The Auditor-General conducted an external review of whether Members of NSW Parliament complied with certain requirements outlined in the Parliamentary Remuneration Tribunal’s Determination for the year ended 30 June 2016.

The Auditor-General's review program is designed to cover all Members over the four-year Parliamentary term. The reviews performed are not designed to detect all instances of non-compliance. They provide Parliament with limited assurance about whether Members comply with the Tribunal’s Determination. This year's review covered a sample of 34 Members.

Results

Except for the findings noted below, the Members reviewed complied with the requirements of the Tribunal’s Determination for the year ended 30 June 2016.

Findings

The following instances of non-compliance were identified:

• One Member claimed their Pay TV subscription, which included children's entertainment channels, from their Logistic Support Allocation. These channels do not aid the Member in performing their Parliamentary duties.

• One Member returned their unsubstantiated Sydney Allowance to the Department of Parliamentary Services in the month following the 30 September 2016 deadline.

• Two Members submitted their mid-year reconciliations for the Sydney Allowance in the month following the 31 January 2016 deadline.

• Two Members submitted their year-end reconciliations for the Sydney Allowance in the month following the 31 July 2016 deadline.

• One Member did not submit an annual declaration due by 30 June 2016 until November 2016. The declaration related to benefits accrued to the Member by way of loyalty/incentive schemes from using allowances and entitlements. Such benefits must only be used for Parliamentary duties and not for private purposes.

• Two Members that resigned in May 2016 were required to submit declarations within 30 days of ceasing to be Members. The declarations were submitted in October 2016. The declarations related to benefits accrued to the Members by way of loyalty/incentive schemes from using allowances and entitlements. Such benefits must only be used for Parliamentary duties and not for private purposes

Last year’s Auditor-General’s Report to Parliament included one recommendation. The current status of the recommendation is shown below.

The Parliamentary Remuneration Tribunal (the Tribunal) determines the salary and entitlements of Members of NSW Parliament (Members). These are set out in the Tribunal’s annual Determination. The NSW Parliament, through the Department of Parliamentary Services (the Department), administers the provision of additional entitlements to Members in accordance with the Tribunal’s Determination

Members’ Additional Entitlements Expenditure

Members claimed 3.5 per cent less expenditure in 2015–16 compared to 2014–15

Members’ additional entitlements expenditure was $21.4 million in 2015–16, 3.5 per cent lower than the previous year of $22.2 million.

For the year ended 30 June 2016, Logistic Support Allocation expenditure decreased by 25.4 per cent. The Department advises last year's expenditure was significantly higher than usual due to additional spending by Members prior to the March 2015 State election. Unexpended Logistic Support Allocation is forfeited at the end of each parliamentary term.  

The 2015–16 Sydney Allowance and Committee Allowance increased by 13.3 per cent and 12.3 per cent respectively, due to fewer sitting days and Committee activities in the prior year because of the State election. The Electorate Charter Transport Allocation almost doubled in 2015–16 due to the full year impact of electorate boundary re-distributions in 2015 and the $20,000 increase for the Barwon electorate.

Detailed findings

Sydney Allowance

One Member failed to return their unspent Sydney Allowance by the due date

For the year ended 30 June 2016, 16 Members spent less than the Sydney Allowance they received as an annual fixed amount and had to return around $93,100 by 30 September 2016 (18 Members and around $99,400 for the year ended 30 June 2015). One Member returned their unspent Sydney Allowance ($4,200) in the month following the 30 September 2016 deadline.

Some Members submitted their allowance reconciliations late

Members receiving the annual Sydney Allowance are required to submit reconciliations twice a year to the Department. Two Members submitted their mid-year reconciliations for Sydney Allowance in the month following the 31 January 2016 deadline and two Members submitted their year-end reconciliations in the month following the 31 July 2016 deadline.  

The Sydney Allowance is provided to Members if their principal place of residence is at least seventy kilometres by road from Parliament House or they reside in an outer non-metropolitan electorate. It compensates Members for additional costs associated with staying in Sydney to attend sessions of Parliament, meetings of Parliamentary committees or other Parliamentary business. At the start of each financial year, a Member can choose to receive the Sydney Allowance as either an annual fixed amount or a daily rate when an overnight stay is needed.

If the actual expenses over the year are less than the amount of the allowance, the excess must be returned within three months of the end of the year.

As shown in the table below, almost half of the Members entitled to the Sydney Allowance elected to receive it as an annual fixed amount for the year ended 30 June 2016.

Annual Sydney Allowance

Members receiving the annual Sydney Allowance are required to submit reconciliations twice a year to the Department. The reconciliations help the Department monitor Members' use of the Allowance.  

Daily Sydney Allowance

Members electing the daily rate option claim the allowance as the need for an overnight stay arises. The table below shows the daily rate and number of nights an eligible Member could claim in the year ended 30 June 2016.

Electorate Communication Allowance

Significantly higher use of Electorate Communication Allowance in June each year

While the average monthly spend (excluding June) from the Electorate Communication Allowance was $343,633 across the last three financial years, Members spent $1.9 million in June 2016, $1.0 million in June 2015 and $1.7 million in June 2014 on electorate communication.  

The Department advises that Members spend more in June because the State budget is delivered in June each year. Many Legislative Assembly Members elect to issue a budget related newsletter at that time. Unused Electorate Communication Allowance funds at the end of each financial year are forfeited.

The graph below compares monthly Electorate Communication Allowance expenditure across the last three financial years. 

There are opportunities for agencies in the Premier and Cabinet cluster to improve financial controls and governance of outsourced service providers. These are the key findings of a report released by the New South Wales Auditor-General, Margaret Crawford.