Part 1: Introduction

Inquiry into New Zealand Defence Force payments to officers seconded to the United Nations.

1.1
In this Part, we explain:

Why we carried out our inquiry

1.2
We carried out an inquiry into several matters associated with the payment of accommodation assistance by NZDF to four officers who it seconded to the UN in New York for different periods between 2001 and 2008.

1.3
NZDF provided the four seconded officers with accommodation assistance, in the form of money to pay for rental costs. The four officers also applied for and received a rental subsidy from the UN. The UN required a staff member applying for a rental subsidy from the UN to declare whether they were also receiving assistance with rent or housing from anyone else. The four officers did not declare their NZDF accommodation assistance to the UN.

1.4
In June 2007, the UN found out that the fourth officer seconded by NZDF had not declared that he was receiving accommodation assistance from NZDF. In September 2007, as a result of an NZDF Military Police investigation, the Vice Chief of the Defence Force was advised that:

  • the four officers had received their accommodation assistance under a Defence Force Order; and
  • it was possible that the other three officers had also made false declarations to the UN.

1.5
On 1 July 2008, the Chief of Defence Force convened a Court of Inquiry under the Armed Forces Discipline Act 1971 to inquire into the circumstances in which conditions of service for officers seconded to the UN were developed and implemented.

1.6
The Court of Inquiry reported on 17 July 2008. It found that four NZDF officers seconded to the UN had signed declarations stating that they were not receiving any accommodation assistance from NZDF. The declarations were false: the four officers were receiving accommodation assistance from NZDF.

1.7
More generally, the Court of Inquiry found that the UN's requirements for seconded employees were incompatible with NZDF's responsibilities for setting conditions of service for its service members. It found that NZDF had not fully understood or addressed this incompatibility since secondments began in 2001.

1.8
In 2008, the then Minister of Defence, Hon. Phil Goff, asked the Auditor-General to review the findings of the Court of Inquiry. In particular, he asked the Auditor-General to inquire into:

  • why NZDF did not address the apparent incompatibility between its policy and UN requirements when the issues received some attention in 2005; and
  • whether any officers in NZDF encouraged or condoned the practice of signing false declarations to the UN.

1.9
In 2009, the new Minister of Defence, Hon. Dr Wayne Mapp, asked the Auditor-General to include the question of whether NZDF had treated the four seconded officers equally. We agreed to do so.

What we looked at

1.10
We agreed to inquire into:

  • how NZDF managed the arrangements for the four officers seconded to the UN, particularly housing allowances and their consistency with the UN's requirements;
  • whether any individuals within NZDF encouraged, condoned, knew of, or acquiesced in the practice of seconded personnel signing false declarations to the UN; and
  • NZDF's consistency of treatment of the four officers seconded to the UN in New York who received an accommodation allowance from NZDF.

1.11
We carried out our inquiry under sections 16(1) and 18(1) of the Public Audit Act 2001. We reviewed an extensive amount of NZDF documentation and files, and analysed the UN's requirements from 2000 to 2007. We interviewed, under oath,1 17 current and former members of NZDF. We gave all those people about whose actions we have made adverse findings an opportunity to comment on draft sections of the report, before finalising it for publication.

1.12
We note that we could not review the Court of Inquiry's findings because of Armed Forces Discipline Rule of Procedure 158. This Rule provides that any evidence obtained in a Court of Inquiry is not admissible against a person in any matter. To avoid infringing that Rule, we put the Court of Inquiry record and the record of interviews aside. We did refer to the documents obtained by the Court of Inquiry, as we would have been able to obtain those under our powers under the Public Audit Act.

1.13
Effectively, we conducted a new inquiry into the matters previously considered by the Court of Inquiry. Our purpose was not only to confirm the findings of the Court of Inquiry but also to look more deeply into the causes of the failures that had been identified.

Our approach to naming individuals

1.14
We have not named any individuals in this report. Rather, we refer to all individuals by their job title.2 We refer to the four seconded officers by number in the order that they were seconded to the UN – Officer 1, Officer 2, Officer 3, and Officer 4. We have taken this approach because we do not consider it appropriate for those individuals to be made publicly accountable for what are complex organisational failings.

1.15
During the nine years covered by this report, people were promoted or moved from one position to another. For example, the person who was the Assistant Chief Personnel at the start of this report was the Chief of Defence Force at a later stage in the report, but was no longer in that role at the end of this report. The person who was the second Military Adviser in New York reappears later as Officer 4.

1.16
Although we have not named the individuals in this report, we consider it important to identify when the holder of particular roles changed. We have used superscript letters to mark such changes. For example, two different people held the post of Director of Military Personnel Policy Development. We refer to the first as the Director of Personnel Military Personnel Policy DevelopmentA, and the second as the Director of Military Personnel Policy DevelopmentB.

