Attachments:
expensescreditcardsdata.xls
sscpurchasingcards.pdf
expenditurefooddrinkfarewellssscpolicy.pdf
travelpolicyssc.pdf

Commissioner’s comment on chief executive credit card expenses

Media statement from Iain Rennie, State Services Commissioner, 5 August 2010.

See attached above: Excel spreadsheet of expenses, and three State Services Commission internal policies.

Late last year I asked my staff to develop a process where the business expenses, gifts and hospitality for the Public Service chief executives could be published on a quarterly schedule to increase the levels of transparency around the use of public funds.

This release today, under the Official Information Act, of the credit card expenses for the Public Service chief executives, the Commissioner of Police and the Chief of the Defence Force from June 2008 to July 2010 is the first of these releases. The next will be either later this year or early in 2011 and, as well as business expenses, will include all hospitality and gifts received by chief executives since 1 July 2010.

I am introducing this schedule under my mandate to establish standards of integrity and conduct for State Services agencies. In the coming weeks, I will issue a draft code to ensure that the system is set up in such a way that allows for the efficient publication of the data in a way that makes it easy for people to access and reuse.

The credit card data for the previous two years, June 2008 to July 2010, shows:

- the total amount spent across the 36 departments for the two years was $875,601.62 - $414,810 in 2008/09 and $374,578 in 2009/10

- by way of comparison, in the previous financial year, 2007-2008, the total for 35 departments was $390,445

- the average amount spent by chief executives over the two year period was $19,091.64

- the highest amount spent by a chief executive was the $66,105.67 and the lowest amount was $118.50.

I would caution against making assumptions based on comparisons between chief executives or agencies; there are a number of variables that invalidate this approach:

- length of tenure: all chief executives, or acting chief executives, were not in role for a similar length of time over the requested period

- some smaller agencies only have one credit card and use it for all organizational expenses, including all staff travel

- the practice of charging international travel varies; some chief executives use their cards, others have travel agents charge back to their agency.

There are three principles that I apply when considering these results. The first is that no State servant should use a departmental credit card for personal benefit.

From what I have seen, all of the expenses incurred by chief executives are work related. I see no evidence of any behaviour that would require any disciplinary action.

There are some instances where chief executives have reimbursed purchases made on the card, and there are circumstances where this is a pragmatic and acceptable course of action. For example, it is not always practicable to separate personal from work related expenses when checking out from a hotel - in this case it is my expectation that the chief executive would reimburse the department immediately upon their return to work.

The second principle is that hospitality and entertainment put on departmental credit cards should only ever be moderate. Public servants must use their judgement to ensure that expenditure is appropriate and fit for purpose.

Of the total amount incurred by chief executives over this period, approximately 23 percent in 2008/09 and 22 percent in 2009/10 was related to hospitality and entertainment. In many cases this is justified; where, for example, a chief executive is extending hospitality to members of a delegation from another jurisdiction.

However, some expenditure - particularly on food and alcohol for staff - appears to be excessive.

While I encourage chief executives to recognize and reward good performance in their agencies, I do not think that using departmental credit cards in expensive restaurants is an appropriate way to encourage good performance or a culture of prudence with public funds.

It is my expectation that chief executives will review their agency's policies on expenditure on food and drink for staff functions and amend them to reflect this. I am publishing the State Services Commission's policies to assist them with this.

Another significant proportion of the total cost has been spent on international travel, approximately 36 percent in 2008/09 and 31 percent in 2009/10. Chief executives are expected to participate in these meetings with their colleagues from overseas jurisdictions, and there is significant benefit to New Zealand in them doing this. The principle is that all international travel is of demonstrable benefit to the agency, and therefore the taxpayer.

My intention in publishing this information was to increase the levels of transparency around the use of public funds. By making this a regular quarterly publication, New Zealanders will have more visibility of the activities of chief executives and consequently more trust in their public services.

All of the data is on the SSC website: http://www.ssc.govt.nz/credit-cards

ENDS

Attachments:
expensescreditcardsdata.xls
sscpurchasingcards.pdf
expenditurefooddrinkfarewellssscpolicy.pdf
travelpolicyssc.pdf

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