A $20 million blunder
The Press reports:
Senior public servants failed to pick up a payment blunder for more than a year, costing the Ministry of Education more than $20 million.
The mistake occurred when a 4 percent funding boost to about 2000 early-childhood centres was allocated twice in the same round, meaning more than $20 million was over-spent.
An internal report obtained under the Official Information Act said human error involving an inexperienced and overworked ministry staff member led to the original funding mistake.
It was compounded by a poor peer review that meant the error went undetected for 14 months.
My question is, where is the accountability? If you worked for a private company and you made a mistake that cost the company $20 million, you would no longer be working there.
September 19th, 2009 at 7:54 am
“If you worked for a private company and you made a mistake that cost the company $20 million, you would no longer be working there.”
Public bad, private good? Or is it just that private companies don’t have to worry about the Official Information Act? And even then there are surely examples of a few bankers and financial company employees who may have been responsible for a few bob going down the gurgler who are back into bonus territory already “to keep the wheels turning”.
I am sure there are plenty of other examples. How many employees of PGGW are still working there after the Silver Fern Farms Fiasco? Or maybe directors don’t count.
September 19th, 2009 at 7:59 am
“If you worked for a private company and you made a mistake that cost the company $20 million, you would no longer be working there.”
In most cases the company quite probably wouldn’t be there.
September 19th, 2009 at 8:04 am
Surprising since the former chief was an ex Treasury official and one of the senior team is also an ex Treasury official.
September 19th, 2009 at 8:07 am
Surprising since the former chief was an ex Treasury official and one of the senior team is also an ex Treasury official.
True – Treasury mistakes tend towards the hundreds of millions of dollars instead of chump change like this.
If you worked for a private company and you made a mistake that cost the company $20 million, you would no longer be working there.
Snort. What kind of private company? A property development company? A merchant bank? An insurance company? And automaker? If you work for a private company and lose $20 million dollars they might fire you, but they also might make you a director.
[DPF: In any of those companies if you are responsible for giving away $20 million of your owners money by accident, you would be gone. This was not a bad investment decision. This was not a wrong call. This was just giving away $20 million more than had legally been allocated. It is like overpaying a supplier by $20 million]
September 19th, 2009 at 8:18 am
Can you sack someone for overworking them? Oh right, that would indicate some employer culpability.
September 19th, 2009 at 8:40 am
This is anything but surprising. The Ministry of Ed has gone from approx 500 to approx 3000 staff from 2004 to 2008. The HQ in Wellington looks like some weird advertisement for positive discrimination (or a Weta workshop) and this is where most are housed; likely average salary of say $80k [TEC has 500 staff & over 100 of them are on over $100K]. Still not sure what any of the extras do!
They demonstrate more than any other Ministry the worst aspects of the last administration, over paid, over staffed lacking ability and unneeded to ensure decent outcomes for NZ students.
All this whilst their front line staff are under valued, only the old remain teaching, the regions are being over run by transplanted Brits bringing their failed models and styles and the Minister of Finance has ruled out any help i.e. there are full time degree qualified Polytech tutors earning less than kindy teachers and teacher aides, whilst the Ministry snouts are pigging out.
AND the Minister of Finance is taking close to a low paid teachers (polytech) salary as a housing allowance. No wonder these people are pissed. Fools in Wellington, surprise, surprise, surprise?
September 19th, 2009 at 9:03 am
As already pointed out, in the private sector you’d be rewarded or promoted, unless you were just a low level overworked staffer, like this poor bugger.
You also left out the most critical point from the article, In the first peer review of the funding rates, another official had written: ” I haven’t checked most of this gigantic spreadsheet and I can only assume that all inputs have been updated and all links are linking to the right places.”
I have lost count of the number of times I have seen major business fuckups because a spreadsheet was used to the job of a database. I will now use a database to keep count of the stuff ups.
September 19th, 2009 at 9:03 am
Well I’m amazed that so much allocation is driven of a bunch of linked spreadsheets. FFS!!!!
Just as importantly I’d imagine that there is stacks of policy and HR people available and being paid so why is the knowledge all in peoples heads and no discipline in the processes. The policy & HR vampires should also be in the spotlight to justify their existence.
September 19th, 2009 at 9:08 am
The irony in Mr Farrer huffing and puffing about accountability in the public sector (a sector in which internal financial controls are generally very tight, and in which the personal mores of the vast majority of the staff are of high standard) when we have just observed global private sector profligacy and corruption, requiring vast expenditure of public funds to rectify privatesector errors, is striking. The $20m ‘blunder’ will be promptly rectified and is regrettable. But, really, let’s not be too precious about this. But, I forget, balance is not the issue. Private sector good, public sector bad; private sector good public sector bad……………….
