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


Professional services are services provided by a person (or persons) skilled in the particular field for which they are engaged.

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


Expenditure for professional services

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

Professional services are integral to an activity approved under s20 of the LTMA. For Waka Kotahi funding purposes, these are treated as an input, and the cost is charged directly to the activity. 


  • Procurement, funding approval and claiming

    Expenditure on in-house professional services is exempt from procurement procedure requirements where approved by Waka Kotahi (planning and investment).

    Outsourced professional services must be procured using an approved procurement procedure. 

    The cost of all activities advised to Waka Kotahi, 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 professional services costs, regardless of whether the cost is an in-house cost or incurred through a contract with an external supplier.

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Examples of professional services


  • Examples of professional services

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

    • 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 the Transport Agency, 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
    • preparing contracts and evaluating tenders for works and services
    • investigating and resolving public enquiries related to activity planning, investigation, design and delivery
    • evaluating proposed activities including data collection, outcome evaluation, assessment of risks, submission of activity-specific information to the Transport Agency
    • gathering information for activity management systems
    • investigating activities for inclusion in regional land transport plans (RLTPs)
    • gathering / managing asset and service condition information
    • consulting with affected parties
    • managing contracts
    • managing activity delivery
    • managing Total Mobility services and Total Mobility users
    • managing activities with community groups
    • obtaining building and resource consents
    • preparing plans and strategies for the management of activities or assets, safety, the environment, projects, customer education, etc
    • reporting on project feasibility, project development, contract performance, asset management systems, asset service condition, public transport services and service performance, etc.
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Approval to claim funding assistance

Approved organisations and Waka Kotahi (state highways) must have specific approval from Waka Kotahi to include the cost of in-house professional services in the cost of approved activities when requesting or claiming funding assistance for those activities.

The conditions discussed below under Accounting for the cost must be met.


  • Obtaining and retaining approval

    To obtain and retain that approval, approved organisations and Waka Kotahi (state highways) must address how professional services are to be procured, including which services (if any) are to be obtained in-house, in their Waka Kotahi endorsed long-term programme wide procurement strategy. The requirement to develop and document a strategic approach to procurement is set out comprehensively in the Procurement manual.

    Applications for approval to obtain professional services in-house are to be made to Waka Kotahi.

    When a procurement strategy is amended in a way that has a significant material impact on the scope, scale or manner of delivery of professional services obtained in-house then the change must be brought to the attention of Waka Kotahi. Approval to continue to obtain professional services in-house will need to be confirmed.

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In-house delivery

All approved organisations and Waka Kotahi (state highways) must have a formal, documented management structure for in-house services operations. Typically a single management structure will apply to both in-house professional services and administration.


  • Requirements

    Waka Kotahi requires all approved organisations and Waka Kotahi (state highways) to manage their in-house service delivery in a way that ensures both efficiency and effectiveness. Waka Kotahi does not, and will not, specify how approved organisations and Waka Kotahi (state highways) should structure or organise themselves to do that, but it expects these organisations to be guided by the Standards NZ publication, Guide to Local Government Service Delivery Options(external link) (SNZ HB 9213:2003).

    In-house professional services staff and assets will typically be part of a department or semi-autonomous business unit.

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  • Exclusions

     In-house professional services cannot be delivered through either a council-controlled organisation (CCO) or a council-controlled trading organisation (CCTO). Neither are considered to be ‘in-house’. Where professional services are procured from either a CCO or a CCTO those services must be treated as being outsourced and procured in accordance with a Waka Kotahi approved procurement procedure.

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Accounting for the cost of services

Waka Kotahi expects approved organisations and Waka Kotahi (state highways) to account for in-house services costs in a manner that is reasonable and appropriate for a public sector entity. 


  • Requirement of a documented methodology

    All approved organisations and Waka Kotahi (state highways) must have a documented methodology covering how costs for in-house services, including associated overheads and administration, are to be determined and allocated to work categories and, where appropriate, to individual approved activities. The method of allocating costs, including overheads, must be consistent with recognised management accounting practices.

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


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  • Time-based costs

    The cost of professional services will in many instances be time based. approved organisations and Waka Kotahi (state highways) will need to have a rational, well documented and consistent method for attributing time based costs to approved activities.

    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 approved 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. There will be no need, for the Transport Agency’s purposes, to distinguish professional services time from time spent on administrative tasks.

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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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