Dept overspent $9 million

Press, 8 April 1988, Page 1

Dept overspent $9 million

By

OLIVER RIDDELL

in Wellington

An over-expenditure of $9 million by a new (Government agency — the Conservation Department —| is shown in its first year. This is embarrassing the wider Public Service, which is in the throes of being reorganised. A month ago the Treasury was told that the department would be about $9 million over budgeted expenditure for 1987-88. By not paying some expenses for last month the over-expendi-ture was held at $9 million, but at the cost of deferring 1987-88 expenditure to 1988-89. Not only the over-expenditure is embarrassing the officials — but also the way this occurred without being picked up by the accounting system. “The Press” has been told that some sections of the department are well under budget while others are! well over. Officials asked about this have kept silent. The Treasury has been told some sections were asked to hold down expenditure in the interests of the department, while other sections weire not restrained. This has] made analysing why the over-expenditure occurred hard for the Treasury. Specific allegations, such as

allowing) over-expenditure on head office) fittings, are also being looked' into.

Part of the department’s problems have arisen from a failure to achieve the revenue targets set, although a poor ski-ing season last year contributed to this. | ; The department is now arguing with the Treasury as to whether: the [2O per cent penalty for over-expenditure should apply, this [being the cost a department faces in borrowing from the Treasury to make up any deficit, j : [ Conservation Department officials: are more concerned about the nature of the overexpenditure than the fact That it exists. :They have told the Treasury that the original; estimates reflected the needs and liabilities with which the department was saddled. [

' The department began work on April 1 last year, as the world’s first , department of conservatiqn with no other responsibilities pr purpose. , The was given an initial budget of $109,382,000 in the 1987 Estimates, topped up with $5,680,000 in the ! Supplementary Estimates.

Those figures were reached by combining the cost of staff, !ser-

vices and liabilities which were transferred from other agencies to the new department. The then Minister of Conservation, Mr Marshall, warned that keeping to a precise budget r would be impossible in the circumstances.

The department’s officials think it will be hard to estimate for 1988-89 what the budget for the department and each of its sections should be now that the 1987-88 accounts seem not to reflect the department’s real work. These matters have to be worked out at a time when the Government is considering whom to appoint to head the department.

The Government is being urged to appoint a person with managerial rather than conservation qualifications now that the first Director of Conservation, Mr Ken Piddington, has left to take up an advisory post with the World Bank in Washington. Replacing him has led to an argument between those who want a manager and those who think a conservationist of world standing should be appointed.

The new head would be a Cabinet appointment, coming under the terms of the State Sector Act just passed by Parliament. '