Executive summary
We were asked by the Chairman of Waikato Institute of Technology (Wintec) to carry out additional assurance work in conjunction with our 2017 annual audit. The additional work was to cover:
- expenses incurred by the Chief Executive, and past and present members of the executive team, for all travel to Hong Kong and China from 2009 to 2017 inclusive;
- expenses incurred by the Chief Executive, and past and present members of the executive team, for all other travel from 2013 to 2017 inclusive; and
- all redundancy and severance payments made to former Wintec employees from 2013 to 2017 inclusive.
We started our work on travel expenses by focusing on trips to Hong Kong and China in 2009 and 2010, and then extended our work to 2013 and 2017. We identified similar issues and deficiencies in each year, although there was some improvement by 2017. We spoke to Wintec about the value of us covering the remaining intervening years and travel to other countries, and it was agreed that we would not do so at this stage as further work is unlikely to change our findings. This means we have completed work on:
- expenses incurred by the Chief Executive, and past and present members of the executive team, in relation to travel to Hong Kong and China in 2009, 2010, 2013, and 2017; and
- all redundancy and severance payments made to former employees of Wintec from 2013 to 2017 inclusive.
A public entity must be able to show what it is spending money on and that any expenditure is justified, reasonable, and appropriate in the circumstances. Sensitive expenditure, where there is a perceived potential for private benefit, should be conservative and moderate. There also needs to be transparent and robust processes for approving expenditure. In both areas of testing, we identified:
- incomplete and inaccurate records relating to the expenditure; and
- numerous instances where the expenditure had not been properly approved.
As a result, in many cases Wintec has been unable to provide an account of how it has spent public money. This is unacceptable for a public entity charged with the stewardship of public resources.
We are particularly concerned about the processes, patterns of behaviour, and level of documentation we saw in our work on international travel expenditure. Some of these practices simply do not meet accepted standards of public sector behaviour and provide an increased opportunity for the misuse of public money.