on CRIs, and new initiatives to improve research and development performance within firms. Implementing the intent and detail of these decisions will be of significant focus for the Ministry.

Vote RST will focus on the following set of Government priorities:

Supporting the Economic Growth Agenda (EGA)

• Provide a simplified vote structure that identifies where money is going, and directs funding towards Government priorities.
• Focus is on science objectives rather than specific institutions. This will encourage collaboration among science teams and across the sector.
• Reduce contestability and aggregate the best science related to objectives. Ensure there are now entry points for new science. Focus will be on outcomes.
• Nurture talent by stronger international linkages and simple schemes that encourage talent across the Science sector.

CRI reform

• Make changes to the way that CRIs operate, how they are funded, and how their performance is managed.
• Create more value from the government investment in research, science and technology.

Business support and commercialisation

• Improve the relationships between science and business. Develop and maintain strong connections within the agricultural sector already exist and we need to replicate that strength within the high-value manufacturing and services sector.
• Make science capability more accessible to industry.
• Strengthen research networks between public and private sector.
• Pilot technology vouchers for firm innovation to encourage engagement between business and research organisations.

Role of the Ministry

Science investment priorities are aligned with the appropriations. The business and science sectors deliver on the science investment priorities with their performance arranged and monitored by the funding and investment agents. The Ministry manages the connection between the appropriations and the activity of the funding and investment agents. The appropriations have intermediate outcomes that contribute to the Government's priorities and objectives.

The leadership role provided to the science sector by the Ministry is to achieve its major outcome of science and technology improving New Zealanders' wealth and wellbeing. This role is reflected through the intermediate outcomes of:

• Government's priority areas are evident in RST investment decisions.
• A growing number of technology-intensive globally-competitive New Zealand firms.
• New Zealand's RST sector is able to readily access national research infrastructure facilities critical to strategic research outcomes.
• CRIs are well-positioned to deliver greater benefits to New Zealand.

The enduring nature of these intermediate outcomes is such that they are expected to be the focus of the new department arising from the amalgamation of the Ministry of Research, Science and Technology (MoRST) with the Foundation for Research, Science and Technology (FRST).

Objectives of the Vote

The Government's goal is to improve New Zealand's economic performance while continuing to strengthen our society and protect our environment. It follows that Vote RST will strengthen its focus to improve New Zealand's economic performance. Improvements in economic performance will happen directly through an increased focus on business research and development while indirectly linking public good research that improves social well-being, and the management of our natural resources to broader economic outcomes.

To achieve this goal a set of clear science investment priorities for the sector have been agreed. These six science investment priorities have been identified as high value manufacturing and services; biological industries; energy and minerals; hazards and infrastructure; environmental; and health and society. Additionally we foster the development of capability and international connections to support this science.

The new science investment priorities that have been agreed are aligned with the Government's economic growth agenda. A need for a strong science and technology base has been identified to achieve the expected higher levels of productivity and competitive advantage. Ideas and capability are to be found in New Zealand's universities, Crown research institutes and independent research providers.

The delivery of these priorities will be achieved through the following funding tools:

• Science-led contestable funding to support research, science and technology that develops capability, knowledge and applications to create new or transform existing industries and to generate economic, environmental or social benefits to New Zealand from opportunities created by research.
• Long term non-contestable funding that provides support to major large-scale, multidisciplinary, strategic research programmes that underpin New Zealand's economic, environmental and social wellbeing and to sustain the essential infrastructure assets that support research, science and technology in New Zealand.
• Business-led research and development has the objective to increase New Zealand businesses' investment in research and development to support increased productivity.
• Commercialisation and technology transfer that supports the objective to increase the benefit New Zealand derives from publicly funded research, science and technology outputs.
• Partnership funding to support sector or user groups and research organisation collaboration to provide for early and ongoing user engagement in research, science and technology. The engagement will lead to the development of successful commercial applications. These applications will encourage increased levels of private investment in New Zealand-based research, science and technology.
• Fellowships will fund fellowships for the purpose of supporting undergraduate, post-graduate and early career stage New Zealand Scientists, technologist and engineers to undertake research science and technology.

Management of the funding tools is provided through the funding and investment agents: Foundation for Research, Science and Technology (FRST), Health Research Council (HRC), Royal Society of New Zealand (RSNZ), and the New Zealand - United States Educational Foundation (Fulbright NZ).

Part 1.3 - Trends in the Vote#

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Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

Total Vote: All Appropriations

Significant changes in departmental and non-departmental appropriations in Vote Research, Science and Technology (Vote RST), are discussed briefly below.

Departmental Output Expenses - Multi-Class Output Appropriation

Departmental funding has increased by nearly $8.6 million from 2009/10 to 2010/11.

