Claims government Covid funds charged for overtime, new equipment, meetings

Whistleblowers have claimed government departments ‘abused’ a designated covid fund to pay for overtime, meetings and new equipment for offices.

NSW Treasurer Matt Kean has revealed the government will conduct a review of checks and balances in place to prevent the “rorting” of funds committed for Covid-related expenses.

The announcement in Budget Estimates on Monday comes after government department bureaucrats claimed their agencies spent “tens of millions of dollars” abusing the use of a Covid cost centre fund — created to streamline the tracking of expenditure for pandemic-related costs.

A number of government departments set up specific Covid expense accounts in response to the pandemic more than 18 months ago.

While a NSW Treasury spokeswoman said the government “has not mandated agencies allocate a specific cost centre to record their Covid related expenses, nor established a centralised cost centre”, it is understood individual agencies were able to create their own.

The internal cost centres were set up to track expenses — with approvals overseen by department managers and deputy secretaries.

However, whistleblowers within the Department of Communities and Justice (DCJ) claim their cluster has excessively “charged the fund for expenses with little to no connection to Covid-19”.

Whistleblowers claim millions in misspent funds were charged to Covid-related accounts. NSW Parliament House. Picture: NCA NewsWire / Gaye Gerard

“We are told to just chuck anything on the cost centre,” one senior government source, who did not wish to be named, told The Sunday Telegraph.

“They act as if it is an endless slush fund, designed to be abused.”

A second whistleblower from another government department said expenses, including paid overtime, office equipment, department meeting costs, and the replacement of carpet in offices, were being charged to pandemic-related accounts with “very little oversight”.

“The sheer amount of funds being charged to this Covid fund is bigger than some department budgets,” the public servant said. “It is like finding a black American Express card on the ground without a limit — we charge everything to it, never knowing when it will be cut off.

“Usually we are told to justify every cent that we spend (but) there is a completely different story playing out with pandemic-related accounts.”

The bureaucrat said department managers were informed that the pandemic-related accounts would be closed by the end of the financial year.

NEWS: Treasurer Matt Kean speaks during Question Time at State Parliament House. Photo: Wolter Peeters. POOL IMAGES

On Monday, Mr Kean said he was “very disturbed” by reports from whistleblowers that departments were spending funds on new office equipment, meetings between public servants and paying for “millions” in overtime of staff.

“We will obviously review this situation to satisfy ourselves and the broader public that taxpayer dollars are going to their intended purpose, which is making sure that we get money out the door to help deal with COVID-19,” he said.

“I will ask treasury to do some further work to ensure that the agencies are following the right procedures or protocols with how they allocate expenses in the internal management accounts.”

Mr Kean said the government needed to “make sure our systems and controls are relevant and fit-for-purpose.”

Opposition Treasury spokesman Daniel Mookhey revealed former Treasurer Dominic Perrottet approved $346 million worth of extra Covid-related expenditure in 2021 — funds only the NSW Treasurer can approve.

“$346 million is more than 10 per cent of the funding of the Treasury budget.”

“Can you give us any assurance that there is controls in place in respect to how $350 million was spent?” he asked the Treasurer.

NSW Labor Opposition Treasury spokesman Daniel Mookhey. Picture: NCA NewsWire / Adam Yip

Mr Mookhey questioned the checks and balances of the NSW Government’s $7 billion Covid-support fund, and how it would be spent.

“There is complete lack of transparency about what the government is claiming as Covid-related expenses,” he said. “It is no surprise that whistleblowers are alleging that government is treating this secret fund like bottomless money pit.

“With the Government refusing to say how it plans to spend the $7 billion it borrowed last December for Covid, I’m worried it will use this money as just another slush fund.

“The Treasurer has to order an investigation as a matter of urgency.”

The Shadow Treasurer said he will question the spending at Budget Estimates on Monday.

A senior government source said while NSW Treasury oversees funds spent by government departments, it was “unable to conduct forensic auditing of funds spent at a department level”.

“If a public servant wanted to take advantage of a cost centre, it would only be exposed through a review by the audit office,” he said.

Government agencies receive funding approvals as part of the NSW Budget and half-yearly review.

There are calls for NSW Treasurer Matt Kean to push for an investigation. Picture: NCA NewsWire / Jeremy Piper

Meanwhile, the government has also approved funding outside of the normal Budget cycle to enable immediate responses to the pandemic.

A Department of Communities and Justice spokeswoman said the cluster was not aware of any allegations.

“Any staff who believe misconduct has taken place, should report it to our Conduct and Professional Standards branch,” she said.

“DCJ maintains robust oversight and accountability of expenditure, budget management and statutory reporting to ensure the integrity of financial information.

“DCJ financial management practices are supported by policies, align with Australian Accounting Standards and Treasury’s Directions, and routinely subject to audit and assurance oversight.”