These guidelines outline the important financial management lessons identif...Read more
The Canterbury Earthquake Recovery Authority (CERA) was not the only central government funder of the recovery effort. However, as the lead recovery agency, it kept a broad perspective over the various funding instruments and budget appropriations required to pay for recovery.
The checklist below highlights important financial management lessons identified across CERA's five-year existence. Chief Financial Officers (CFOs) or finance managers working in a disaster recovery environment may wish to take them into account.
Disaster recovery: Checklist for finance managers
The Public Finance Act 1989 is the foundation of New Zealand's public finance system. The Chief Financial Officer should understand the Act's specific requirements for public sector financial management that overlie the day-to-day financial operations of a department.
Staff your finance team with experts who understand public finance and bespoke funding instruments (such as the indemnity for local government).
A close day-to-day working relationship with the Treasury is critical for smooth financial management and for tackling the knotty issues.
Adapting to normal budget processes can be difficult for a disaster recovery agency. Forecasting of costs in a fast-paced recovery environment where policy decisions are made quickly or deferred will be especially difficult for the finance team.
Getting the right appropriation structures in place is important. Inflexible appropriation structures can result in unappropriated expenditure and project delays.
If you cannot appropriate the quantum of funding ahead of time, you must establish more flexible appropriation structures to avoid appropriation breaches.
A recovery situation can create highly complex accounting questions. Be prepared for technical accounting issues that may not have a right answer.
Business processes used in the emergency response period may not necessarily be the quickest or cheapest in the subsequent recovery period.
The project delivery and finance teams need to maintain a close working relationship. Ideally they should be co-located.
Many of the people involved in disaster recovery may have suffered trauma both to themselves or family friends. Their rationale and speed of work may be effected. Be aware and allow for that.
The CFO needs to be part of the conversations around business case strategy and finding the right balance between speed and due diligence.
The CFO will need to educate leaders across the organisation on the accounting implications and fiscal trade-offs associated with owning versus divesting.
Broken Link? Let us know