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Archive - this information is for reference only and no longer maintained.

This page relates to the 2018-21 National Land Transport Programme.


This section defines administration costs and provides examples, advice and links to useful resources for the approval, delivery and accounting for these costs.

Expenditure on administration

The following information relates to land transport activities that Waka Kotahi NZ Transport Agency funds. They may not be relevant in any other context.

Administration is not integral to a project or activity that has been funded by Waka Kotahi but, nevertheless, must be provided by an approved organisation and Waka Kotahi (for national programmes and state highway activities) to support the delivery of activities.

The cost of administration is an overhead cost incurred in the delivery of activities.


  • Procurement, funding approval and claiming

    Expenditure on administration is exempt from procurement procedure requirements regardless of whether it is outsourced or undertaken in-house.

    The cost of all activities advised to Waka Kotahi (planning and investment), either when applying for funding approval or when claiming funding assistance for an approved activity, must be the full cost of the activity, including any administration costs, regardless of whether the cost is an in-house cost or incurred through a contract with an external supplier.

    For the 2015-18 National Land Transport Programme (NLTP) onwards, fair and reasonable administration costs are to be included in the total cost for approval when making a application for inclusion in the NLTP and for funding assistance. The previous practice of Waka Kotahi adding an percentage for administration to application costs and claims ceased at the end of the 2012-15 NLTP.

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Examples of administration services


  • Examples of administration services

    The following are examples of cost or services that will commonly be classified as administration:

    • approving, administering and monitoring activity management plans, policy and standards, risk and levels of service
    • managing a land transport disbursement account
    • preparing and administering funding assistance claims, long-term plans (LTPs), annual plans, longer-term programmes, and communications plans and strategies
    • administering a supplier pre-qualification system
    • reporting and providing data and information to Waka Kotahi, Audit NZ, etc.
    • undertaking financial processes, management accounting and reporting
    • developing and operating land transport business support systems
    • servicing democracy, including providing customer/ratepayer interface 
    • meeting statutory responsibilities, including audit fees and tax advice fees.
    • the cost of owning management systems and databases.
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Approval to claim funding assistance for administration

A standing approval is in place for all approved organisations and Waka Kotahi (national programmes and state highways) to include the cost of administration in the cost of approved activities when claiming funding assistance for those activities, providing the conditions discussed under accounting for the cost are met.

Delivery of administration

Waka Kotahi requires all approved organisations and Waka Kotahi (national programmes and state highways) to manage their delivery in a way that ensures both efficiency and effectiveness.

Waka Kotahi (planning and Investment) does not, and will not, specify how these organisations should structure or organise themselves to do that, but it expects them to be guided by the Standards NZ publication, Guide to Local Government Service Delivery Options(external link) (SNZ HB 9213:2003).

Accounting for the cost of administration

Waka Kotahi (planning and investment) expects approved organisations and Waka Kotahi (national programmes and state highways) to account for administration in a manner that is reasonable and appropriate for a public sector entity. 


  • Allocation to activities or work categories

     Administration as defined here is an overhead cost and not a direct cost to any approved activity. The cost of administration, including the cost of associated overheads, that make up the full cost of delivering approved activities will therefore be accumulated for a defined period and then systematically allocated to activities or work categories. 

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  • Requirement of a documented methodology

    All approved organisations and Waka Kotahi (national programmes and state highways) must have a documented methodology covering how costs for overheads and administration are to be determined and allocated to work categories. The method of allocating overheads must be consistent with recognised management accounting practices.

    Approved organisations and Waka Kotahi (national programmes and state highways) must make documentation of their management accounting methods, plus accounting source documents and records, available to Waka Kotahi (planning and investment) on request for audit purposes.

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  • Time-based costs

    For some in-house staff a system for attributing time-based costs will be used to separate administration ‘time’ from professional services ‘time’. Where staff members also work on tasks that are not related to approved activities, for example tasks related to what organisations often refer to as the ‘unsubsidised programme’, then a time-based cost recording system should be used to separate out these costs.

    Time-based overhead costs may sometimes be treated as a direct cost to an approved activity for the purposes of establishing the funding assistance claim cost. For example an in-house staff member employed exclusively on a large project may devote time to both professional services and time to administrative tasks. Both will be a direct cost to the project and there will be no need, for Waka Kotahi purposes, to distinguish professional services time from time spent on administrative tasks. Other staff may have a full-time administrative role on a project and the full cost of their time should similarly be considered a direct cost to the project. 


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  • Other overhead costs

    Other overhead costs may also be a treated as direct cost to an activity or work category. For example an annual licence fee for specialist software, used exclusively to aid staff working on a single work category, would be a direct cost that should be charged to that work category.

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