- Title page
- 1: Relationships, roles and responsibilities
- 2 : Appointing and maintaining an effective board
- 3: Participating in setting the expectations and direction for entities
- 4: How can your monitoring department assist you?
- Appendix 1: How Crown entities fit into the public sector
- Appendix 2: Information for Crown entity companies
Ensuring financially responsible management
Crown entities are required to 'operate in a financially responsible manner'.40 They must:
- manage their assets and liabilities prudently
- endeavour to ensure their long-term viability, and
- act as a successful going concern.41
This requires that:
- the Board maintain oversight of the entity and its cost drivers, and re-prioritise activities to make the most of the expenditure available
- any application to adjust statutory fees or levies is made early enough to be completed in time for the adjustment to apply from the intended date, and
- any requests for additional operating funding or a capital injection from the Crown are fully specified, clear about trade-offs, and submitted as per the Budget timetable.
To help ensure all Crown entity funding issues are appropriately managed, you can ask the monitoring department to:
- advise on the efficiency and effectiveness of Crown entity spending
- critically assess proposals for new money or adjustment to fees and levies
- distribute Budget-round information to Crown entities (timetables, templates, Budget decisions that relate specifically to the entity, etc.) and rank bids for additional funding against other bids from the sector, and
- ensure funding decisions are reflected in accountability documents.
As the responsible Minister, you may be involved in an examination of the Estimates. The Estimates are the government's request for appropriations/authorisation for the allocation of resources and are tabled on Budget day. Crown entities do not attend Select Committees when they examine the Estimates, but you and the monitoring department may be questioned about the intended activities and expenditure of an entity that receives funding from appropriations.
40: Section 51 applies the requirement for financial responsibility to statutory entities.
41: A 'going concern' is a business or entity that continues to exist long enough to carry out its objectives and commitments without the threat of liquidation for the foreseeable future.