KĀPITI COAST DISTRICT COUNCIL – CORPORATE POLICY

Corporate Policy Title:
GENERAL EXPENSES POLICY
Policy No:
Corp-16-033
Pages:
1 – 11
Group Responsible:
Corporate Services
Approval Dates:
–  Original y approved on:
July 2016
–  Current version approved on:
July 2023
–  Next review due on:
July 2028

1
POLICY OBJECTIVE
1.1
To ensure that all expenditure is undertaken in a way that is transparent,
appropriate, conservative and has a justifiable business purpose.
2
SCOPE
2.1
This policy applies to all staff and contractors of the Kāpiti Coast District Council
(collectively referred to as employees or staff).
2.2
The responsibilities of Elected  Members  in  relation  to  Council  expenditure  are
explained in the Expense Rules Applicable to Elected  Members of Local
Authorities.
3
PRINCIPLES
3.1
As the Council is the custodian of public money, al  expenditure should be subject
to a high standard of probity and financial prudence and should be able to
withstand public scrutiny.
3.2
Expenditure decisions must:
•
have a justifiable business purpose;
•
be cost-effective;
•
preserve impartiality;
•
be made with integrity;
•
be moderate and conservative, having regard to the circumstances;
•
be transparent; and
•
be appropriate.
3.3
Al  expenditure must be in accordance with the Procurement Policy to ensure
purchasing decisions are consistent, fair, transparent and lawful and deliver value
for money.
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3.4
Al  expenditure must be in accordance with the Register of Financial Delegations
to ensure that staff act within their delegated authority.
3.5
Ensure that no perceived individual benefit is derived through any expenditure.
3.6
The Council terms of payment to suppliers is the 20th of the following month after
invoice date.
Exercising judgement
3.7
The responsibilities of the Senior Leadership Team include being accountable for
the proper and prudent spending of public money. This includes the internal
controls that support it.
3.8
In the absence of a specific rule, Council staff must exercise good judgement by
taking into account the principles of this policy and the context of a given situation,
in accordance with the Mitigation of Fraud Policy.
4
POLICY STATEMENTS
Approval of Expenditure
4.1
Authorisation must be given before the expenditure is incurred, wherever practical.
4.2
The Council operates and monitors expenditure through the MagiQ purchase order
system (EPO). Every purchase needs to have an EPO created and the
corresponding number communicated to suppliers, which subsequently then
needs to be disclosed on every invoice of supply.
4.3
Each EPO raised requires both an “Initiator” and “Authoriser” to be selected.
4.3.1  The “Initiator” is an individual:
•
that acknowledges the physical receipt of a good or service by the Council;
and
•
has ensured that where  the dollar value of the purchase/contract is over
$5,000, the Procurement Policy requirements have been complied with and
documented.
4.3.2  The “Authoriser” is an individual:
•
that is at least the “Initiators” direct Manager, providing a “one-up”
authorisation relationship or  is  the  manager  of  the  associated  budget
(non-compliance wil  be reported); and
•
has the appropriate financial delegation to approve the purchase and that the
Procurement Policy requirements have been compiled with where
applicable.
4.4
Where there may be real or perceived personal benefit from expenditure,
authorisation must be one-up from the person who may benefit or be perceived to
benefit from the expenditure.
Reimbursement for Expenditure
4.5
In the case of an expense initiated by –
4.5.1  The Elected Members (including the Mayor):
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•
Renumeration and allowances paid are in accordance with the
Renumeration Authority legislation (using the relevant year’s Local
Government  Members Determination)  and reflected  in  the  relevant year’s
“Elected Member Remuneration Expenses and Al owances Policy”.
•
Any personal expense for reimbursement is to be authorised by:
o
Democracy Services Manager; or
o
Chief Financial Of icer
4.5.2  The Chief Executive – any expenditure must be authorised by;
•
the Mayor, and
•
the Group Manager Corporate Services
4.6
In addition to the Council’s normal controls and processes regarding expenditure
the following provisions apply:
•
al  claims must be submitted promptly after the expenditure is incurred.
Except in exceptional circumstances, this means within one month of the
expenditure being incurred;
•
expenditure wil  only be reimbursed if it is deemed to be reasonable, actual,
and  has  been  incurred  directly  in  relation  to  Kāpiti  Coast  District  Council
business;
•
valid GST compliant taxable supply information (invoices/receipts) and other
supporting documentation must be submitted for all expenditure. Credit card
statements do not constitute adequate documentation for reimbursement;
•
al  claims must clearly state the business purpose of the expenditure where
it is not clear from the supplier documentation supporting the claim; and
•
the Council’s preferred suppliers are to be used, wherever possible.
