Defence Force slammed over illegal allowances

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The Defence Force has been severely criticised by Auditor-General Lyn Provost for the way it handled a case of wrongly claimed allowances by officers seconded to the United Nations.

In a report presented to Parliament today, she also questioned values within the New Zealand Defence Force (NZDF) which allowed a belief to develop that any officer could be ordered to commit an unlawful act.

"This issue was mismanaged from start to finish," she said in her report.

"The policy process was slow at every point and provided advice that was either flawed or totally wrong."

The previous government asked the Auditor-General's Office to investigate the payment controversy and look at the causes of the problem.

There had already been a military Court of Inquiry which reported on how four officers seconded to the UN between 2001 and 2008 had wrongly claimed accommodation allowance by submitting false declarations.

Ms Provost said "too many people" told her own inquiry that the command requirements prevented them from raising concerns about the integrity and legality of what was being done.

"And too many people accepted it as plausible that they were being directed to behave unlawfully," she said.

"The four seconded officers - all highly-regarded and senior people - were all willing to accept as plausible that NZDF headquarters was expecting or ordering them to complete a false declaration to manipulate financial entitlements."

Ms Provost said she found it extraordinary that any officer could see this as something that NZDF headquarters might require of them.

"The fact that they did raises a question about what values they are implicitly picking up as being important to the organisation."

Ms Provost said the inquiry team concluded that three aspects of the organisational culture in the NZDF headquarters contributed to the problem:

* A strong silo mentality which enabled people to see the issue as someone else's problem;

* The military discipline of hierarchy and command lines, which enabled people to see it as inappropriate for them to question decisions apparently taken by their superiors; and

* A general desire for practical solutions to problems, and an inadequate recognition of when those solutions may conflict with fundamental public sector values relating to integrity and legality.

Ms Provost said initial advice in 2000 had been that officers would be substantially worse off if they were paid only through the UN system when they were seconded to the organisation.

"The indicative figures suggested the difference might be as much as $100,000 annually...my staff and NZDF recalculated the relevant comparisons for three of the four officers...and this analysis showed that the officers would each have been in a generally comparable financial position under the standard UN conditions," she said.

"They may even have been better off sometimes.

"The rationale for paying additional accommodation assistance to the officers was therefore never valid. The whole saga was unnecessary."

The report sets out recommendations designed to help the NZDF "actively promote a full and balanced set of values for its personnel that clearly sets the core public sector values of operating within the law, scrupulous honesty, integrity, transparency and accountability alongside military values."

Defence Minister Wayne Mapp said the report provided an opportunity to substantially improve the NZDF's culture and management.

"The military values of courage, commitment, comradeship and integrity are the cornerstone of service in our Defence Force," he said.

"The Chief of Defence Force is determined to ensure that these are fully understood and applied at the individual level."

Chief of the Defence Force Lieutenant General Jerry Mateparae said the report's finding were accepted and were consistent with the conclusions of its own inquiry.

He said the Auditor-General had accepted that the officers involved -- who were not named in the report -- were not financially motivated and did not sign false declarations in the hope of being better off.

"These officers have already been censured, as were the two officers responsible for policy development at the time," he said.

"I take all of the Auditor-General's findings extremely seriously. I have undertaken to act upon all of the recommendations."

- NZPA