• Funding of $6.900 million for one-off costs associated with the amalgamation of the Ministry of Research Science and Technology and the Foundation for Research Science and Technology.
• New funding of $1 million has been established for a policy team to advise on Crown research institute performance and policy direction.
• $700,000 for the Cross Agency Research output class where a change in appropriation type from being a Non-Departmental Output Expense to a Departmental Output Expense has been agreed. This appropriation will enable departments to incur expenditure under Section 20 of the Public Finance Act 1989. The appropriation is limited to assist policy development for the achievement of Government priorities.

Non-Departmental Output Expenses

In December 2009 Cabinet decided on the new science investment priorities for the Government's investment in RST. These include priority areas for research outcomes, additional capabilities, and infrastructure priorities to meet the needs of a successful science system. RST investment focus has been altered to highlight the six areas where RST can make significant contribution to achieving the outcomes that are important to New Zealand. A need was also identified to attract and retain excellent researchers this will be achieved through both the Marsden Fund and Fellowship for Excellence. The Vision Matauranga Capability Fund is focused on the development of skilled people and organisations to undertake Vision Matauranga research.

Increased funding within Non-Departmental Output Expenses reflected the changes to the appropriation structure within Vote RST and new funding. These changes in appropriation allow the outcomes to align with the government's priorities as shown in Part 1.4 Reconciliation of Changes in Appropriation Structure.

Non-Departmental Other Expenses

The changes to the appropriation structure within Vote RST has realigned expenditure such as Technology New Zealand and the Pre-Seed Acclerator Fund into the new output classes established to reflect the new science investment priorities. This realignment has transferred funding to the Non-departmental output classes.

Reprioritisation and new funding supports the capability and infrastructure initiatives, particularly Science Collections and Infrastructure, and the development of international linkages through the new appropriation International Relationships.

The changes to Non-Departmental Other Expenses as a consequence of the decision to restructure the vote are shown in Part 1.4 Reconciliation of Changes in Appropriation.

Capital Expenditure

REANNZ will receive capital of $16 million in 2010/11 for KAREN that had been agreed as part of the 2009 Budget. KAREN provides essential infrastructure for research and education to allow New Zealand researchers to conduct research to international standards. The funding will maintain the operation of the KAREN network until 2013. There is an expectation that REANNZ is to be fully funded by user revenue from 2013/14.

Performance Improvement Actions

The key performance improvement actions to ensure the Government's priorities are achieved are listed below. These activities enable Vote RST to meet performance accountability requirements and establish whether programmes are operating as intended while delivering value for money, informing on future investment decisions or whether some adjustment is needed.

Research capability

• Build long-term core capability in sectors that underpin our economy, its sustainability and performance.
• A system based on excellence with impact that supports strong international partnerships.
• Changes that will reduce time, effort and duplication around proposals for funding, contract negotiations and reporting requirements, which will enable researchers to spend more time doing research.

Implementing the Government's response to the CRI Taskforce Report

• Clear and tailored missions for each CRI that set out their specific role, responsibilities and performance expectations in delivering national benefit.
• Appropriate funding mechanisms that balance long-term capability needs with shorter term dynamism.
• Strengthen CRIs accountability for delivery through appropriate governance and periodic whole-of-organisational review of both financial and non-financial performance.
• Improve CRI working relationships with other New Zealand research and education providers and particularly how they serve their appropriate business stakeholders.
• Ensuring CRIs are effectively internationally connected in their areas of responsibility.

Business support and commercialisation

• Encourage research and development in all sectors.
• Strengthen linkages between our firms and publicly funded research organisations.

Top talent

• Increase the research skill base in New Zealand and accelerating the development of our most talented younger researchers for increased productivity.
• Attract top people into our CRIs and universities. Extending that focus to the private sector by encouraging greater researcher mobility between the public and private sectors.

Part 1.4 - Reconciliation of Changes in Appropriation Structure#

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Explanations of the reasons for changing the appropriation structure are noted in the details of each appropriation in Parts 2-6.

Part 2 - Details and Expected Performance for Output Expenses#

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Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

Advice on Shaping the Science System MCOA (M56)

Scope of Appropriation

Explanation for Use of Multi-Class Output Expense Appropriation

Alignment of output class activity having common outcomes within one appropriation.

Expenses and Revenue

Reasons for Change in Appropriation

The movement between 2009/10 and 2010/11 reflects increases in funding by $7.960 million. This increase has arisen from:

• $1 million to establish a policy team to advise on Crown Research Institute performance and policy direction
• $6.900 million for the costs associated with the amalgamation of MoRST and FRST in 2010/11
• $60,000 was reduced in 2009/10 as a forecast change for tax on overseas entitlements.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Cross Agency Research (M56)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

As a part of the re-structuring of Vote RST, the Cross Agency Research output expense has been transferred to a Departmental output expense from a non-Departmental output expense. Savings were identified in the 2010 Budget Economic Fiscal Update which will result in this fund being disbanded by the end of the 2011/12 financial year.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives