Public servants told to cut spending

File photo / Hawke's Bay Today

Public servants have been told to cut back on expenses, hospitality and entertainment for staff by State Services Commissioner Iain Rennie.

$875,000 was spent by chief executives across 36 departments between July 2008 and June 2010.

Releasing credit card records for State Services executives, Mr Rennie said about half of the chief executives had spent more than what he believed was appropriate.

Click here for the State Services Commission's details of public service credit card spending.

"Hospitality should be moderate. Some expenses on credit cards for hospitality appear to be excessive. This is where the public service as a whole needs to change its behaviour."

Twenty three per cent of credit card spending in 2008-2009 was on hospitality and entertainment, and it accounted for 22 per cent and 2009 and 2010.

Mr Rennie highlighted meals at expensive restaurants at $100 a head and said state sector bosses needed to reflect on the spending.

"We must always be thinking of who is paying the bills."

He said it did not appear that any of the spending on hospitality and entertainment breached policy of credit cards but it was beyond what was he thought was appropriate.

"While I encourage chief executives to recognise 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," Mr Rennie said.

The average amount spent by each department was $19,000.

The highest amount was $66,000. The lowest amount was $118.50 which was spent by Iain Rennie's predecessor Mark Prebble, however that covered only seven days.

Mr Rennie said comparisons between the totals were not easy as the terms of service for many chief executive over the period varied.

Also, smaller agencies such Ministry of Pacific Affairs only had one credit card and used it for all organisational expenses including staff travel, he said.

The accounts show former Food and Safety Authority chief Andrew McKenzie and Crown Law chief David Collins QC both spent over $65,000.

The Food and Safety Authority was disestablished this year.

Dr Helen Anderson, chief executive of the Ministry of Research, Science and Technology spent just over $50,000.

Dr McKenzie's love of expensive meals appears to have been a significant contributor him emerging as this country's biggest spending public sector chief executive.

He also took the former deputy chief executive of the authority out to 10 lunches over the past two years.

Dr McKenzie wrote the meetings off with the explanation: "CE has regular meetings to access institutional knowledge".

The lunches came to a total of $626.70 and were all charged to the authority's credit card.

Food Safety deputy director Carol Barnao said she could not comment on the lunches, except to say that the former deputy chief executive had many years of experience and would have provided useful insight to Dr McKenzie.

Dr McKenzie also paid in excess of $100 per head for several meals on his credit card between July 2008 and June this year when NZ Food and Safety was disestablished.

A "staff recognition lunch" for 10 directors at renowned Wellington eatery Logan Brown in December last year set the taxpayer back $1119.

Another dinner for eight at Vangionis Trattoria in Akaroa in March last year cost $858.

Dr McKenzie's total credit card bill for the two years was $66,000, making him the top spending public servant.

Ms Barnao said it was important to note that 70 per cent of the authority's expenditure is met by cost recovery from industries that the authority represents.

"As the head of the agency, he had to have relationships with our trading partners," Ms Barnao said.

She said it was these relationships which helped New Zealand products reach international markets.

Mr Rennie said a large component of spending by Mr McKenzie, Dr Collins and Dr Anderson was for international travel.

He said travel for the purpose of meetings with international colleagues was of significant benefit and value to New Zealand.

Bob Russell, who as Commissioner of Inland Revenue is responsible for gathering tax dollars, also demonstrated an occasional willingness to spend them more freely than Mr Rennie would like.

In June 2008 he spent $738.51 hosting a dinner for seven at Wellington's Whitehouse restaurant.

In November the same year and at the same restaurant he and other senior Inland Revenue officials hosted a party of their counterparts from the Australian Tax Office. The bill for the party of 12 came to $1,543.50 or $128.63 each.

Mr Rennie himself set a shining example for other public sector chief executives, the largest of his five items of credit card spending was $49.50 on a lunch with dean of the Australian and New Zealand School of Government Alan Fels in December 2008.

Mr Rennie said the information was released to increase transparency over the spending of public money

He said a further release would be made either later this year or early in 2011 and would include all hospitality and gifts received by chief executives since 1 July 2010.

Prime Minister John Key was asked by the Herald in Vanuatu about the accounts.

He said: "The vast majority is appropriate but some amounts have had to be paid back".

Mr Rennie said there had been some instances where chief executives had reimbursed purchases made on credit cards and said "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."

Credit card data in brief

* 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
(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

- NZHERALD STAFF