F. Budget process

Departments should support government budget processes by:

• distributing budget round information (timetables, templates, etc) to entities
• working with entities to align entity planning and budget processes
• working with entities to understand, improve and critically assess proposals
• ranking bids against other bids from the sector on value-for-money criteria, and
• ensuring all successful bids are reflected in accountability documents (e.g. SOI, output agreements), after budget decisions are released to Crown entities.

The department is responsible for ensuring all proposals make a robust case for funding, are accurate, and comply with Treasury's Budget Circular¹⁶. Proposals should include a cost-benefit analysis¹⁷, and lay out how major benefits will be demonstrated. Entities should prioritise their own bids. All bids will be forwarded to the Minister for decision with advice from the department on their strengths, weaknesses and priority.

Funding proposals may be submitted outside budget rounds, but only for urgent matters. Out-of-budget proposals may count against the allocation in the next budget for the relevant Vote(s). They should not be processed unless they rank over competing bids likely to be presented in the next budget. Late funding requests can reflect poor planning or indicate capability risks in the entity that should be monitored.

All requests for increases in compulsory levies, fees and charges should be presented to the Minister well ahead of the proposed implementation date. Like budget bids, departments should work with entities to improve requests for levy increases, but assess them critically. The Minister should be advised on whether costs can be absorbed, why the levy represents value to levy payers, how consultation with those affected by the change will be managed, and any risks arising from the increase.

These responsibilities do not displace the department's vote administration roles of:

• providing budget and budget update coordination and quality assurance
• preparing the estimates and other information supporting the budget
• documentation, e.g. of outputs plans showing how resources will be used
• reporting on expenses and capital expenditure against appropriations, and
• advising the Minister on financial and non-financial performance.

16 Available at http://www.treasury.govt.nz/budgetprocessguide/

17 The extent or depth of the analysis should reflect the cost, impacts and risks of the proposal.