Managing gifts and other sensitive expenditure
Sensitive expenditure is any expenditure that could be seen to benefit an individual personally.
To be clear, it doesn't mean that it actually does benefit someone personally – it means that people might think that it does.
Examples include travel (including overseas travel), principal expenses, board expenses, and staff Christmas parties.
A school board is a Crown entityopen_in_new, which is basically an organisation that receives public funding and is part of the New Zealand public sector.
Because schools receive public funding, there are certain things that school boards must do and laws they need to follow.
The following guidance to Crown entities around "sensitive expenditure" is provided by the Office of the Auditor General.
It relates to donations, koha, personal use of communications, technology, and gifts.
What should your board consider before approval?
Any gifts or other sensitive expenditures should be carefully considered before approval.
Your board's rationale for approving any gifting or sensitive expenditure should be recorded in the meeting minutes.
Your board must be satisfied and able to show that:
- The payment or benefit will further the aims of the school.
- Your board could justify the payment or benefit to a taxpayer or parent.
- The school will not be at risk of negative publicity over the payment or benefit.
- In the case of sensitive payments, there will be no (or minimal) personal benefit for the staff – either actual or perceived.
- The payment or benefit represents the best value for money.
- Your board has the budget to make the additional payment or benefit.
What are donations?
A donation is a payment (in money, goods, or services) made voluntarily and without expecting to receive goods or services in return.
Issue and principles
The Office of the Auditor General expects you to ensure that:
- Donations are for purposes consistent with the business of the donating entity
- The size of the donation is appropriate in the circumstances.
Preserving impartiality, integrity, and moderate and conservative expenditure are particularly relevant.
Donating should not result in any obligation on individuals or entities other than using the donation for its intended purpose.
Guidance
The Office of the Auditor General expects donations to be:
- Lawful in all respects, including complying with Parliamentary appropriations
- Disclosed in aggregate, where required (basically, recorded and reported)
- Made to a recognised organisation by normal commercial means – not to an individual and not in cash
- Non-political
What is koha?
Koha is a gift, token, or contribution given on appropriate occasions.
Issue and principles
The issue associated with giving koha is that it is not a transaction in the usual sense – for example, there is often no written acknowledgement of receipt.
The principle of a justified business purpose is particularly relevant. Your board and school need to have a policy on (and control over) giving koha.
Guidance
The Office of the Auditor General expects your board to ensure:
- Your policy on koha includes the means of determining the size of any koha
- A koha reflects the occasion
- Koha is not confused with any other payments made to an organisation
- Koha is approved in advance at an appropriate level of authority
What is communications technology?
Communications technology (such as mobile phones, email, and other devices with access to the internet) is widely used in the workplace.
While some level of personal use of this technology may be unavoidable (like dealing with a family emergency during work hours), excessive use incurs costs that are a diversion of public money.
Such costs include lost productivity (including incoming personal emails and phone calls) and the direct cost of the technology.
Issues and principles
The risk associated with personal use of communications technology is the possibility of excessive use.
Your board and school should not install communications technology exclusively or predominantly for personal use by staff.
Another risk is technology being used for a purpose not consistent with the goals of a school (for example, internet access to download or share inappropriate material).
Any personal use of communications technology must be managed through adequate controls and regular monitoring, and reporting.
Guidance
The Office of the Auditor General expects your board to:
- Have a policy on personal use of communications technology that staff are well informed of.
- If it's administratively possible and cost-effective, require reimbursement of personal use of communications technology.
What are gifts?
A gift is usually given as a token of recognition of something provided by the recipient.
Gifts may be given by a public entity (such as to an employee for long or outstanding service, or in cultural settings when the giving of gifts is customary) or may be given by another organisation to a public entity or an entity staff member.
Gifts usually take the form of some tangible object but might also be in the form of privileged access to goods or services (for example, free use of a corporate box at a sporting event).
Issues and principles
The significant risks of gifts include:
- The value or nature of a gift is inappropriate or excessive
- The gift is given in explicit or implicit expectation of a favour in return
- The gift is given in substitution for legitimate payment or remuneration.
Guidance
The Office of the Auditor General expects your board to have a policy on giving gifts, including specifying the purposes, occasions, nature, and values that are appropriate.
Receiving a gift is not strictly an issue of sensitive expenditure because it does not involve expenditure.
However, receiving a gift is a sensitive issue, requiring careful management.
It is essential that receiving a gift does not alter your board's (or a board member's) decision-making.
Your board should:
- Require receipt of gifts (except for inexpensive gifts openly distributed by suppliers and clients) to be disclosed and recorded in a gifts register.
- Allow staff to personally acquire only infrequent and inexpensive gifts openly distributed by suppliers and clients (for example, pens, badges, and calendars).
- Have a policy regarding receiving gifts that defines "infrequent" and "inexpensive."
Questions your board could ask
- Do we recognise what constitutes a gift or other sensitive expenditure?
- Do we record the rationale behind, and approval of, any gifting or sensitive expenditure in our board meeting minutes?
- Do we have a sensitive expenditure policy in place?
Templates, resources, and references
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