Report snapshot
About this report
This report reviews compliance by members of the Parliament of New South Wales with certain requirements outlined in the Parliamentary Remuneration Tribunal’s (the Tribunal) 2024 Annual Determination (the Determination).
Claims made by members for additional entitlements totalling $12.7 million were within the scope of our review. The remaining payments of $12.1 million were not reviewed as there are certain salaries and allowances that the Determination excludes from our compliance review requirements.
Claims relating to annual basic and additional salaries, additional expense allowances, and electoral and committee allowances are excluded by the Determination from the scope of our compliance review.
Findings
From a sample of 56 claims, our compliance review procedures identified 27 departures from requirements of the Determination and/or the administrative guidelines of the Department of Parliamentary Services (the Department).
There were fewer departures this year than in previous years, however late submission of claims and declarations by members continued. The Department needs to provide clarity to members on expenditure claim requirements and processes.
Recommendations
The Department should:
- enhance its assessment as to whether members’ expenditure claims comply with requirements and advise members promptly about whether their claims are ineligible
- improve its quality review processes when reporting the total number and dollar value of members’ additional entitlements claims for each year
- ensure internal audits of members’ additional entitlements are adequately scoped and endorsed prior to their commencement and reflect the requirements of the Determination. These internal audits should be completed prior to the compliance review performed by the Audit Office
- continue to work with members to provide them additional training or education and better help them comply.
Fast facts
1. Introduction
This report reviews compliance by members of the Parliament of New South Wales with certain requirements outlined in the Parliamentary Remuneration Tribunal’s (the Tribunal) 2024 Annual Determination (the Determination).
The Determination establishes the annual salaries and additional entitlements allowed to members of the Parliament of New South Wales under the Parliamentary Remuneration Act 1989 and requires members’ claims for additional entitlements to also comply with requirements of the Department of Parliamentary Services’ (the Department) administrative guidelines. The Parliament of New South Wales, through the Department, administers payments of additional entitlements.
There were 32,244 payments made to members for entitlements under the Determination during the 2023–24 financial year totalling $24.8 million. Of these, 30,566 claims for payment of additional entitlements totalling $12.7 million were within the scope of our compliance review under the Determination. The remaining payments of $12.1 million made during the 2023-24 financial year were not reviewed as there are certain salaries and allowances within the Determination that are excluded from compliance review requirements. These payments include:
- annual basic salaries, additional salaries and additional expense allowances
- additional entitlements comprising electoral allowances and committee allowances.
The infographic below outlines which payments made to members for entitlements under the Determination are within the scope of our compliance review, and those which the Determination excludes from our compliance review.
2. Review results
There were fewer departures from requirements of the Determination and/or the administrative guidelines of the Department identified in our 2023–24 compliance review than in previous years. However late submission of claims and declarations by members continue, indicating a need for improved processes and greater clarity, training and education for members.
From a sample of 56 claims, our compliance review procedures identified 27 departures from requirements of the Determination and/or the administrative guidelines of the Department. These included:
- 21 claims for payment were not submitted within 60 days of receipt of invoice or incurring the expense (2022–23: 22 claims)
- 1 claim under the Communications Allowance related to a publication that did not include the required authorisation and attribution (2022–23: two claims)
- 5 members submitted their annual loyalty/incentive scheme declarations after the date specified in the Department’s administrative requirements (2022–23: seven members).
The table below shows the number of departures from requirements of the Determination and/or the administrative guidelines of the Department identified in the past three financial years’ compliance reviews.
| 2023-24 | 2022-23 | 2021-22 | |
| Late submission of claims for payment | 21 | 22 | 12 |
| Late submission of Sydney Allowance reconciliations | -- | 4 | 6 |
| Ineligible claims for Communications Allowance | 1 | 2 | 4 |
| Communications Allowance claims made during blackout period * | -- | 1 | -- |
| Annual loyalty/incentive scheme declarations not submitted | -- | 4 | 2 |
| Late submission of annual loyalty/incentive scheme declarations | 5 | 7 | 16 |
| Total number of departures from the Determination | 27 | 40 | 40 |
* Blackout periods are applicable only to election years.
3. Findings and observations
3.1. Background
The Determination classifies additional entitlements into allowances and fixed allocations. The infographic below summarises the additional entitlements within the scope of our compliance review.
3.2. Claims for additional entitlements in 2023–24
In 2023–24, 30,566 claims totalling $12.7 million were within the scope of our compliance review.
Similar to previous years, our processes for this compliance review did not extend to examining every claim made by members. Instead, we used data analytics to identify claims of a higher risk. This resulted in a sample of 56 claims being tested, relating to 31 of 136 members.
The graph below shows by category the amounts claimed as additional entitlements within the scope of our compliance review for 2023–24.
Travelling Allowances for Recognised Office Holders claimed by members in 2023–24 was $3,900 (2022–23: nil).
The table below compares the additional entitlement claims by members in 2023–24 with those in 2022–23.
| $'000 | Number of claims | |||||||
| 2023-24 | 2022-23 | Movement | 2023-24 | 2022-23 | Movement | |||
| Communications Allowance | 8,703 | 9,828 | decreased | (11.4%) | 12,102 | 12,744 | decreased | (5.0%) |
| Sydney Allowance | 2,041 | 1,431 | increased | 42.6% | 1,861 | 1,413 | increased | 31.7% |
| General Travel Allowance | 1,183 | 951* | increased | 24.4% | 11,975 | 9,650 * | increased | 24.1% |
| Electorate/Zone to Sydney Travel entitlement | 667 | 539 | increased | 23.7% | 4,419 | 4,381 | increased | 0.9% |
| Skills Development Allowance | 79 | 46 | increased | 71.7% | 152 | 116 | increased | 31.0% |
| Travelling Allowances for Recognised Office Holders | 4 | -- | increased | -- | 57 | -- | increased | -- |
| Total | 12,677 | 12,795 | decreased | (0.9%) | 30,566 | 28,304 | increased | 8.0% |
* In 2022–23, 2,536 General Travel Allowance claims with a total dollar value of $244,294 were omitted in the Department’s reporting (this is further discussed below). The 2022–23 information included in this table has been restated to include these claims.
While the number of claims in 2023–24 increased by eight per cent compared to 2022–23, the total dollar value of claims decreased by 0.9%. This is largely due to a reduction in the average value of individual claims for the Communications Allowance.
The $1.1 million (11.4%) reduction in Communications Allowance claims by members in 2023–24 is largely due to 2022–23 being an election year. There was increased activity leading up to the March 2023 election, which resulted in an increase in Communications Allowance claims by members.
The graph below shows the monthly dollar value of Communications Allowance claims for the past three years.
Certain information submitted for the compliance review by the Department in 2022–23 was incomplete
When we compared the General Travel Allowance claims in 2023–24 to those reported by the Department in 2022–23, the total number of claims increased by 4,861 (68.3%), resulting in an increase of $479,664 (67.8%) in the total dollar value of entitlements claimed by members. After querying this increase with the Department, it was identified that the number and total dollar value of General Travel Allowance claims submitted for the compliance review in 2022–23 was incomplete. This resulted in a restatement of 2022–23 claims from 7,114 claims totalling $707,237, to 9,650 claims totalling $951,532. The Department advised this omission was largely due to the manual processes required to extract the members’ additional entitlements information from its reporting system.
RecommendationThe Department should improve its quality review process when reporting the number and total dollar value of members’ additional entitlement claims to ensure it is accurately reporting the number and value of claims. |
3.3. Detailed findings
Lateness in members’ expense claims continue to grow
The Determination requires members to submit expense claims to the Department within 60 days of receipt of invoice or incurring the expense. Our review identified 21 instances where members submitted claims after the 60-day timeframe. Each claim was on average 117 days late, with the latest claim being submitted 394 days late. Last year we identified 22 instances of late claims being submitted on average 39 days late, with the latest claim being submitted 284 days late.
Five members were late in submitting their annual loyalty/incentive scheme declarations
Members are required to complete their annual loyalty/incentive scheme declaration by 31 July each year, or within 30 days of leaving Parliament (for former members). Our review procedures identified that five members submitted their declarations seven days late on average. Last year, we identified that seven members submitted their declarations six days late on average.
Members are required to complete these declarations to confirm that loyalty or reward benefits accrued using their additional entitlements have not been used for non-parliamentary purposes.
One Communications Allowance claim did not include the required authorisation and attribution
According to the administrative guidelines of the Department, with which the Determination requires members to comply, publications must include that the communication has been ‘authorised by’ the member and an attribution that it has been ‘funded using parliamentary entitlements’.
