Council's coffee culture

The Dunedin City Council has acknowledged millions of dollars of credit-card spending, prompted by an Otago Daily Times inquiry. Questionable purchases, staff apologies and disciplinary action are in the mix. Chris Morris reports.

Senior Dunedin City Council managers have run up more than $500,000 on their council credit cards in the past three years.

Details of the council's credit-card spending were disclosed to media at a briefing fronted by council chief executive Jim Harland yesterday, prompted by a request for information by the Otago Daily Times a month ago.

The figures showed council staff had access to 206 credit cards, of which the top 36 managers - and four personal assistants - had together swiped their way to a $534,500 bill in the past three years.

  • Further details in today's Otago Daily Times

Total spending across all credit cards was expected to total "probably a couple of million or more", Mr Harland confirmed.

He said the use of credit cards was the "most efficient and cost-effective" way of accounting for council transactions.

A detailed 146-page breakdown of council spending, released yesterday, covered purchases by the top 36 managers and four PAs, and included $100,500 (19% of the total) spent on coffee, food, entertainment and drinking.

Mr Harland defended most of the spending as "legitimate expenditure" yesterday, but admitted about $7000 was by staff meeting in nearby cafes.

"There may be a question-mark as to whether it's appropriate."

The revelations had already prompted apologies and voluntary repayments by "one or two" managers, he said.

"I have had one person come to me personally and apologise in my office," he said.

More could also follow suit when other managers were spoken to about their spending "in the very near future", he said.

Other managers had been encouraged to examine their records and consider making voluntary repayments if required, he said.

"There will be obviously more vigilance looking ahead."

Unauthorised spending of less than $10,000 had also led to disciplinary action against one staff member in the past 18 months, he confirmed.

The staff member involved no longer worked for the council, in part because of their spending, and details had been referred to police, Mr Harland said.

He would not reveal further information about the case, including whether the staff member was dismissed or resigned, citing a confidentiality agreement.

Part of the test when considering whether coffees and other expenses was "necessary business expenditure" was whether scrutiny of it would "survive the front page of the Otago Daily Times", Mr Harland said.

"It is ratepayers' money ... That is a test we should all be able to meet," he said.

Reality check.

Transparency is where the information is readily available to anyone who can be bothered looking at it, i.e. they don't have to beg for it, or lodge formal applications and pay for it.

Excluding peoples' ignorance of their rights, it is freely available to anyone who can be bothered looking for it. Any individual, at any time, can make a request under the Local Government Information Act. However, the DCC (or any local government agency) is entitled under the s150 of the Local Government Act to charge for time spent responding to information requests from the public. Most Government agencies seem to give you the first half hour free of charge.

I agree with Mike Stk - real transparency costs very little these days, and the disinfectant properties of sunshine will make sure the stench of corruption is no longer a concern.

Half an hour per record, to scan the record, check the record to make sure there are no identifying details on the record, electronically file it, upload it to the appropriate server, and make the appropriate website adjustments.
206 records per month = 103 hours per month, roughly 2.5 full-time equivalent staff. For what? Another level of beuracracy?

Congratulations

An updated calculation,
Using updated information,
From an updated article.
See the trend emerging here?
At the time I made the comment, the way the article was written suggested the spending that I based my calculation was the entirety of it (and clearly, I'm not the only person that believed that).

Transparency

Transparency is where the information is readily available to anyone who can be bothered looking at it, i.e. they don't have to beg for it, or lodge formal applications and pay for it.

Information about a business that could give useful forewarning or signal a commercial opportunity, discussed where only a few people could overhear, is not transparency.

And if it were discussed where certain people could overhear to give them an advantage over others, there would be no evidence of an arrangement where one person was doing a very big favour for another.

I do not suggest that this has happened yet, or that it necessarily would happen. With luck there are no rotten apples in the barrel - though wasn't one employee already dismissed over credit card misuse?

The current attitude from the top down towards staff holding meetings all over the place provides an opportunity for another rotten apple to get involved in corruption. There is no need to offer weak-willed people such a tempting opportunity on a plate.

I agree with Mike Stk - real transparency costs very little these days, and the disinfectant properties of sunshine will make sure the stench of corruption is no longer a concern.

For just $2 per day? I think not...

