An Audit Office report concludes that the Government was warned about disturbing Police financial practices months
before the Commissioner exceeded his spending authority by $15 million, yet failed to rein him in.
Labour police spokesperson George Hawkins says the report is damning evidence of the Government's incompetence at
managing public money, and further evidence of the chaos surrounding the Incis computer project.
The Audit Office report was requested by the Justice and Law Reform select committee after Mr Hawkins revealed in June
that, in December 1997, Police had signed a $20 million extension to the INCIS contract with IBM. Cabinet approval was
not sought until 6 months later, at which point Treasury advised that there was 'limited scope' to avoid approval since
the contract had already been signed.
Mr Hawkins said that the report showed that a few months prior to the police signing the $20 million Incis extension,
the Audit Office had warned the Government about disturbing Police financial practices:
'we noted instances where appropriate delegated financial authority had not been obtained … This problem was
particularly evident in the case of IT projects. We recommend the expenditure authorisation process be centralised and
strengthened to ensure all expenditure on capital projects are approved by someone who has the appropriate level of
financial delegated authority.'
"Police were in the middle of a $100 million IT project and the Audit Office issues a warning like that? Alarm bells
should have been ringing in ministerial heads," Mr Hawkins said.
"Despite this clear and specific warning, the Government failed to act. A few months later, the Commissioner signed the
public up for $20 million when he only had authority to spend $5 million. The Minister himself is only authorised to
spend $10 million.
"When the Government finally caught up with this breach of authority, rather than demand some accountability it tried to
hush the matter up to avoid the public controversy. $20 million is a staggering amount of money, yet their only action
was to write a letter to the Commissioner 'advising him of Ministers' displeasure'.
"It took me more than 3 months to get evidence of the breach under the Official Information Act. This Audit Office
report shows why the Government tried to keep it quiet - because it reflects very badly indeed on their management
practices.
"This Government's bungling incompetence and lack of accountability have gone on for nine long years. New Zealanders
deserve better," George Hawkins said.