Output expense 3

Services to process obligations and entitlements

Description

This output expense provides services that contribute to the availability of revenue to fund government programmes, as well as ensuring that taxpayers and other customers receive payments they are entitled to, including tax refunds. This is achieved through services designed to achieve timely, efficient and effective assessment and processing of:

tax payments, rebates and refunds for taxpayers, and
entitlements for social support programmes.

Activities undertaken:

registering taxpayers
making tax assessments
banking tax payments and making refunds
processing applications and payments for social support programmes
supplying information to other government agencies
accounting and reporting the collection of Crown revenue.

Financial performance for the year ended 30 June 2007 (GST-exclusive) $000

Revenue	Expenses	Net surplus/(deficit)
84,818	84,252	566

Output 3.1 Registrations, applications and assessments

Description

This output involves processing all registrations, applications and assessments for the tax and social support programmes we administer.

Performance measures

	Budget	Actual
Timeliness
We will issue:
at least 80% of income tax assessments within 6 weeks of receipt, except during August and March when we will issue at least 80% within 7 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets)	80%	86.7% (elec: 93.0%)
at least 100% of income tax assessments within 10 weeks of receipt, except during August and March when we will issue at least 100% within 11 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets).	100%	91.7%^[14] (elec: 96.0%)
We will issue:
at least 95% of FBT and GST assessments within 3 weeks of receipt, except during May when we will issue at least 95% within 4 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets)	95%	98.9% (elec: 99.5%)
at least 100% of FBT and GST assessments within 6 weeks of receipt, except during May when we will issue at least 100% within 7 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets).	100%	99.7% (elec: 99.9%)
We will process 100% of employer monthly schedules prior to generating the next monthly schedule.	100%	45.9%^[15]
We will issue child support assessments to at least:
70% of paying parents within 2 weeks	70%	73.2%
95% of paying parents within 6 weeks	95%	88.9%^[16]
of receipt of the properly made application.

¹⁴ Various factors have contributed to this year-end result including unexpected volumes and accounts needing review being higher than forecast. However, results have improved noticeably throughout the year, and we continue to exceed the 80% within 6 weeks performance measure.

¹⁵ This was a new measure for 2006-07. It challenged the previous target by reducing timeliness performance from three weeks to five days. However, we found that due to the short timeframe between when we receive the employer monthly schedule and when we generate the subsequent schedule it was unlikely we would achieve this standard. It has not been retained for 2007-08; instead it has been reincorporated into the measure for FBT and GST, as it was in 2005-06.

¹⁶ In the first few months of the year there were issues with the process used to disperse the applications to the correct sites for actioning. A number of initiatives were introduced and performance in the second half of the year improved to within 5% of the performance standard.

Activity forecast (demand driven)

	Budget	Actual
Based on demand in prior years we expect to process an estimated 52,500 to 55,000 applications for child support.	52,500-55,000	54,703

Output 3.2 Child support administrative reviews

Description

This output involves providing an administrative process for reviewing child support assessments that is both inexpensive and readily available to custodians and paying parents.

Performance measures

	Budget	Actual
Timeliness
We will issue:
at least 90% of administrative review decisions within 7 weeks	90%	89.3%
100% within 10 weeks	100%	97.2%
of receiving the application.

Activity forecast (demand driven)

	Budget	Actual
Based on demand in prior years we expect to complete an estimated 3,400 to 3,600 applications for administrative review of child support assessments.	3,400-3,600	3,962^[17]

¹⁷ First quarter volumes were higher than forecast because processing delays in 2005-06 meant a number of reviews were rolled over to this year. Volumes for the last three quarters of the year were as forecast.

Output 3.3 Payment, returns, collections and disbursements

Description

This output involves:

issuing rebates and refunds
disbursing child support payments to custodians and the Crown
receiving and banking payments (including child support payments from paying parents)
accounting and reporting the collection of Crown revenue.

Performance measures

	Budget	Actual
Quality
We will correctly process all notices, statements, certificates of entitlement and loan transfer letters.	100%	94.1%^[18]
We will correctly process all payments to accounts.	100%	99.8%
We will collect at least 78% of child support assessments (excluding cases we manage on behalf of overseas agencies and uncollectable debt cases) for the year ending 31 March 2007.	78%	77.2%
We will ensure that at least 70% of assessed paying parents (excluding cases we manage on behalf of overseas agencies and uncollectable debt cases) pay their whole liability by the due date.	70%	64.8%^[19]
We will ensure that at least 20% of returns are filed electronically.	20%	29.6%

	Budget	Actual
Timeliness
We will process and issue:
at least 90% of rebate claim refunds within 3 weeks of receipt, except during May when we will process and issue at least 90% within 4 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets)	90%	93.8% (elec: 98.2%)
at least 100% of rebate claim refunds within 8 weeks of receipt, except during May when we will process and issue at least 100% within 9 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets).	100%	97.5% (elec: 99.3%)
We will issue 100% of paid parental leave payments to customers when they are entitled to receive them.	100%	98.7%
We will bank 100% of payments on the day of receipt, except during the week of 7 April when we will bank 100% of payments within 2 working days of receiving them.	100%	99.0%
We will issue 100% of family assistance payments to customers when they are entitled to receive them.	100%	Not measured^[20]
We will make at least 95% of identified child support payments received by the due date (20th of the month) to custodians on or before the 7th day of the following month.	95%	97.5%
We will disburse the balance, and any previous payments received prior to the 7th day of the following month, by the 20th of that month.	100%	98.5%

¹⁸ Results for this measure have fluctuated all year with variations in performance evident within different return types. We expect to achieve this standard going forward.

¹⁹ There have been a number of initiatives put in place to improve achievement towards this standard. This result is 2.6% higher than comparable performance in 2005-06.

²⁰ This was a new performance standard for 2006-07 designed to reflect a customer focussed outcome for Working for Families Tax Credits. Ambiguity with the wording meant that the standard could not be measured. However, a proxy standard, which reflected the intent of the original performance standard, was developed during the year - "We will process 100% of all new Family Assistance applications within 2 weeks of being received". The result for the proxy standard of 96.3% was within 5% of the standard.

Activity forecast (demand driven)

	Budget	Actual
We expect to process an estimated:
7.32 to 8.09 million returns	7.32-8.09 million	8.06 million
7.51 to 8.30 million payments	7.51-8.30 million	7.83 million

Output 3.4 Supply of information to other agencies

Description

This output involves the supply of information to other government agencies, in line with the agreements between Inland Revenue and those agencies.

Performance measure

	Actual
We will ensure that all information provided to other agencies meets agreed standards.	Achieved

Output statement: Services to process obligations and entitlements

for the year ended 30 June 2007
2005/06 Actual $000		2006/07 Actual $000	2006/07 Main Estimates $000	2006/07 Final voted $000
	Revenue
59,402	Crown	82,767	108,939	81,989
1,828	Other	2,051	2,245	2,490
61,230	Total Revenue	84,818	111,184	84,479
	Expenses
59,654	Annual appropriations	84,252	111,184	84,479
-	Other appropriations	-	-	-
59,654	Total expenses	84,252	111,184	84,479
1,576	Net surplus/(deficit)	566	-	-
58,326	Output 3.1 Registrations, applications and assessments	60,362	20,636	61,007
-	Output 3.2 Child support administrative reviews	2,515	4,328	2,542
-	Output 3.3 Payments, returns, collections and disbursements	19,474	84,577	19,682
1,328	Output 3.4 Supply of information to other agencies	1,901	1,643	1,248
59,654	Output expense cost	84,252	111,184	84,479