Time to do the maths. $4.8 million over three years is $1.6 million per year.
Divide this by 225 working days (ie.365 days per year, less weekends, statutory days, annual leave of 4 weeks, and sick days, maybe 5?) is $7111.11 per working day on all 206 credit cards, or $34.51 per working day per individual credit card.

Hmmmm....now the numbers really mount up.

Dishonesty

"Nothing smells more of corruption than taking positive steps to prevent a recurrence" - Um, excuse me, you're saying we should never do anything about corruption because it would look like there was corruption going on?
I'm sorry, this attitude of "if we just sweep it under the carpet no one will notice" is not good enough.

You're blatantly misrepresenting my statement.
Thanks for playing though. I'm sure the ODT appreciates your input at the very least.

Re: For just $2 a day

Trippy (23/7/10) worked out that credit card spending by the DCC was only $2.37 a day over the three years, but he/she is only taking into account that amount spent by the 36 managers on their DCC credit cards.

In fact, the total spending on all 206 credit cards (managers and others) was $4.8 million.
I haven't done the maths, but that's a lot more than $2.37 per day over three years.

Corruption

"Awfully big assumptions"? My whole point was that size has nothing to do with it - it's an attitude we need to foster.

"Nothing smells more of corruption than taking positive steps to prevent a recurrence" - Um, excuse me, you're saying we should never do anything about corruption because it would look like there was corruption going on?

I'm sorry, this attitude of "if we just sweep it under the carpet no one will notice" is not good enough.

New Zealand continues to rate as one of the least corrupt countries on international lists - it's something we should be proud of. I hope we stay that way, and to do that we need to root out the little stuff before it grows into bigger things.

PS: You forgot Mr Harland's rugby tickets in your list; now that's a junket if ever I saw one

Re: coffee meetings

@ Hype.O.Thermia:
You're making a number of assumptions here, for example:
"Small groups could make coffee at the work facilities - note facilities plural - and take an extra chair into an office if a meeting room was not available instead of ambling through town to their favourite cafes."

Here you assume that all the meetings were between groups of staff members only.

"They are discussing business while they walk? I don't think so - not very efficiently while they negotiate traffic and other pedestrians. "
Nothing more than an assumption.

"Another thing: can they - should they - discuss DCC business in public places where anyone could overhear?"

So which is it then, greater transperancy or not?

Hype and hyperbole.

Those are some awfully big assumptions you seem to be making.
Read the article again.
$7000 of 'questionable spending' in the form of informal business meetings over a cup of coffee at a local cafe.

In other words, a 'marginal' business expense, that has resulted in the expense guidelines being re-drafted.

One employee, who ripped less than $10,000, who's details have been forwarded to the police, and has been dismissed from their position.

Yes. Because nothing smells more of corruption than taking positive steps to prevent a recurrence.

Coffee meetings

The cost of the cuppas is only part of the story. There is also the waste of time during working hours, and that is perhaps even more significant.

Small groups could make coffee at the work facilities - note facilities plural - and take an extra chair into an office if a meeting room was not available instead of ambling through town to their favourite cafes.

They are discussing business while they walk? I don't think so - not very efficiently while they negotiate traffic and other pedestrians.

What happens when someone else wants to get hold of them while they are off on cafe missions?
Do they normally sign out when they leave the workplace? Is there any check on how long they take and whether these coffee forays include side trips to do a bit of shopping and go to the bank, such as other people have to do in their own time?

Another thing: can they - should they - discuss DCC business in public places where anyone could overhear?

Corruption is not about the numbers

You've got this oh so wrong. Corruption is not about the numbers - it's an attitude.

You seem to be saying "rorting the system is OK provided you don't do it much". I think that's so wrong - that's just the top of a terribly slippery slope.

We don't want any of our employees rorting our money, be it 10c a day, free rugby tickets, or $10 million a day.  We want to hire honest, upright people who will guard the public purse rather than dip into it for coffees or their pet projects, like stadiums.

Speaking of ineptitude

The extra 27c a day makes all the difference (10 Sick days + 4 Weeks Annual Leave + 11 Statutory Holidays - this of course assumes they take all leave available to them).

As far as silver-tongued rhetoric goes, it was nothing more than an attempt to throw a little rationality and perspective into an emotional argument.

