Why is the State Services Commission requesting agencies make their expenditure publicly available?
The State Services Commissioner’s intention is to show New Zealanders that public funds are being spent judiciously, and that senior officials are modelling appropriate behaviours. This requirement is in line with international practice, and locally Ministers, MPs and Mayors are all subject to disclosure provisions.
The pro-active release of chief executive expenditure ensures a more transparent process and enables departments to manage and plan for each biannual release, rather than reacting to Official Information Act requests on an ad-hoc basis.
Does the disclosure requirement apply only to chief executives’ expenses?
Yes. The Commissioner’s disclosure requirement only applies to Public Service chief executives and to chief executives of Crown entities which are covered by the State Services Code of Conduct.
In a number of cases, expenses of a ‘corporate’ nature are also met from a chief executive’s budget, for instance overseas travel for other staff of the agency, catering for board meetings, or the purchase of equipment for wider use within a smaller agency. However, the disclosure will need to comprise only those costs that relate to the chief executive.
If individual chief executives decide to disclose expenses incurred by the staff in their organisations, such a move would be welcome as a further illustration of accountability for public funds.
Do agencies have to disclose their expenses, or can they apply for exemptions?
The expectation is that all agencies will provide their data openly in a way that makes it easy for anyone to access and reuse.
Is SSC intending to do anything with the information?
No. The information is not being collected or collated by the SSC, and the Commission will not be undertaking comparative analysis or initiating public comment on the information disclosed.
What is an expense? What does it include?
Expenses relate to all expenditure the chief executive incurs on (a) travel (accommodation, fares, meals and related costs); (b) providing hospitality of any kind; and (c) ‘Other’ which comprises anything not covered by the above categories.
It is not practicable to provide an exhaustive list, but the following items should be included as expenses:
Professional fees and memberships, where these are not part of the CE’s employment terms and conditions
Vehicle running costs when used on agency business
There is no blanket exemption for expenditure that agencies regard as restricted or ‘commercially sensitive’. An agency which considers that a particular item of expenditure falls within this category, and should be withheld, should raise this with the SSC.
Examples of expenses that are not expected to form part of any disclosure, as they are general business administration costs, include:
Equipment leasing costs and depreciation
Rent and cleaning of agency premises
Remuneration and personnel costs of senior management.
What expenses should be included in the section labelled ‘other’?
When an expense cannot be categorised as travel, hospitality, or gifts, it should be included in the ‘Other’ category. An example provided in the sample template is ‘expenditure in connection with the retirement of a long-serving staff member.’
What types of gifts and hospitality should be declared?
Gifts of a ceremonial nature (such as from visiting delegations) should be declared, as should invitations to functions and events, and goods and services offered. Chief executives are expected to exercise careful judgement before accepting any gift that has more than a token value, and these should always be declared on an open register within an agency, as well as on their future disclosures. Where the cost of a gift or hospitality received cannot reasonably be calculated, its value should be described as ‘value unknown’, and a description given.
The disclosure also applies to all gifts that CEs offer to other parties, which should be included under “other’ in the expenses disclosure. It is expected that very careful judgement would be applied before any such expenditure is incurred.
What level of detail is required particularly around hospitality expenses?
Agencies are asked to disclose information that is of public interest (and which could be requested under the OIA). Any supporting explanations should also be included to provide as much context as possible around the chief executive’s spending.
Why do agencies have to publish links to their expenses on www.data.govt.nz?
Data.govt.nz is an online directory of government datasets. To ensure the public has easy access to this data, and can make judgments about the information, it is important that all data sets are accessible on one website (data.govt.nz). Agencies will need to link from their website to data.govt.nz.
Why are agencies being asked to make retrospective disclosures?
In August 2010 all departments and many Crown entities released their chief executive’s credit card expenses under the Official Information Act for the period June 2008 to July 2010. To ensure continuous, accurate reporting on expenses, agencies are required to publish their expenses from the start of the current financial year – 1 July 2010.
The first public disclosure will be made for the six months to 31 December 2010, and then 6-monthly thereafter.
Why do agencies who already disclose their expenses to the OAG and Audit NZ have to follow this process?
This process is in line with international and local jurisdictions and comparable to that applying to Ministers and MPs. No other existing process achieves the same level of public disclosures.
The Commissioner is conscious of the relationship between Crown entity chief executives and their boards, including the scrutiny of expenditure. Crown entities may choose to release their information via their boards.
What steps can departments take to minimise negative public perception of their CE’s expenditure?
Inevitably, disclosure will result in some media and public comment, at least initially. Two ways in which this can be minimised are: to ensure that CE expenses are appropriate and modest; and to provide as much context around the expenditure as possible – in the Purpose column of the spread sheet. This disclosure is an opportunity for CEs to demonstrate an active commitment to their leadership role, and ongoing financial restraint.