Recurrent Expenditure Assurance Framework 

Purpose

The Recurrent Expenditure Assurance Framework (REAF) is an independent risk-based assurance process for the State’s Major Recurrent Expenditure Projects. It is established under the NSW Gateway Policy and is approved by the NSW Government.

The objective of the REAF is to provide assurance that the Government’s Major Recurrent Expenditure Projects across NSW are delivered on time and on budget by implementing this risk-based external assurance framework. The REAF will also ensure that the Cabinet Standing Committee on the Expenditure Review (ERC) is supported by effective tools to monitor the NSW Government’s major new policy proposals, receives early warning of any emerging issues, and can therefore act proactively to increase project success.

Risk-based approach

The REAF uses a risk-based approach to assign each project a risk tier. This tiered approach is designed to strike the right balance between a robust approach, correctly focused on the highest risks, and achieving value for money. This ensures that the right level of assurance is applied to each project.

 

Who needs to comply?

The REAF applies to all Major Recurrent Expenditure Projects being developed and/or delivered by Government agencies, Government Businesses, and State Owned Corporations (to the extent made applicable under TPP18-05 Major Projects Policy for Government Businesses or any successor policy).

What are Major Recurrent Expenditure Projects?

All recurrent expenditure projects that meet one of the following criteria are required to register:

• Projects valued at an Estimated Total Cost (ETC) of equal or greater than $100 million over the first four years or $50 million in any one year
• Projects nominated by ERC, NSW Treasury, or the Delivery Agency.

If they meet the above criteria, they are Major Recurrent Expenditure Projects and are subject to the REAF regardless of the funding source.

When to register?

Upon determining that a project qualifies as a Major Recurrent Expenditure Project, it will need to be registered with NSW Treasury Gateway Assurance as early as possible. This applies at any stage of the project’s lifecycle.

How to register?

If you would like to register or discuss your Major Recurrent Expenditure Project, please email our Treasury Gateway Assurance team: [email protected]. Once you've met with the team and we’ve confirmed your project’s eligibility, we will guide you through registration.

What are the benefits? 

REAF Assurance Reviews provide independent and experienced advice within a confidential environment, sharing outcomes between the NSW Government and the Delivery Agencies.

Assurance Reviews add value for the Delivery Agency by assisting the successfully deliver of projects through identifying key risks and making practical recommendations accordingly.

Assurance Reviews are structured so as not to delay the development or delivery of projects.

REAF on a page

 

Resources

Framework and Guides

• Recurrent Expenditure Assurance Framework TPG24-24
• Recurrent Expenditure Assurance Framework - A Quick Reference Guide
• REAF Risk Assessment Tool
• REAF Reviewer Application Form

Recent updates and future plans

• Summary of Changes and Future Updates July 2024

Frequently asked questions about REAF

What projects fall within the scope of REAF? 

A Major Recurrent Expenditure Project primarily comprised of: 

• New policy or service
• Renewal, re-tender or outsourcing of an existing policy or service
• Material change to an existing policy, service, or operating model
• Establishment of a new entity or a unit within an entity
• New, continuing or major changes to grants
• Development of a strategy or a research program
• Enhancement or extension of an agency capability
• Response to a regulatory or legislative change
• Non-routine maintenance of operating assets
• Other projects that do not fall within the scope of IIAF or DAF but meet the REAF Mandatory Registration Criteria

 

What types of Assurance Review are there? 

Gateway Review 
A review of a project at a specific key decision point (Gate) in the project lifecycle. 

Health Check
Health Checks support Gateway Reviews and assist in identifying issues that may emerge between decision points.

Deep Dive Review
Deep Dive Reviews focus on a particular issue, rather than a full range of matters that would normally be considered during a Gateway or Health Check Review. 

 

How is project risk assessed? 

Project risk is assessed using the REAF Risk Profile Criteria. Delivery Agencies conduct a self-Risk Assessment by applying a rating to each weighted risk assessment area which provides a Weighted Risk Score.

• Government Priority 15% 
• Interface Complexity 15% 
• Procurement complexity 20% 
• Agency Capability 20% 
• Criticality of Service 15% 
• Implementation Complexity 15% 

This Score applied against the project’s Estimated Total Cost (ETC) determines a preliminary Project Tier and proposed Assurance Plan. The Agency will then submit the relevant documents to NSW Treasury and MRAG to obtain a Final Project Tier and Assurance Plan.

 

What is the Major Recurrent Advisory Group (MRAG)?

It is an advisory group that provides advice to NSW Treasury on the preliminary Project Tier and proposed Assurance Plan provided by Delivery Agencies and reviewed by Treasury Gateway Assurance.

 

Do I need to create documentation for Assurance Reviews?

No. Review teams will use existing documents provided by the Delivery Agency and conduct a series of stakeholder interviews to formulate their review report and recommendations. It is not intended for agencies to create documentation for the purpose of Assurance Reviews.

 

My project is approved and is being implemented. Do I need to register?

Yes. The REAF applies at any stage of the project’s lifecycle. The registration process will consider what stage your project is. Assurance Reviews will not be conducted retrospectively.

 

My project is fully implemented. Do I need to register? 

No. Assurance Reviews will not be conducted retrospectively. 

 

My agency has contract renewals every four years. Do I need to register? 

Yes. The contracts must be registered each time if they fall within the scope of the REAF and meet the mandatory registration criteria.

 

My project has a mix of capital, digital, and recurrent expenditure. Who do I register with?

Delivery Agencies must identify the predominant purpose of the project and apply the most relevant GCA framework. If the predominant purpose is unclear, the Delivery Agency should contact Treasury Gateway Assurance through their Agency Relationship Lead at NSW Treasury for guidance.

 

Do Machinery of Government (MoG) changes require registration?  

No. MoG changes are out of scope.