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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