Inept assessment

Such an easy calculation, Trippy, but what makes you think these people work 365 days a year? Sounds like the same old 'silver-tongued' rhetoric we usually get to placate the 'know-nothing great unwashed'.
More indepth analysis is necessary, I think.

For just $2 a day

That's right, for just $2.37c a day, you to can have your own scandal and headline.
$534,500 over three years is $178,167 a year. Across 206 credit cards it is $865 per credit card, or $2.37c per day, per card.

Perhaps while we're at it, we can also begrudge Sid Adie the tea and scones the council provided for him (ironicaly, probably with one of these credit cards).

Council's hot cross buns

ODT, lets move on and stop hyping up the situation on council credit card spending. $34 on hot cross buns is hardly newsworthy.

Improving staff morale through presents and activities is commonplace in the private sector and can be very good value when compared to the salary budget and potential productivity gains through an engaged workforce.

Also, at times cafes are a great and effective place for informal meetings.
Yes, you probably have identified a few discrepancies, but doesn't justify two days of full front page. Lets hope there is something new to read tomorrow.

 

Coffee culture

It is true that cultures start from the top and trickle down. We have a tendancy to feel that whats good enough for the chief is good enough for the indians.

As we have such a free-spending council it would be expected that those that work for them would jump on the band wagon. The fact that it's not their money seems to be an incentive to spend with this council.

Please people, vote them out and have a clean sweep at the next opportunity. Its the only way we will get a new culture happening.

But be care ful who you vote in. We dont just want a change of names. We want a change of attitude.

Coffee meetings

At first glance it seems bizarre that with kitchen facilities readily available at work, people are choosing to use their credit cards to meet their colleagues at a nearby cafe.

Either they are in the grip of entitle-itis culture or there is another reason, such as feelings of insecurity discussing anything of importance at work because of an over-controlling atmosphere.

Where people feel they cannot discuss matters to do with the workplace freely without risk of being seen, heard and censured, they alter their behaviour.

I think it might be worth examining this hypothesis before condemning them for extravagance. It's a long shot, nonetheless possible.

Some workplaces suffer micro-managing and a culture that punishes "dissidents" from the party line, and in such cases it is the culture from above that needs to be addressed before the reactions to it can be understood and altered for the better.

Another bizarre mayoral comment

So we have a mayor that makes a pre-judgement that the councils credit card spending is OK, without even bothering to actually look at what that spending is.

Clearly he is happy to make a judgement, and defend the council, before he has actually looked at any evidence.

It seems that the mayor is not doing the job he is paid to do.
He is paid by ratepayers to represent them to the council.
He is doing the opposite. He is representing the council to the ratepayers.

Release the data

Congratulations on making the request. I was hoping the ODT would make the obvious next step in the national MP credit card debate and ask the council for their receipts. Well done, and you've saved me the trouble of doing it myself.

I bet it's a lot of data, probably too much to analyze all of it in depth. To make it worse, you're missing the other half of the data - the work or private expenses that were paid on private cards and expensed later - that's reputed to be more telling.

I realise that you went to some effort to obtain and analyse the data, I hope that when you've finished running your series you'll release the underlying information so that it's further analysis can be crowd-sourced by the city's citizens.

After all, we the citizens didn't just pay the bills on these credit cards. We also paid to have the data you just received collated and delivered to you.

Really the city should provide this information to the citizens as a matter of course, without being asked. Every month it should just go up on their website for citizen oversight.

Mr Harland (and his rugby tickets) are obviously a bit surprised by what you've uncovered, I'm sure that from now on he'll have to keep track of this spending every month, anyway.

Council spending should be transparent. Otherwise, how can we judge the actions of those who we elect and the mayor's judgment in who he or she appoints?

No surprise here

We ought not be surprised at the revelations of the 'council's coffee culture'. After all, there is a pervasive culture of entitlement alive and well in city hall.

Many people would query why staff have credit cards at all. But 206 cards available to all and sundry? 3400 transactions by 36 managers? $2 million plus spent! What unbelievable gorging at the trough.

Mayor Peter Chin can't absolve himself from these excesses. As our elected representative, it is his duty to protect us from this sort of behaviour. [Abridged]

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