NSW Treasury has published a new Carry Forward Policy to reduce the number of times an Agency can carry expenditures forward each year to two.
Releasing the new Treasury Policy and Guidelines TPG22-05 Carry Forward Policy, Treasury said it replaced TC15/08 and tightened the Carry Forward categories.
“The Carry Forward Policy sets out the circumstances in which Agencies may be permitted to transfer Budget Control Limits from the current financial year to future financial years,” Treasury said.
It said the objectives of the new Carry Forward Policy were to: Support effective resource allocation; Avoid inefficient expenditure; Encourage improved budget forecasting: and support forecasting accuracy.
It said the policy would also help manage potential risks to budget aggregates from accumulating carry forwards over time.
“International best practice shows that a well-designed carry forward policy encourages value for money and improves resource allocation,” Treasury said.
“Carry forwards should be sought and used for the purpose in which the original funding was provided.”
It said carry forward requests must not be used to fund new policy proposals or for activities that will lead to additional ongoing future costs.
“Treasury will consider Agencies’ carry forward requests and entitlement against the level of expenditure in the current year,” it said.
“Agencies with a net overspend over and above their approved Budget in the current year are unlikely to be entitled to carry forward items.”
It said however that where a carry forward request was due to factors outside an Agency’s control, “Treasury will generally recommend these requests for approval.”
Treasury said that factors considered to be outside an Agency’s control included natural disasters, adverse weather conditions, protracted legal cases and delays in sourcing raw materials.
“Timing adjustments caused by factors within Agency control such as recruitment challenges, changes to project scope or delays in establishing project capabilities, will be assessed on merit and may not be supported.”
The new 10-page Carry Forward Policy can be accessed at this PS News link.