4.7
Claims for re-imbursement that do not meet the above criteria can only be actioned
if they have been authorised by a Group Manager or higher.
Use of Credit Cards
4.8
This policy is designed to minimise the risks associated with the use of credit cards,
including:
•
inappropriate business-related expenditure (in both quantity and type);
•
obtaining cash for a business purpose, with subsequent expenditure being
poorly documented or justified; and
•
personal benefit, by obtaining cash or paying for personal items.
4.9
The  Council’s  Executive  Secretaries  to the Group  Managers and the Manager
Financial Accounting currently hold Council Credit Cards, though other positions
may be issued cards should there be a valid business need. Each card holder must
sign the “KCDC Credit Card Guidance” declaration, acknowledging the terms and
conditions of use and additional expectations of the card holder. Mandatory training
wil  be provided by Accounts Payable on credit card usage and the accounting
processes once the card has been issued to the card holder.

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4.10
Al  credit card transactions must be supported by original documentation to explain
and corroborate transactions. The business reason and other parties (if any) must
be recorded along with the purpose of the meeting for all entertainment and travel
transactions.
4.11
Only the cardholder (person who the card was issued to) is authorised to make
purchases. This is stated in the Westpac terms and conditions of use and the banks
Anti-money  Laundering  and  Countering  Financing  of  Terrorism  Act  2009
(AML/CFT) obligations. Al  purchases of goods or services with a Council credit
card must be supported by an authorised electronic purchase order, adhering to
the “one up” authorisation as documented within this Policy.
4.12
Should a cardholder cease employment with the Council, the Manager Financial
Accounting wil  arrange with the bank to cancel the card. The credit card must be
returned to the Manager Financial Accounting, who wil  ensure it is physically
destroyed.
4.13
The use of Council credit cards for private expenditure is strictly prohibited.
4.14
Credit cards may not be used for cash advances. The physical card must be
retained within the Finance safe in compliance with the Cash Handling Policy.
4.15
The unauthorised use or the misuse of a Council credit card may result in formal
disciplinary action being taken.
4.16
Credit card payments made online need to reflect good security practice as per
below:
•
purchase only from established and reputable companies;
•
the cardholder must retain a copy of the online order form and taxable supply
information (invoice) to support the payment;
•
online purchases must comply with Council’s Procurement Policy.
Travel and Accommodation Expenditure
4.17
Council staff may incur travel and accommodation costs while conducting Council
business elsewhere in New Zealand or overseas. The principles of a justified
business purpose, moderate and conservative expenditure, are particularly
relevant for travel and accommodation expenditure.
Air Travel
4.18
To the extent practicable, air travel is to be with Air New Zealand  and Air
Chathams, using the procurement.govt.nz  flight booking portal, which only the
Executive Secretaries are authorised to log in to.
4.19
To the extent practicable, air travel is to be booked well ahead of the travel date
and must be economy class, to make the expenditure cost-effective.
4.20
Business Class may be used in the following situations; however, this requires prior
approval of the Chief Executive where practically possible;
•
the flight is more than five hours of uninterrupted flight time;
•
there is an overtly demanding work schedule on arrival requiring preparation
work en-route;
•
personal health, safety or security reasons apply; and/or
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•
the airline has offered the staff member a free upgrade (also applicable to
any free “First Class” upgrade).
4.21
The Council payment for membership of airline travel clubs e.g. Koru Club requires
the approval of the Chief Executive. Membership must be supported by a clear
business purpose and reviewed annually.
Meals and Accommodation
4.22
To the extent practicable, accommodation is to be booked well ahead of the actual
travel date, so the expenditure is the most cost-ef ective possible. This must take
into account the location of the accommodation relative to the event, the standard
of the accommodation and security issues. Wherever possible, use is to be made
of  the  Council’s  preferred  suppliers  and  negotiated  corporate  rates  or  special
offers.
4.23
Reasonable meal costs wil  be met with the total cost including non-alcoholic
beverages not expected  to  exceed  $60  per  person  per  meal.  Separate  meal
expenses wil  not be met where a meal has been provided as part of the meeting,
conference, training, etc. The exception is where the staff member has a known
food allergy/intolerances that cannot be catered for at the function, in this situation
the meal reimbursement can then apply.
