Equity injections and administered assets or liabilities
Capital funding through appropriation Acts (No. 2/4/6) is provided in the form of an appropriation for an equity injection or administered assets and liabilities, to:
- purchase new assets or replace existing major assets
- discharge liabilities or loans
- provide start-up capital for new entities.
As appropriation Acts automatically extinguish after 3 years, when the Act is repealed, entities requiring funding in the following years will need to seek a new appropriation.
If an entity:
- underspends on an administered appropriation:
- a separate NPP is required to use that underspend for another capital project, or
- the underspend should be quarantined and returned to government.
- intends to increase the budget for an administered capital project, a separate government decision is required for the additional funding.
In addition to using DCB, ACB, or seeking additional appropriations, entities may use other appropriate funding for the purchase of assets and capital expenditure, such as:
- section 74 external revenue or cost recovery activities (for NCEs)
- external revenue received for goods and services
- proceeds from the sale of assets
- special appropriations
- special accounts (which are mostly externally-funded)
- cash reserves.
Government approval is required to purchase administered assets.