Part 1: Introduction
- Why did we look at fines collection?
- Scope of the audit
- How we carried out our audit
- What we expected to find
Why did we look at fines collection?
1.1
We have a strong interest in how public entities manage debt owed to the Crown and local authorities. The Collections Unit within the Ministry of Justice is responsible for managing part of that debt. This audit sought to assure Parliament that the Collections Unit has effective arrangements in place to collect, and if necessary enforce, infringement fines and Court-imposed fines.
1.2
Resolving offences through imposing fines has benefits for the Government, the criminal justice system, and offenders. Effectively collecting fines benefits the Crown by improving the credibility of fines as a sentencing option, while increasing public regard for the administration of justice, promoting compliance with the law, and increasing revenue.
Scope of the audit
1.3
The Collections Unit:
- collects and enforces fines imposed by a Court (Court-imposed fines) during sentencing of an offender, including reparation to victims;
- collects and enforces fines from infringement notices filed with the Court by issuing authorities;
- enforces civil debts for creditors when the Courts have ordered payments to be made; and
- serves documents for the Courts.
1.4
Of these debts, only Court-imposed fines and infringement fines are debts owed to the Crown or public entities (such as local authorities). We did not include reparation and civil debts in our audit, because they are payments, via the Crown, to private individuals or companies.
1.5
Reparation – the monetary penalty an offender is ordered to pay to the victims of his or her crime – indirectly affects the collection of Court-imposed and infringement fines. The Collections Unit has to collect reparation money owed by an offender before pursuing other fines offenders may owe. Since the Sentencing Act 2002 was passed, reparation has been used more often during the sentencing of an offender.
1.6
We did not examine the way issuing authorities, such as the Police and local authorities, issue and collect infringement fees. We examined how the Collections Unit deals with fines after it becomes responsible for collecting them.
Review of the infringement system
1.7
During our audit, concerns over the expanding use of infringement notices led to an announcement by the Minister of Justice and the Minister for Courts of a review of the infringement system. The Ministry of Justice and the Law Commission are undertaking this review.
1.8
Before we started our audit, one of our objectives was to assess the basis for adding administrative charges – filing and enforcement fees – to fines. We also intended to examine how the revenue from fines was allocated to the Crown and issuing authorities. Under the Transport Act 1962, half of the revenue from certain local authority infringement notices is returned to the Crown, and the local authority retains the other half. However, after the infringement notice is filed with the Court, the Crown retains 10% of the revenue collected and 90% is returned to the local authority.
1.9
We raised these issues with the Collections Unit and the Treasury. We received an assurance that administration charges, and allocating fines revenue, would be addressed as part of the review. Because of this assurance, our audit did not examine the basis for these arrangements.
How we carried out our audit
1.10
We undertook field work in the Collections Unit’s National Office, both Contact Centre sites, the Centralised Processing Unit, and District Collections Units in Wellington, Manukau, Waitakere, Tauranga, Rotorua, Nelson and Christchurch. We also met with infringement services staff in the Manukau, Auckland, Christchurch and Wellington City Councils, and the Police Infringement Bureau in Wellington.
1.11
We reviewed corporate documents and management information, and interviewed managers and collections officers. We observed their practices with offenders and accompanied staff enforcing fines collection. We also:
- observed collection practices;
- reviewed information contained in the Collections Unit’s databases;
- observed court procedures involving fines; and
- discussed collection and enforcement practices with local authorities and the Police Infringement Bureau.
What we expected to find
1.12
We prepared a set of performance expectations and assessed the Collections Unit against them. When forming these expectations, we consulted debt collection and credit management specialists and referred to similar performance audits undertaken by the National Audit Office in the United Kingdom and the Audit Office in New South Wales.
1.13
We expected to find that the Collections Unit:
- had strategies in place to encourage the prompt payment of fines;
- took prompt and effective action to collect fines;
- monitored and analysed fines, and other data, to guide decision-making, and set priorities to maximise collecting fines; and
- had strategies and systems in place to gain the skills and resources needed for effective debt collection and performance improvements.
1.14
This report discusses our findings against these expectations.