Transcript: Sensitive expenditure: Justifiable business purpose

Transcript for a video about why sensitive expenditure decisions need to demonstrate a justifiable business purpose.

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Title: Sensitive expenditure: Justifiable business purpose

Karen Thomas, Taituarā — Local Government Professionals Aotearoa

It’s really important when we think about what it is we try to do in our organisations. That we understand there’s a range of ways in which we could execute our activities in order to achieve those goals.

There are opportunities where it might look like - not only will the community benefit – but we might be benefitting personally as well. It’s really, really important in those cases that we can be very clear about the decisions that have been made and why those decisions have been made.

At any time when you are investing money, for example travel, it’s got to be really clear what the purpose and the benefit of that travel is going to be to the community, even if it might seem like you get some perk out of it yourself. Perhaps you need to fly from Wellington to Auckland for a meeting, and it’s very justifiable that meeting is in person and not over the handy Zoom that we have all been using lately.

But let’s say your mum and dad live in Auckland and they haven’t been so well, and you have the opportunity to pop out and see them while you’re there. Can that be justified? There’s a myriad of answers to that question and clearly the black and white answers is either yes it can or no it can’t. That’s the sort of thing you need to talk through with your manager.

There’s also sometimes the opportunity for us to undertake travel internationally and it’s the same framework. Can the decision for me to travel internationally – particularly if I’m part of the decision making process – be something that’s justifiable in terms of how taxpayers or ratepayers will benefit as well as any opportunity I might have, for example, to do a little bit of sidebar travel while I’m overseas.

It’s always a good idea - once you’ve had that conversation with your manager – to make sure that you record in writing what that discussion was. Include, for example, some of the range of options that you might have considered. So if in fact in the end the decision is that you should travel somewhere, make sure you’ve documented why Zoom, or why just a telephone call or email wouldn’t be sufficed to achieve what it is you’re trying to achieve for the organisation or the programme or the project. This is really hard and if it was easy, we wouldn’t be doing this.

This comes down to a matter of judgement, and judgement is fine but follow it up with your paper trails, so somebody coming in after you can understand the decisions that have been made.

So, in the first instance, chat to your manager about what’s the right thing to do, have a clear understanding about what the business purpose of this opportunity is. Why is it going to be good for ratepayers, taxpayers, communities at large? And think about what gain you might have personally from it and make sure that you always land on the right side of making your decisions and being able to justify expenses that other people are paying for.

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