Structure of the New Zealand Defence Force

1.17
The secondment of officers to the UN involved several different branches of NZDF's headquarters in Wellington at various points. The internal structure of positions and branches within NZDF also changed during the nine years discussed in this report. In summary, the key parts of the organisation were:

  • the Chief of Defence Force, who heads the organisation and approves and issues the relevant organisational rules (known as Defence Force Orders);
  • Personnel branch, headed by the Assistant Chief Personnel, which is the branch in headquarters responsible for developing and implementing policy for NZDF personnel, as well as for dealing with personnel issues;
  • Operations branch, headed by the Assistant Chief Operations, which was the branch in headquarters responsible for operational deployments (this branch later became known as Strategic Commitments and Intelligence branch and was headed by the Assistant Chief Strategic Commitments and Intelligence);
  • Services directorate, headed by the Director of Services, which is the branch in headquarters responsible for administering entitlements set by Personnel branch for officers posted or seconded overseas; and
  • the NZDF Military Adviser posted to the New Zealand Permanent Mission to the UN (the New York office of the Ministry of Foreign Affairs and Trade that manages New Zealand's interactions with the UN), who was the liaison person for any NZDF staff working in the UN. The management of Military Advisers was split so that their command and control rested with the Deputy Chief of Defence Staff, but their administration (such as payment of non-salary-related allowances) was the responsibility of the Services directorate.

1.18
Figure 1 sets out the relationship between these parts of the organisation and the reporting lines in 2000 and 2001.

Figure 1
Relationships and reporting lines within the New Zealand Defence Force in 2000 and 2001

Figure 1: Relationships and reporting lines within the New Zealand Defence Force in 2000 and 2001.

1.19
In 2005, the organisational structure and reporting lines were slightly different from those shown in Figure 1. The position of Deputy Chief of Defence Staff no longer existed, and there was a new role of Vice Chief of Defence Force. The Operations branch was replaced by Strategic Communication and Intelligence and reported to the Vice Chief of Defence Force. Similarly, the Services directorate and Military Advisers reported to the Vice Chief of Defence Force. The Personnel branch continued to report directly to the Chief of Defence Force through the head of Personnel branch, Assistant Chief Personnel.

1.20
We note that NZDF's organisational structure and reporting lines changed again in 2006 and 2008.

1.21
Officers within NZDF always have a commanding officer, who is the officer they take orders from. Command lines also provide the framework for administrative responsibility for staffing matters. Usually, the commanding officer is within the same service (air force, army, or navy) as the officer, but when an officer is in a role at NZDF headquarters the situation is different. When an officer works at headquarters, they will have both a Branch Head and a Commanding Officer to whom they are responsible. A Branch Head (usually an officer at Brigadier-equivalent level) will direct the day-to-day conduct of activities of that officer. The Commanding Officer (usually an officer at Lieutenant Colonel-equivalent level) will be another officer who has responsibility for that officer's discipline and administration. The officers seconded to the UN did not have a formal commanding officer during their secondment, because they were not under the operational control or command of NZDF for that time.

How UN secondments fit in the New Zealand Defence Force's general work

1.22
The other important point to acknowledge at the outset is the practical context for this issue. NZDF currently employs about 9700 regular force, 2250 reserve force, and 2700 civilian staff. During 2000 and 2001, alongside its usual work, it was deploying personnel, often at short notice, to a number of overseas locations, including to East Timor. It was also involved in carrying out a major upgrade of Personnel Policy and a review of overall remuneration.

1.23
The Personnel branch and the Operations branch were responsible for ensuring the welfare, and organising the terms and conditions, for all those staff. Secondments to the UN affected one person at a time and involved sending that person to New York, where another organisation would be responsible for them. We accept that the issue was a small one for staff in NZDF's headquarters in Wellington.

Structure of this report

1.24
The next six parts of this report discuss the detailed and complex events relating to the four seconded officers as well as the development of NZDF policy for their conditions of service and entitlements. The report is mostly in chronological order:

  • Part 2 covers the period from March to December 2000 – it discusses the original decision by the Chief of Defence Force to pay seconded officers accommodation assistance and the arrangements made for Officer 1's secondment before he went to New York;
  • Part 3 covers the period from January to December 2001 – it discusses the arrangements made for Officer 1 once he started his secondment and the development of the policy for seconded officers and its later incorporation within Defence Force Orders;
  • Part 4 covers the period from late 2002 until early 2003 – it discusses the secondment of Officer 2;
  • Part 5 covers the period from mid-2004 until December 2005 – it discusses the arrangements made for Officer 3 and the events leading up to the amendment of the applicable Defence Force Order;
  • Part 6 covers the period from October 2006 until mid-2008 – it discusses the secondment of Officer 4 and his treatment by NZDF after the UN found out that he had made a false declaration; and
  • Part 7 covers the period from September 2007 until June 2008 – it discusses the continued payment of accommodation assistance to Officer 3 and the revocation of the Defence Force Order.

1.25
In Part 8, we set out our overall conclusions on what happened and what went wrong, as well as our comments on the underlying causes of the failures.

1.26
Appendix 1 sets out a timeline of events. The terms of reference for our inquiry are in Appendix 2.

1: Under section 26 of the Public Audit Act 2001, the Auditor-General can require a person to give evidence under oath. Evidence given under oath is covered by section 108 of the Crimes Act 1961 (which relates to perjury).

2: Within NZDF, lengthy job titles are sometimes abbreviated to strings of letters. To make it easier for all readers, we have referred to these job titles in full.

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