4.24
Minibar costs wil  not be reimbursed by the Council.
4.25
Discretionary entertainment expenses such as movies or other forms of personal
entertainment will not be reimbursed by the Council.
4.26
Business communication – all charges for business related telephone calls, email
and internet access made by an employee travelling on Council business wil  be
reimbursed. The Council will also pay for a reasonable amount of personal internet
access and immediate family contact each day while staff are travelling on Council
business.
4.27
Accommodation check-out times are to be observed. In the absence of extenuating
circumstances, any additional costs as a result of failing to check out in time are
the responsibility of the staff member.
4.28
Reasonable expenses wil  be met for unexpected events, e.g. overnight expenses
due to a cancelled flight.
4.29
Where travel arrangements are extended to accommodate an employee’s
personal arrangements, all costs in addition to those that would be expected for
the business component of the trip are the responsibility of the staff member.
4.30
If an employee chooses to stay privately with family/friends when away on Council
business, that person may be reimbursed at the rate of $75 per night away on
business in lieu of accommodation and meal costs. This may be subject to Income
Tax.
Motor Vehicles and Taxis/Ride-sharing
Council vehicles
4.31
Staff are expected to use a Council vehicle for Council business where practicable
and in accordance with the Vehicle User Policy. The Council vehicles (except those
provided  explicitly under an employment agreement and/or as part of a
remuneration arrangement) are not available for private use.
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4.32
Any fines (parking or traffic offences) incurred while using a Council vehicle are the
responsibility of the driver unless the fines relate to an aspect of the condition of
the vehicle outside the driver’s control.
4.33
Where, due to the nature and timing of the business being conducted, it is not
practicable to use a pool vehicle, staff may travel by private motor vehicle. Al
instances where it is proposed to use a private vehicle for Council business should
be approved by the Group Manager in advance and wil  be looked at on a case by
case basis.
4.34
Refer to the Vehicle User Policy for a more comprehensive understanding of the
responsibilities  and  expectations  on  the  individual  when  operating  Council
vehicles.
Rental cars
4.35
Rental cars are only available for business conducted outside the Kāpiti District,
and when a Council vehicle is not available. The Council requires that the most
economical type and size of rental car be used, consistent with the requirements
of the trip. Any fines (parking or traffic offences) incurred while using a rental
vehicle are the responsibility of the driver.
4.36
Private use of a rental car is only permitted in exceptional circumstances and
requires  the  approval  of  the  relevant  Group  Manager  or  Chief  Executive.  Al
additional costs as a result of private use are the responsibility of the employee.
4.37
The applicable business unit’s Executive Secretaries needs be consulted should a
booking be required to ensure the Council’s preferred supplier discount is utilised.
Taxis/Ride-sharing
4.38
The  Council  wil   pay  for  travel  by  taxi/ride-sharing  for  staff  away  on  Council
business, where this is the most cost effective transport option.
Private vehicles
4.39
The Council wil  not normally pay for travel by private motor vehicle when travel by
other means is more practical and cost ef ective. Pre-approval is required in order
for staff to be reimbursed for the use of a private motor vehicle. Motorcycles and
scooters are excluded from this policy as a private motor vehicle.
4.40
The vehicle owner must ensure that they have appropriate insurance cover for the
vehicle and the registration and warrant of fitness are current while it is being used
on Council business. Any fines (parking or traf ic offences) incurred while using a
private vehicle on Council business are the responsibility of the driver.
4.41
Al  reimbursement claims for use of a private motor vehicle must be made on the
appropriate form. Reimbursement wil  be made in  accordance with the current
“Tier-2 rate per km” mileage rates for employee reimbursement recommended by
the IRD, which is dependent on the “type” of vehicle used.
4.42
Under extraordinary instances, the “Tier 1” rate may be applied – but this will be
limited to emergency responses where employees are requested to be redeployed
to  locations  following  a  significant  event,  and  in  accordance  with  the  IRD
specifications. In this situation the travel reimbursement wil  cover the journey to
and from the location, but all other travel wil  be reimbursed at the “Tier 2” rate. The
application of any “Tier 1” rate reimbursement must be pre-approved before the
travel by both:
•
Group Manager of the employee’s business unit, and
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•
Group Manager of Corporate Services
Tipping
4.43
The Council wil  not reimburse staff for tipping while they are on business in New
Zealand.  The  Council  wil   reimburse  staff  for  appropriate  tipping  during
international travel only in places where tipping is local practice.