September 19th, 2009 at 9:30 am
$20 million, peanuts, try $3.6 billion in bonuses paid out by Merrill Lynch late last year, just before that firm was taken over by Bank of America.
Judge Rejects Settlement Over Merrill Bonuses
The ruling forces the commission to go back to the drawing board in its case against the bank, which focused on $3.6 billion bonuses paid out by Merrill Lynch late last year, just before that firm was taken over by Bank of America. Neither company provided details of the bonuses to their shareholders, who voted on Dec. 5 to approve the merger.
The judge focused much of his criticism on the fact that the fine in the case would be paid by the bank’s shareholders, those supposed to have been injured by the lack of disclosure around the bonuses.
September 19th, 2009 at 9:34 am
If the employee is inexperienced surely there should be supervision when large amounts of money are involved. The fact he or she is still in the job might have have more to do with reflection on those higher up.
September 19th, 2009 at 9:35 am
OK we give up, this is obviously the Groundhog version of April Fools Day, jokes over.
If my business suffered even a 20K loss we have procedures and systems in place to find the leak and plug it quick, MOE obviously doesn’t employ accountants amongst the vast number of overpaid desk fillers they have, hell it’s only 20 mil.
Anne Tolley needs to start on Monday morning with a fucking BIG axe, and when she has culled what is certainly a bloated workforce by 50% we might start to get value for money.
A good guideline for the axe would be the ones that squeal first and loudest get the biff first, as they are usually the ones with fuck all to do but make noise, then anyone with the word policy or analyst in their their tittle.
In the mean time we still have a school system that prides itself on generating kids who can neither read nor write.
When she has finished with the axe there is a whole bunch of other govt depts who could borrow it from her, no fuck it, we are showing such signs of wealth we could afford one for each department.
I bet the silence on Red Alert is deafening.
September 19th, 2009 at 9:40 am
Old story. ” fools and their money are soon parted”. Also emphasizes that we are grossly overtaxed for churn that is unaccountable, a subject which leads on to the need to remove the beauracy and get our taxes back down. Unemployment is a much cheaper option than employing people to do nothing at a high cost.
DPF, you grumbled at me the other day for pointing out we needed to lower our taxes asap but here is a classic case of waste. Not only the policy of doing for people what they should do for themselves,i.e. pay for their childcare(and thats an even worse situation right now where the unemployed or can’t be bothered are still sucking the tit to have a respite from their kids. I have tenants like that and its prevalent) but also employing 500 people to supervise that behavior.
There is a lot more hardening up needed yet by those that are paid to run NZ Inc.
September 19th, 2009 at 9:50 am
It is always interesting to observe the violence in language used – axe, culling, the abattoir images, biff etc. (@ Scanner) when self-appointed representatives of the private sector talk of the public sector. Yet it is the same sector that goes running back to the public sector for support when things get tough – which is exactly what has happened across the globe over the last year or so, as the tax payer has propped up, pretty willingly and generously, a financial system, run by the private sector to tremendous personal advantage, which has been run like a fairground concession , to the detriment of the rest of us. How to bite the hand that feeds…….
September 19th, 2009 at 9:51 am
Ministry of Education are not so smart.
Well, that makes me feel better about them educating our kids.
Sack the imbecile responsible, sack the imbecile in charge of the first imbecile, and reprimand the CEO so they realise their contract won’t be renewed. Find someone overseas to replace them, and give the department a big purge.
September 19th, 2009 at 9:55 am
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10589638
‘Bank worker responsible for $10m blunder sacked’
September 19th, 2009 at 10:35 am
As I have learned recently there is *no* accountability in the public service.
When my wife had a serious accident recently, requiring (in the words of the orthopedic specialist) “extensive surgery”, ACC dropped the ball completely.
Not only did we not receive any income-related compensation for weeks after the accident but they also failed to send us important documents advising us of our rights and responsibilities and failed to provide any form of home-help or assistance.
As a result, I was forced to take three weeks off work to take care of her — at enormous expense to my own business. It effectively reduced our household income to zero for nearly a month.
We were also unaware that, even months after her injury, that she was entitled to be assessed for assistance in the form of special devices and appliances that would make it easier for her to perform routine activities (like wiping her own backside after going to the toilet — yes, that was one of *my* jobs).
When we finally met with ACC and I queried who was responsible for completely stuffing up the handling of our case, I was told that nobody was to blame — it was just one of those things.
I told them that if they considered such appalling service to be “just one of those things” then there would be nothing to stop others having to receive similarly unreasonable treatment.
They said that our experience would be used to improve the system.
Well that’s a load of BS.
Systems don’t make mistakes or fail to do the job they’re paid for — *PEOPLE* do.
However, it seems that the ACC doesn’t have a culture of “blame” it has one of “duck and cover — blame the system”.
