Policies and procedures

Leaders and senior managers can make sensitive expenditure decisions that Parliament and the public respect by dealing with sensitive expenditure properly and prudently.

Policies and procedures relating to sensitive expenditure need to:

  • make clear what types of expenditure are and are not permitted;
  • outline clear approval processes that are specific about who approves what, including arrangements for when the usual approver is unavailable;
  • set spending limits or boundaries, including explaining what is meant by “actual and reasonable” when these terms are used, and specifying dollar limits and defined boundaries, where practicable, of what is “reasonable”;
  • allow a manager discretion to grant an exception (“management override”) to a policy or procedure only in exceptional circumstances;
  • specify the monitoring and reporting regime and, where applicable, any internal audit checks that may be applied; and
  • specify the process for amending the policies and procedures.

Approval of sensitive expenditure should be:

  • given only when the person approving the expenditure is satisfied that a justified business purpose and other principles have been adequately met;
  • given before the expenditure is incurred, wherever practical;
  • made within any statutory limits on an entity’s delegations;
  • made only when budgetary provision and delegated authority exist; and
  • given by a person senior to the person who will benefit or who might be perceived to benefit from the sensitive expenditure, wherever possible. Where this is not possible, this fact should be recorded, and any such expenditure should be subject to some form of monitoring.

For more detailed information on preparing suitable policies and procedures for sensitive expenditure, please see Part 3 of our good practice guide on controlling sensitive expenditure.