Part 1: Overall findings

1.1 Travel expenses to Hong Kong and China

We found significant weaknesses and poor practices in the earlier years tested (2009 and 2010). These problems continued, although to a lesser extent, in 2013 and 2017. Our detailed concerns are set out in this report at section 4.3, Travel expenses - detailed findings. In summary, we found:

• limited evidence of the prior approval or business justification for the trip costs;
• that the documentation provided to support expenditure, for example invoices, receipts, or other validating documentation, was often inadequate, in Mandarin (and untranslated) or missing. In these instances, it is unclear how the person who approved the expenditure could have determined what the expenses were for and whether they were appropriate;
• cash advances that remain unexplained and unreconciled;
• practices that meant the “one-up” principle for approving expenditure was not followed (this included examples of senior executives approving their own expenditure);
• expenditure that was beyond what might be regarded as moderate or conservative;
• departures from Wintec’s policies and good practice that remain unexplained;
• instances where expenditure incurred on purchasing cards (p-cards) had not been approved;
• instances of potential personal expenses or travel which were not reimbursed to Wintec or not adequately explained; and
• that the guidance in Wintec’s various policies relating to gifts is inconsistent, meaning it is unclear whether some purchased gifts complied with the policies.

Each one of these matters is of concern. In combination they raise serious doubts about Wintec’s systems and controls for international travel during the period we reviewed. Wintec should urgently review its systems and policies to ensure they align with the expectations for public entities.

Importantly for our work, the practices we observed, combined with the lack of adequate documentation, have also meant we were unable to put together a complete account of the expenses incurred by the Chief Executive and the executive staff members while in Hong Kong and China. This is not good enough for a public entity operating in New Zealand. Senior executives of public entities must be transparent about, and accountable for, the expenditure they incur.

We are aware that our work has been carried out in the context of allegations that inappropriate or personal expenditure may have been incurred on overseas trips, including trips during the period covered by our work. While we have not found direct evidence of serious wrongdoing, we have found weaknesses that provide an increased opportunity for the misuse of public money. Because of the problems outlined above, we are unable to provide assurance that all expenditure was appropriate or not of a personal nature.

1.2 Redundancy and severance payments

The purpose of our work on redundancy and severance payments was to establish the number and amount of payments made, and the basis for those payments. Unlike our work on travel expenses, we did not assess the appropriateness of the payments. Our work focused on whether:

• there was evidence of the payments being approved in line with Wintec’s financial delegations;
• the payments were supported by formal agreements, such as settlement agreements or employment contracts; and
• the documentation supports the calculation of the payments.

Our detailed findings are set out in this report at section 5.2. Redundancy and severance payments - detailed findings. In summary, on redundancies we found that:

• There were no written change proposals outlining the reasons and process for a proposed restructure for 35% of redundancy cases;
• most proposals failed to consider the financial cost of the proposed restructure;
• there was no evidence that where change proposals were developed they had been appropriately approved;
• in most cases before June 2016 there was no evidence that the confirmed redundancies had been approved by the Chief Executive, as was required by the delegated employment authorities in place at the time; and
• there were some inconsistent or variable practices for voluntary redundancy, redeployment, and applying the pay in lieu of notice period when calculating redundancy payments.

For severance payments we found:

• in most cases, severance payments followed mediated settlement agreements signed by all parties;
• there were two severance payments in 2016 without a formal deed or agreement. The settlement terms appear to have been confirmed in correspondence. This is inconsistent with good practice; and
• before June 2016, most settlement agreements or severance payments lacked evidence that they had been approved by the Chief Executive, as was required by the delegated employment authorities in place at the time.