Of course they *are* effectively a monopoly provider so they don’t have to deliver on their promises or even fulfill the mandate to ensure a good outcome for the patient.
They extract money under duress from every wage and salary earner then spend as much time as they can trying to weasle-out of anything that might actually involve them spending a small portion of that money on helping accident victims.
They have even effectively demanded that we change GPs because there are others closer to us than our current doctor and they refuse to pay mileage for travel needed to obtain essential post-operative treatment.
They also refused to pay for specialist handcare treatment at Waikato hospita — claiming that it was “just physiotherapy” and that we could get it here in Tok. After a very terse letter from the specialist surgeon who operated on my wife, they grudgingly conceded that it wasn’t just physio and was essential to her recovery.
They have also been strongly pressuring her to go back to work — after just two months — despite the fact she’s suffered two bilateral wrist fractures (plated and screwed) plus a chipped bone in her anke. According to ACC, “their manual” indicates that a “broken wrist” should be fixed enough to return to work in 6-8 weeks.
Well *two* seriously fractured wrists *and* a busted ankle are a whole lot different to “just a broken wrist” — but their operations manual doesn’t reflect that fact. Again, after coming under incredible pressure to get back to work (when she is still suffering significant nerve-damage from the operation, isn’t allowed to drive and can’t walk confidently (can’t use crutches with two bust wrists!) we had to get the specialist surgeon to write a letter advising ACC of their stupidity.
The old sheila is distraught because ACC is trying to make out that she’s attempting to defraud the system by claiming a measly $240/week in earnings related compensation while still incapable of wiping her own backside.
And is anyone “responsible” for this nasty attitude and incredibly poor performance on the part of ACC?
Of course not. After all, when you’re a monopoly, nobody has to be responsible.
September 19th, 2009 at 10:52 am
What makes you think it was a mistake? Many government departments have been wallowing in the swell over the last decade and no doubt have become “accustomed” to helping themselves. So what do they do when their worst nightmare gets voted in. No more fingers in the cookie jar. The top dogs in a desperate attempt to save their sorry butts suddenly find huge accounting errors, no ones fault of course, just a small oversight. Sack the lot of the blood sucking ticks.
September 19th, 2009 at 11:02 am
Hmm – ‘blood-sucking ticks’ – thoughtful.
September 19th, 2009 at 11:16 am
SG says:
Sack the imbecile responsible, sack the imbecile in charge of the first imbecile, and reprimand the CEO so they realise their contract won’t be renewed. Find someone overseas to replace them, and give the department a big purge.
So, if I understand this, everyone who makes a mistake is an imbecile and must be sacked. Liability is absolute. No mistakes are permitted, ever.
People who supervise people who make mistakes must also be sacked, whether or not it is reasonable for the manager concerned to know every detail of every job performed by the (15 or so?) people under direct control. They are also imbeciles.
People who manage that person … etc.
until at last … the incumbent CEO must not have their contract renewed, and no kiwi is smart enough to apply for the job.
Right. I’ve got it now.
September 19th, 2009 at 11:18 am
I disagree DPF. Not because of the drivel some above have posted about companies that have lost billions of dollars, I see that as reasonably irrelevant. But more because in my experience the private sector don’t fire someone for a first time mistake, and particularly not for a mistake in a situation where:
– they are junior and overworked
– they are clearly using the wrong tool for the job (a spreadsheet to allocate money on a regular basis??), and management will have told them to do that
– management were clearly aware of the situation
– the peer reviewer also failed to do their job, at least partly because the tool was wrong, but also it looks to be partly because of laziness or overwork
– the review notes clearly stated that, so somebody more senior knew that had happened
In short, it is largely a management failing that I see here, and management don’t usually like making themselves accountable, irrespective of what sector you work in.
September 19th, 2009 at 11:31 am
Robert Winter – as the self-appointed representatives of the private sector talk of the public sector, I felt it only fair to respond, my business has never been back to the public to be bailed out as you richly put it, unlike the public sector who through mismanagemnt , lack of planning, ineptiude, or just bad decision making seems to have no problem coming back to me for a bail out, ie GST increases, dicking with personal and company tax, rate increases, together with providing a free book keeping service for the IRD and ACC.
When you manage to extract your head from your own anus and look around you may see thing a little differently, in the mean time perhaps stick to your catoons.
September 19th, 2009 at 2:36 pm
@ Scanner: again, most thoughtful and insightful.
@PaulL: your focus on management capability (and the possible lack thereof in New Zealand) is spot on.
September 19th, 2009 at 2:51 pm
The MoE is long overdue for a restructure and removal of deadwood.
