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Sensitive Expenditure: Auditor-General's Good Practice Guide Updated

We’ve updated our good practice guide on controlling sensitive expenditure. Our guide provides practical guidance on specific types of sensitive expenditure, outlines the principles for making decisions about sensitive expenditure, and emphasises the importance of senior leaders “setting the tone from the top”. It also describes how organisations can take a good-practice approach to policies and procedures for managing sensitive expenditure.

Sensitive expenditure is any spending by an organisation that could be seen to be giving private benefit to a staff member, their family, or friends. It risks harming an organisation’s reputation and the public sector more generally – for example, if the expenditure could lead to concerns that the spending is inappropriate or lacks a legitimate business reason. Issues concerning sensitive expenditure arise regardless of how much money is spent. Even a small amount can raise concerns if it appears to be improper.

Through our work, we continue to see examples where public organisations aren’t applying sound judgement when making decisions about sensitive expenditure. We’ll be writing to them to ask them to review their policies and procedures relating to sensitive expenditure as a result of this updated guide. Decisions about sensitive expenditure should be made on a principles-based approach, rather than a set of rules. This is because it is not possible or desirable to set rules for every possible situation.

This is a topic we encourage all public organisations to pay close attention to. The public’s trust and confidence in the public sector is of critical importance – and mishandling sensitive expenditure poses a great risk to that trust and confidence.

In case you missed it: We’ve also recently updated our guidance on managing of conflicts of interest, which you can read on our website.

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