16/10/99 - Winz staff cleared of overspending

Pictured: Christine Rankin

By Vernon Small

                 The Auditor-General has found no individual to blame for Work
                 and Income NZ's excessive spending of $235,000 on a staff
                 training course at the Wairakei Resort Hotel in June.

                 In a report issued yesterday, David Macdonald said the
                 spending, which included $165,000 on charter flights, "did not
                 take place simply as a result of self-serving extravagance by
                 staff at the department."

He said it was the final result of a series of miscommunications and mistakes.

                 "These miscommunications and mistakes, although arguably not enough
                 individually to have caused serious problems, compounded into a significant
                 overall error that has proved costly to the department, both financially and in
                 terms of its credibility with its stakeholders," Mr Macdonald said.

                 The Winz chief executive, Christine Rankin, accompanied by a bevy of internal
                 and external public relations advisers, read a statement yesterday welcoming the
                 report. She refused to answer questions or give interviews.

The Auditor-General's report found that spending on the Wairakei training course
was an isolated incident.

It said there were certain weaknesses in Winz's systems that contributed to the
problem.

There had been no independent assessment or review of the charter spending,
and there was confusion about who was overseeing the organiser of the course.

                 The report found that the start of the overall error was not the decision to charter,
                 but the choice of Wairakei as a venue just before Queen's Birthday Weekend, at
                 a time the Desert Rd might be closed.

Mrs Rankin told the investigation she had indicated that holding the course at
Wairakei at that time should be explored.

But the course organiser said she took Mrs Rankin's words to be a direction to
organise the course at Wairakei on those dates.

The report does not indicate which version of events it favours, and therefore fails
to directly lay blame.

The course organiser was suspended and has since resigned, and is taking an
Employment Court case against Winz.

In her evidence, she said she expected that chartering aircraft "created risks in
relation to public perceptions" and therefore took steps to minimise publicity.

Mr Macdonald said this secretive flavour was inappropriate.

"Unless circumstances are exceptional, the activities of Government departments
should be able to sustain public scrutiny," he said.

                 The report finds that despite initial speculation that the dealings between the
                 course organiser and the firm that arranged the charter, DestinatioNZ, may have
                 provided scope for fraud, there was no evidence whatever of fraud.

The average cost of flying each of the 107 staff to Wairakei was $1403, plus GST.

The total cost of the conference was $235,206, with the air travel costing
$168,429.

Mrs Rankin has already been censured and the bonus on her $250,000-a-year
pay was docked by the State Services Commissioner, Michael Wintringham.

                 He found a lack of financial discipline in the department and concluded that Winz
                 did not appear to understand what constituted acceptable spending of public
                 money.

                 Social Services Minister Roger Sowry and his associate minister for the Work
                 and Income portfolio, Peter McCardle, said in a statement that they had
                 confidence in Mrs Rankin and that the department had already made changes to
                 tighten its systems.

Green MP Rod Donald said Mrs Rankin chose the dates and the venue for the
course and was made aware twice that a plane was being chartered.

He said she should have known the expenditure was excessive yet she chose to
proceed.