September 19th, 2009 at 3:21 pm
aardvark – our sympathies are with you and your wife, its is a tragedy there is so much arrogance, disinformation, and lack of humility spewing out of this organistation: MONOPOPLY + TAXPAYERS $= RUBBISH OUTCOMES FOR CLAIMANTS! Sounds like your self-emplpyed, well you will get treated like shit, as ACC thinks self-employed are a bunch of bludgers, however I dont think they have any rights to judge here, that is not in their mission statement. However the staff they employ carry this out with evangelical enthusiasm, spurred on by the ACC procedures manual rewritten by the socialists infesting the last govt!
September 19th, 2009 at 3:23 pm
Huh, Robert re your 9.08, do you think if you repeat enough times that right-wingers welcomed the bailout of bankds and businesses, people will believe it?
September 19th, 2009 at 3:27 pm
My sympathies are with you also aardvark, as a kid I remember my self-employed father being under enormous pressure from his ACC levies, the type ofwork he was doing made for a high rate of charge, it ended up ruining him with ACC putting him into liquidation.
When it came time for him to make a claim after getting shrapnel in his eye in an accident however, fucking hell! Happy when they are leeching money of the hard-working, but when it comes to making a claim the self-employed can get fucked.
September 19th, 2009 at 3:52 pm
BHarmer – a $10,000 mistake deserves a reprimand. A $20 million mistake deserves a sacking. Clearly the systems and checks are so flawed at MinEdu that more than one person deserves the boot. If the supervisor failed to pick up on such a big mistake, then yes, they should go.
$20 million went down a hole. On the average income of $42000 (approx), $7630 in income tax is paid annually. To cover this $20 million in wasted spending, thats around 2640 New Zealanders on an average income who will pay all their tax for nothing at all.
Thats why, imbecile or not, someone ought to be fired. NZ has enough financial concerns without this kind of egregrious stupidity costing our fellow countrymen and women even more.
September 19th, 2009 at 4:00 pm
If the early childhood centres have been overpaid what is the scope to recover the overpayment I wonder?
Or just cancel their funding for this year.
September 19th, 2009 at 5:00 pm
Given the number of redundancies throughout the public sector, and the fact that National wants public servants to make do with less and does not want to see pay any rises because we’re in a recession, etc, etc, is it more or less likely that we’ll see more of this sort of thing? As for accountability, doesn’t the buck stop with the Minister?
September 19th, 2009 at 5:15 pm
Maybe every single govt dept should have a dedicated ombudsman complete with support staff who’s funded by vote [dept].
Maybe the selection criteria for said ombudsman should be the person who’s been fucked around the most by said dept in the years immediately preceding the commencement of their term. To be elected by simple majority public vote with any registered voter allowed to vote.
Maybe the ombudsman’s powers should include the ability to demote, fire and publish the names of any dept official who’s found guilty of failing to act in the most efficient proper manner in accordance with the dept’s terms of reference.
I imagine Graham Henderson might want to stand for the IRD position. Imagine the fight for the Justice ombudsman.
September 19th, 2009 at 6:17 pm
If we halved (at least) the number of bludgers sucking off the taxpayer in the public service you might find less mistakes and more effective organisations. The main problem with most bureaucracy is overcomplicated systems to justify the extravagant number of employees they have. Everyone’s focus is on justifying their jobs rather than whatever the real purpose of their employment is.
September 19th, 2009 at 6:45 pm
AArdvark. Unfirtunately your story is not unusual. Ask any self emploed person who has the misfortune to have an accident.
My son in law, a bricklayer burst a disc in his back in January. ACC denied the claim (which also affected his private insurance) for nearly 2 months until a complaint was made on their complaint line and then they ignored his DR’s assesment and proceeded with the wrong types of treatment. Finally seeing a proper specialist( after a 2 month wait), he needed and MRI which they knew all along. so more delay. Now on month 9 they have sent him to a phsyciatirst. For pain management. 6 sessions to sort his head out and then he is required to go back to work on their instructions, not the specialists.
They are like Atilla the hun with a thousand processes.
Time some sunlight was poured into that outfit.
Yeh that’s right Nick was gonna do that. I’d forgotten. Must have been preoccupied with his Carbon Fibre Scheme. Maybe that is to make better somethings for ACC.
September 19th, 2009 at 7:20 pm
Christ folks get real, if we sacked people for wasting a mere 20 mill we would not have had a government for the last 50 years!
September 19th, 2009 at 8:43 pm
Where else but the “public service” would an inexperienced employee be responsible for, or have had discretionary control and no oversight for amounts like $20 million?
This is both farce and outrage. The latter, obvious – farce lies in the fact of such excuse being tendered in the thought it would be found somehow acceptable.
September 19th, 2009 at 9:06 pm
lol Marxists defending the wasteful state sector.
September 19th, 2009 at 9:22 pm
Still not a sound on RED ALERT, come on Trev, cat got your tounge, what a chance to give one to Key and his govt, whoops sorry almost forgot looks like it happened while you fellas were driving, never mind shit happens.