Transcript: Sensitive expenditure: Appropriate authority

Transcript for a video about why sensitive expenditure should be made with proper authority.

Title: Office of the Auditor-General logo

Title: Sensitive expenditure: Appropriate authority

Julie Read, Serious Fraud Office

Hi, I’m Julie Read and I’m the Director of the Serious Fraud Office and today I want to talk about sensitive expenditure, and in particular the fact that expenditure should be made with proper authority.

So, we have three key points in relation to this.

One, you should ensure that sensitive expenditure is pre-approved wherever that’s possible.
Secondly, the one up principle should be applied, and I’ll come back and explain what that is.
And thirdly, you should have appropriate supporting documentation so that the approver knows and understands what they are approving.

So, first of all, what does proper authority mean? First, that the person approving the expenditure has the appropriate financial delegation to do so. So that includes both expenditure for the value and for the type of expenditure that’s being incurred. Good practice also includes one up approval. Meaning that the approver is not just independent of the person incurring the expense, that is the person approving the expenditure is in a more senior role. So how do you measure that? Appropriate delegated authority means, can the approver authorise the type and amount of expenditure as I previously said, and pre-approval, does this allow any questions to be asked in advance about the appropriateness of the expenditure.

So, is it an appropriate expenditure for the agency and their business purposes? So how can originations ensure that their expenditure is made with proper authority?

First, ensure that there is a clear approval process in your relevant policies and ensure those processes are followed of course. I think one really good thing you can do in that context where you have a form that has got to be filled out, it should include the information from the policy within the actual form so people know they’re asked a question, why they’re being asked that question and the sort of information is required in response to it. Otherwise I think you can get very used to a form and you just go through in a bit of an automatic pilot and fill out a whole lot of stuff that might not actually answer the issues that you intended to respond to. And as we’ve said before, ensure that’s approved before you incur the expenditure, wherever that is possible.

I think it’s a really good idea to realise that there’s not much excuse for spending sensitive monies or monies that would be viewed sensitively, for example where it looks as though a private benefit is accruing to a staff member, not just a business benefit. You know that that’s coming up, you shouldn’t do it on the spur of the moment, so really it should be approved beforehand. And the other occasion when this can be quite difficult and I think this is genuinely difficult, is where there are multiple people at the same event, so that origination should have a clear guidance on how approvals apply in that case.

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