Premier & Cabinet

Type:
Department of Premier and Cabinet Circular
Identifier:
C2012-07
Status:
Archived

C2012-07 Cabinet Standing Committee on Expenditure Review - Procedures and Operational Rules - 2012

Detailed Outline

Keypoints

  • Cabinet has agreed to Procedures and Operational Rules for the Cabinet Standing Committee on Expenditure Review in 2012.
  • The role of the Cabinet Standing Committee on Expenditure Review (Expenditure Review Committee or ERC) is to assist Cabinet and the Treasurer in:
    • framing the fiscal strategy and the Budget for Cabinet‘s consideration;
    • driving expenditure controls within agencies and monitoring financial performance;
    • considering proposals with financial implications brought forward by Ministers; and
    • monitoring the implementation of relevant recommendations of the Commission of Audit.
  • The key points below are to assist agencies to prepare submissions for ERC’s consideration.

Cabinet has agreed to Procedures and Operational Rules for the Cabinet Standing Committee on Expenditure Review (ERC) in 2012.

This Circular is a summary of the approved rules.

Role of the ERC

The role of the ERC is to assist Cabinet and the Treasurer in:

  • framing the fiscal strategy and the Budget for Cabinet‘s consideration;
  • driving expenditure controls within agencies and monitoring financial performance;
  • considering proposals with financial implications brought forward by Ministers; and
  • monitoring the implementation of relevant recommendations of the Commission of Audit.

ERC is generally the only committee of Cabinet that can recommend any new spending or revenue proposals to Cabinet.

All spending, revenue or tax expenditure proposals by Ministers must be considered by ERC prior to final Cabinet approval unless otherwise agreed by the Premier, Deputy Premier and Treasurer.

Funding Decisions

Generally all funding decisions for recurrent and capital proposals, including new proposals, should be considered in the Budget process by ERC.

If a proposal is submitted for consideration outside the Budget process, the Minister must demonstrate to the ERC Chair (copied to the Premier) that the proposal is:

  • unavoidable;
  • unforeseeable;
  • genuinely urgent and cannot be considered in the Budget process; and
  • cannot be accommodated within existing resources.

Ministers must copy any correspondence with the Premier concerning matters with financial implications to the Treasurer and provide sufficient time for analysis prior to any decision being required.

A new proposal is considered to be one that will have certain or potential financial impact on existing estimates within the forward estimates period or beyond. A new proposal must be fully offset by savings or involve movement of funds between years or within the Cluster. Savings must represent genuine savings to the Budget.

ERC Minutes and Papers

Minutes and papers must be lodged at least 5 business days before a scheduled meeting.

The relevant Coordinating Minister is to submit the Minute in consultation with the portfolio Minister(s) as required. Minutes should be prepared in consultation with Treasury and other central agencies as well as other affected agencies.

Recurrent and capital proposals must comply with the appropriate business case requirements. In addition, capital proposals must comply with Total Asset Management policy as well as Procurement policy.

All proposals and offsetting savings must be fully costed and verified by Treasury using an agreed costing methodology before consideration by ERC. The costing methodology is to be agreed between the agency and Treasury and include the financial implications for other portfolios. If there is no agreement, then the proposal will not be considered by ERC. Verification of costings by Treasury does not imply that Treasury or the Treasurer endorse a proposal.

All proposals are to be identified as ongoing or for a finite period. No funding for a proposal with a finite life will be included in the forward estimates beyond the approved funding period. All new proposals will provide for a review date and outline a performance review and monitoring framework. Where proposed new expenditure is ongoing, the duration of the offsetting savings must also be described.

All proposals should identify risks, including an estimate of the market value of the risk and the likelihood and consequence of the risk occurring.

Proposals that affect other agencies must include details of the consultation that has occurred with those agencies. Cross portfolio proposals must include the impact on each agency and contain agreed costs for all agencies as well as the agreement of affected Ministers.

There should be no presumption that all items submitted by Ministers will be considered by ERC.

Minutes that do not comply with these rules will not be accepted by the Cabinet Secretariat.

Chris Eccles
Director General

Which agencies does this Circular apply to?
All public sector agencies other than State Owned Corporations. This includes all agencies and employees in the Government Service (Public Service Departments, Non-Public Service Divisions and Special Employment Divisions), the Teaching Service, NSW Police and the NSW Health Service.

Who needs to know about this Circular?
Officers involved in the preparation of matters for the consideration of the Cabinet Standing Committee on Expenditure Review.

Further information
Tim Hurst, Executive Director, Department of Premier and Cabinet, 9228 5493.

Issued by
Matthew Clark, Senior Policy Officer, Department of Premier and Cabinet
Contact
9228-4843, [email protected]
Date
8 March 2012
 
This Circular has not superseded any Circular.

Overview

Compliance

Not Mandatory

AR Details

Date Issued
Mar 8, 2012
Review Date
Jun 13, 2024
Replaces
Replaced By

Contacts

Contact
Contact us
Phone
02 9228 5555
Publishing Entity
Department of Premier and Cabinet
Issuing Entity
Department of Premier and Cabinet