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Audit Office Questions Police Spending

Press Release: New Zealand Labour Party
Date: Friday, 16 July 1999

An Audit Office report concludes that the Government was warned
about disturbing Police financial practices months before the
Commissioner exceeded his spending authority by $15 million,
yet failed to rein him in.

Labour police spokesperson George Hawkins says the report is
damning evidence of the Government's incompetence at managing
public money, and further evidence of the chaos surrounding the
Incis computer project.

The Audit Office report was requested by the Justice and Law
Reform select committee after Mr Hawkins revealed in June that,
in December 1997, Police had signed a $20 million extension to
the INCIS contract with IBM. Cabinet approval was not sought
until 6 months later, at which point Treasury advised that there
was 'limited scope' to avoid approval since the contract had
already been signed.

Mr Hawkins said that the report showed that a few months prior
to the police signing the $20 million Incis extension, the Audit
Office had warned the Government about disturbing Police financial
practices:

'we noted instances where appropriate delegated financial authority
had not been obtained … This problem was particularly evident
in the case of IT projects. We recommend the expenditure authorisation
process be centralised and strengthened to ensure all expenditure
on capital projects are approved by someone who has the appropriate
level of financial delegated authority.'

"Police were in the middle of a $100 million IT project and the
Audit Office issues a warning like that? Alarm bells should
have been ringing in ministerial heads," Mr Hawkins said.

"Despite this clear and specific warning, the Government failed
to act. A few months later, the Commissioner signed the public
up for $20 million when he only had authority to spend $5 million.
The Minister himself is only authorised to spend $10 million.

"When the Government finally caught up with this breach of authority,
rather than demand some accountability it tried to hush the matter
up to avoid the public controversy. $20 million is a staggering
amount of money, yet their only action was to write a letter
to the Commissioner 'advising him of Ministers' displeasure'.

"It took me more than 3 months to get evidence of the breach
under the Official Information Act. This Audit Office report
shows why the Government tried to keep it quiet - because it
reflects very badly indeed on their management practices.

"This Government's bungling incompetence and lack of accountability
have gone on for nine long years. New Zealanders deserve better,"
George Hawkins said.

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