Treasury 'worst' at following its own closing the gap rules

By AUDREY YOUNG political reporter

The Treasury has been judged the worst department at following rules for reporting Closing the Gaps expenditure - rules it set for everyone else.

Treasury officials dispute the assessment given in a report of the Controller and Auditor-General, arguing that the rules were interpreted too rigidly by the Auditor-General's office and therefore its judgments were misleading.

The other public service super-cop, the State Services Commission, scored almost as low as the Treasury and it, too, has objected to the Auditor-General's report.

The report compares 12 Government departments and how they report the Government's flagship Closing the Gaps policy in their annual reports, starting with the latest batch of annual reports tabled in Parliament.

The rules for reporting were set out in a Treasury circular dated June 19, 2000.

That was well before the Government's about-turn in late September on presentation of its Closing the Gaps policies. Since then, officials have been instructed to reduce emphasis on the policies targeted at Maori in favour of the policies targeted more broadly at the disadvantaged, without ethnic reference.

And the term "social disparities" appears favoured over Closing the Gaps. That shift is likely to result in changes to the reporting requirements demanded of departments for next year's annual reports.

But for this year, the Treasury's June circular told Government chief executives that the cabinet wanted a breakdown on the effectiveness in three categories of expenditure: first, spending aimed at improving Maori only; second, at-risk groups not targeted specifically at Maori; and third, other spending on Maori not covered by categories one and two.

As well as expenditure by category, the circular also stipulated that the cabinet wanted four issues addressed in relation to Maori and Pacific Island people: actual versus budgeted expenses; the "intervention logic" of the expenditure (the link between the spending and the intended outcome); evidence of effectiveness; and plans to obtain effectiveness information not yet available, making five sets of information.

The Treasury received demerit crosses against all five measures for providing none of the sets of information set out in its own circular.

The State Services Commission received four demerit marks and just one tick, for reporting on "expenditure by category."

According to the Treasury, the circular was designed to focus on departments delivering service and programmes rather than central policy agencies - such as itself, the State Services Commission, and the Social Policy Agency.

And its circular has been taken more literally than was intended by the Auditor-General's office.

"We had no expectation that these specific headings be used by any departments as long as the relevant information was included," a deputy secretary, Peter Bushnell, told the Herald.

The table scoring various departments on their reporting approach was irrelevant.

"The table looks at whether or not departments used the particular heading in the circular in their annual reports - focusing on the form rather than the substance of departmental reporting.

"It does not examine the quality or comprehensiveness of the information under those headings."

Consequently, it gave "a skewed picture" of departments' reporting performance.

Mr Bushnell had objected to the draft report, as well, but had been ignored.

State Services Commissioner Michael Wintringham said he was not consulted about the report or given a draft.

It was important that departments demonstrated the effectiveness of their programmes and that the quality of reporting was reviewed, he said.

"But in this case the Controller and Auditor-General's report appears to be based on the mistaken view that the State Services Commission is one of the core departments directly supporting the Government institutional arrangements for its social disparities policies. We are not.

"Our role is to build a modern public service that is effective for all New Zealanders. We are doing that."

The reports in question refer to the 1999-2000 financial year.

Herald Online feature: Closing the Gaps