On 2 March 2010, the Auditor-General, Lyn Provost, released terms of reference for an inquiry into certain types of expenditure in Vote Ministerial Services that provide or have the potential to provide private benefit to a Minister. The inquiry was initiated by the Auditor-General after separate requests from the Prime Minister, Mr Phil Heatley MP, and the Department of Internal Affairs.
This report addresses the first part of our inquiry's terms of reference. We summarise the general principles that apply to public expenditure where there could be private benefit and our overall findings and conclusions, followed by a detailed report about our audit of Mr Heatley's ministerial office's expenditure. We intend to report separately on the remaining parts of our terms of reference.
Purpose
The purpose of the inquiry was to:
- audit the expenditure incurred by Mr Heatley's ministerial office from when he became a Minister in November 2008 until he resigned from his ministerial portfolios for Housing and Fisheries on 25 February 2010;
- review the rules, policies, and procedures to see whether they are appropriate and effective, and identify any improvements that can be made; and
- consider any other matters that the Auditor-General considers relate to, or arise from, the above.
Key Results
Our inquiry highlights the need for careful decision-making and good judgement when public money is spent on items that have the potential or can be seen to give private benefit to a person.
The boundaries between business and personal expenditure need to be well understood and managed. For Ministers and members of Parliament, the boundaries between parliamentary, ministerial, party political, and personal expenditure may be difficult to manage in practice. This places an even greater responsibility on Ministers and members of Parliament to manage their expenditure with care and appropriately. Any accusation of inappropriate spending by a Minister or member of Parliament, no matter how small the amount, can undermine the public's trust in the integrity of government and Parliament.
From the work we have done in the first part of our inquiry, we consider that there are some general lessons to be learned by the administering agencies about how the knowledge and understanding of rules and policies, and their implementation in practice, can be improved.
As we have said in our previous reports on parliamentary and ministerial entitlements, in our view, the rules are not simple to understand or administer. The rules need to be able to be understood not only by those administering the system and receiving entitlements, but also by the public who fund the entitlements. The rules also have to be able to work in practice, and to align with common sense. We will explore these matters further when we address the remaining parts of our terms of reference.