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Stage 1: What to do before registering a CFA Variation

Updated 23 September 2021.

If you are a Variation Owner, this Guide for Preparing CFA Variations contains all the information you need to create and manage a CFA variation.

DHB Negotiations

Failure to begin negotiations early can lead to many delays in the process, difficulty in managing relationships, and may hold up funding release.

  • Non-binding discussions should be held between the Ministry and the DHBs to agree the terms of the variations before submitting your draft document to the CFA Coordinator. Agreement on service requirements, payment schedules, and reporting requirements are most important, as these are the areas that are most likely to cause delays or require amendments before a DHB will accept a CFA Variation.
  • Guarantees should only be given by a person with the authority to do so (eg, Group Manager or National Director).

Seek Internal Advice

It may be helpful to seek advice on payment, service specifications, purchase unit codes, and/or reporting requirements early on in the drafting process.

Payment Methods

There are two methods of payment through CFA Variations: automatic monthly payments (added to the DHB's monthly cash profile) and direct invoicing.

  1. Schedule B Payments: The DHB will receive automatic payments of 1/12 of the total yearly funding allocation each month.
  2. Direct Invoicing: Payment on invoice is the responsibility of the Directorate that is authorised to provide the allocated funding. This involves additional work for the Directorate, which is not required with the Schedule B payments. The DHB will send an invoice to a nominated person within the Directorate, who has authority to approve funds. On approval, the invoice is paid to the DHB by a person with the authority to do so. If you require or prefer more structure around invoicing and do not wish to make payments through Schedule B, then you should consider direct contracting through Sector Services.

Service Specifications

Service requirements must be specified

The service requirements must be clearly defined and described in the CFA variation schedule for the Ministry to be able to monitor service performance and  that service delivery is satisfactory and compliant with the service requirements being funded.

Planning for the end of the CFA variation term and devolving funding

  • Six months before the end of the term of the CFA variation (the date when the funding will be fully devolved to the DHBs) the service(s) in the CFA variation needs to be added to the list of DHB funded services in the CFA‘s service coverage schedule as part of the DHBs annual planning package update.
  • If national consistency for a minimum level of the service is required to be funded by DHBs in future, a nationwide service specification will be needed to be developed with the DHBs. This nationwide service specification must be agreed with the DHB GMs Planning and Funding for them to use when purchasing the service and will be published on the NSFL website.
  • Both updating the CFA service coverage schedule and the development of a nationwide service specification and any performance monitoring reporting completes the DHB accountability for the devolved funding for that service.  

For information about service coverage schedule updates and nationwide service specifications contact the Ministry’s Planning and Accountability Team.

For advice on the actual funding calculation and devolution process contact the Ministry’s DHB Funding Team.

Purchase Unit Codes

Purchase unit codes (purchase units) are required in CFA Variations. Current purchase units are available the Purchase Unit Data Dictionary. If you require a new purchase unit, contact the Purchase Unit Coordinator once you have completed the service specifications/service requirements.

Reporting Requirements

Ministry policy requires limitations of DHB reporting requirements to certification/exception reporting, and all variation reporting must be run through the DHB Quarterly Reporting Database.

Purchase Board Approval

Each directorate has a Purchase Board to approve directorate spending. You need to obtain and submit the appropriate funding approval before your variation can be registered into the CFA Tracking Database. This should be organised as early as possible to avoid unnecessary delays. This is exempted if your CFA Variation does not contain a funding component.

Business Case

A simple Business Case (see the Business Case Template) is required before your variation can be registered into the CFA Tracking Database. A health report or Cabinet paper that addresses the minimum components within the template is acceptable.

Variation Register

The CFA Variation Register Form contains the information required to create a database link for a CFA Variation. This should be completed and emailed to the CFA Coordinator, with the Purchase Board Approval and Business Case (or equivalents).