Our review procedures identified one instance where a member had claimed the Communications Allowance for a publication for which the required authorisation and attribution had not been made. Last year, we identified two instances where claims under the Communications Allowance did not include the required authorisations and attributions.
The Department should enhance its process to assess whether claims are eligible prior to processing payments
The Determination requires members to maintain records of their expenditure. However, the Department does not always assess these records to ensure the eligibility of claims before making payments.
While the Determination does not specifically require the Department to review and confirm claims are eligible, validating claims for payment is a common and simple good-governance step and should be applied for members’ entitlements.
RecommendationPrior to payments being made, the Department should enhance its assessment as to whether members’ expenditure claims comply with requirements of the Determination and the administrative guidelines of the Department, and advise members promptly about whether their claims are ineligible. |
The Department’s annual internal audit review of additional entitlements did not meet the requirements of the Determination
The Determination requires additional entitlements provided to members be audited annually for compliance by the Department’s internal audit function. The Determination requires the internal audit to include:
- additional entitlements in the nature of fixed allocations, which includes:
- Communications Allowance
- Electorate/Zone to Sydney Travel entitlement
- General Travel Allowance
- Travelling Allowance for Recognised Office Holders
- Skills Development Allowance
- the Sydney Allowance.
The Department’s internal audit plan included an audit on members’ additional entitlements for the year ended 30 June 2024, however the scope was limited to Communications Allowance claims. The Sydney Allowance and all other fixed allocation allowances were excluded. This meant the internal audit for 2023–24 did not meet the requirements outlined in the Determination.
RecommendationThe Department should ensure internal audits of members’ additional entitlements are adequately scoped, quality reviewed and endorsed prior to their commencement. The scoping should ensure requirements of the Determination are considered and achieved. |
The Department’s 2023–24 internal audit on additional entitlements was not completed in a timely manner
The internal audit of members’ additional entitlements for the year ended 30 June 2024 (limited to Communications Allowance claims) was in progress at the same time as our compliance review and is yet to be concluded at the date of this Report.
Undertaking an internal audit at the same time as our compliance review is not an effective and efficient approach for the Department. This meant our compliance review could not consider any findings identified by the Department’s internal audit function, which could have helped inform our risk assessment when determining our testing approach. This approach also limits the potential benefits arising from the internal audit and compliance review, which could help the Department in tailoring its training and education provided to members to improve compliance with requirements of the Determination and/or the administrative guidelines of the Department.
In the absence of the Department requiring evidence to support and review the eligibility of claims as outlined above, the annual internal audit process is even more important as it acts as the Department’s detective control when it assesses members’ compliance with requirements of the Determination and/or the administrative guidelines of the Department.
RecommendationPrior to our compliance review commencing each year, the Department should ensure:
|
4. Status of recommendations from prior years
Members require further clarity to address the continued departures from the Determination
Our past compliance reviews identified departures from the Determination and the administrative requirements of the Department that indicate a need for greater clarity in the current processes and guidance, including increased training or education to help support members comply with the Determination.
Last year we recommended:
- the Tribunal provides greater clarity on current processes and implications of departures from the guidelines to members
- the Department works with members to provide them additional training or education and better help them comply with the Determination and/or the administrative guidelines of the Department.
While an improvement was observed in the number of departures from the Determination and the administrative requirements of the Department over the years, similar departures have been consistently identified in our compliance reviews. This suggests there is still a need for the Department to improve processes and provide greater clarity, training and education to members. It reconfirms the importance of our recommendation in section 3.3, which calls for the Department to be responsible in assessing the eligibility of claims for additional entitlements prior to payment.
Enhanced public reporting
Since 2016, our reports to Parliament have recommended the Tribunal consider requiring the Department regularly publish full details of members’ expenditure claims on its website in an accessible and searchable format.
In response, the Tribunal had developed a plan requiring greater public reporting of members’ expenditure from 1 July 2019. However, Crown Solicitor’s advice sought by the Tribunal confirmed it did not have the power to require the Department publish full details of members’ expenditure claims.
The Department responded to this recommendation by identifying that a significant investment in the required systems was necessary to allow for the detailed publishing of all members’ expenditure claims.
This recommendation has been considered by the Department and to date, there are no imminent plans for any change in the way it publishes the details of members’ expenditure claims during the year. Given our recommendation was to enhance public reporting of members’ expenditure claims, and there is no non-compliance with existing reporting, we will not be repeating this recommendation.
Appendices
Appendix one - Response from the Department of Parliamentary Services
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