Obligations of those using NLTF funds

Introduction

This section sets out the obligations of those using National Land Transport Fund (NLTF The fund established under section 10 of the LTMA ) funds.

NZTA Planning & Investment Principles

All decisions and actions involving the use of NLTF The fund established under section 10 of the LTMA funds are to be made by applying the NZTA Planning and Investment Principles.

These set out requirements, expectations and guidance for NZTA and Approved Organisation staff in exercising their planning and investment functions in the use of NLTF The fund established under section 10 of the LTMA funds.

Exercising delegations

Those making decisions under delegation shall ensure that they meet NZTA expectations for exercising delegations, detailed in the delegations summary

Delivery as approved

Where NLTF The fund established under section 10 of the LTMA funds have been approved against an activity or combination of activities the NZTA expects that all organisations will deliver to the annual cash-flow plan approved as part of the funding approval.

Claiming for work completed

In the delivery of approved activities, all Approved Organisations will claim promptly and regularly for any work completed. The NZTA acknowledges that the seasonal pattern of some work will impact the timing of some claims. However, claiming behaviour that results in substantially higher, "catch-up" claims for the last month of the financial year is viewed as unacceptable by the NZTA.

There are benefits to both Approved Organisations and the NZTA from prompt and regular claiming, being:

• for the Approved Organisation - more efficient use of ratepayer/ debt funding through sensible cashflow management practice,
• for the NZTA - less uncertainty around the year end position and full utilisation of funding with a reduced need for a large risk cash-flow buffer.

Claims can be made on an accrual basis as work is completed, i.e. there is no need for Approved Organisations to hold off making claims until they receive their supplier invoices. See Compile claim and submit in TIO for further information.

Monitoring of progress

All organisations are required to regularly monitor their progress against approved projects and programmes.

Forecasting

All organisations are expected to forecast the timing and size of their claims or funding requirements.

Getting into a habit of robust forecasting is vital as:

• for the organisation, it is a fundamental part of its management of forward funding requirements from rate-payers, the NZTA  and other sources,
• for the NZTA, it is critical to its debt and cashflow management.

Approved Organisations are required to provide forecasts through Transport Investment Online (TIO The NZTA's web-based funding allocation system. ) Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. Monitor each quarter of when they expect to make claims and the size of those claims.

The NZTA(state highways) is required to provide monthly forecasts on expected activity class expenditure and property revenue.

Prompt requests for variations

Monitoring of progress and forecasting of claims should provide all organisations with a view of the need to apply for a variation of their projects/programmes through cost scope and cashflow adjustments.

Organisations must inform their NZTA Planning & Investment representative as soon as they are aware of the need for any cost scope or cash flow adjustment. This includes the release of any surplus funds that are not required to deliver the planned activity or activities.

Some organisations may be reluctant to forecast or declare surplus funds as they may need them later should the cost of the approved activity be higher than their latest forecast. The NZTA commits that, where an organisation declares surplus funds and later finds that it requires some or all of those funds to deliver its approved activity or activities, that organisation will have first call on available NLTF The fund established under section 10 of the LTMA funds to enable it to complete delivery.