Koha
4.44
Giving Koha is the practice of bestowing an unconditional ‘gift’ where the recipient
has neither stipulated that it be given, nor has any expectation of receiving it; the
practice seals a relationship between parties. The Koha Policy clarifies the
circumstances in which the gifting of Koha by Council to third parties is appropriate
and explains the controls that apply.
Private Arrangements and Stopovers
4.45
Staff with the express approval of the appropriate Group Manager (or the Mayor in
the case of any Chief Executive expenditure), may undertake private travel before,
during or at the end of Council travel, provided there is no additional cost to the
Council  and  the  private travel  is  only  incidental to the  business  purpose  of  the
travel.
4.46
Travel costs for accompanying spouses, partners or other family members are a
personal expense and wil  not be reimbursed by the  Council.  In  the  rare
circumstance where the involvement of a spouse directly contributes to a clear
business purpose, the Council may contribute to all or part of the additional costs.
However, this will require the Group Manager’s prior approval.
4.47
The cost of stopovers wil  only be reimbursed by the Council when they are pre-
approved by the Group Manager and have a clear business purpose. Where an
unscheduled stopover is made or is unavoidable due to the carrier, the Council will
cover this cost.
Entertainment and Hospitality Expenditure
4.48
Entertainment and hospitality can cover a range of items from tea, coffee,  and
biscuits to catering and non-alcoholic drinks. Any purchase of alcohol must be in
compliance with the Alcohol in the Workplace Policy. Expenditure also includes
non-catering related items, such as entry to sporting or cultural events.
4.49
The business purposes of entertainment and hospitality include:
•
building relationships;
•
representing the organisation;
•
reciprocity of hospitality where this has a clear business purpose and is within
normal bounds – acceptance of hospitality is expected to be consistent with
the principles and guidance for provision of hospitality;
•
developing revenue streams;
•
recognising significant business achievement;
•
supporting  the  Council’s  internal  organisational  development  may,  in
occasional circumstances, also be a legitimate business purpose for
moderate expenditure. The  Council’s  Staff  Wellness  Policy  outlines
provisions for expenditure that promotes the health and wellbeing of staff.
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4.50
The principles of a justified business purpose, moderate and conservative
expenditure are particularly relevant to the  Council.  The  Council  requires  tight
control of expenditure and transparent reporting.
4.51
Al  entertainment and hospitality expenditure must be pre-approved where possible
and always supported by clear documentation. This documentation must identify
the date, venue, costs, recipients,  and benefits derived and/or reasons for the
event. If the expenditure is not pre-approved, the most senior person present (with
delegated authority) should approve and confirm the expenditure as being
appropriate.
Private use of Council Assets
4.52
Any physical item owned, leased or borrowed by the Council is considered an asset
for the purpose of this policy. This includes photocopiers, telephones, cell phones,
cameras, means of accessing the internet, computers, software, and stationery.
4.53
The costs to the Council of private use will be recovered unless it is impractical or
uneconomic to separately identify those costs.
4.54
The  use  of  Council  assets  in  any  private  business that any employee or may
operate is not permit ed.
4.55
Council vehicles are not available for private use. Full details on the provision of
and use of Council vehicles are contained in the Council’s Vehicle User Policy.
Council use of Private Assets
4.56
The main issue associated with the Council’s use of private assets is the risk of the
Council  paying  or  reimbursing  amounts  that  inappropriately  benefit  the  staf
member. Pre-approval by the Chief Executive is required. In assessing the request,
the Chief Executive or Group Manager wil  pay particular at ention to the principles
of a justified business purpose and preserving impartiality and integrity.
4.57
The  Council  may  decide  that  reimbursing  staff  for  use  of  private  assets  is
appropriate for reasons such as cost, convenience, or availability. The Council may
also decide to do this in circumstances where it would not fully use an asset of the
same type if it acquired it directly. Examples include private motor vehicles, private
cell phones and private computers.
4.58
Staff members must not approve or administer payments to themselves for the
Council’s use of their private assets.
4.59
Private Use Agreements within Fixed Remuneration, where employees make their
private vehicles available for Council use are covered in the Vehicle User Policy.
Private Use of Council Suppliers
4.60
As staff may have access to some Council suppliers on the same basis as the
Council, they may receive preferential access to goods or services and potentially
at a preferential price, which is not available to the public. The risk is that the
availability of the discount to staff wil  influence the choice of Council suppliers.
4.61
The selection of suppliers must be in the interest of the Council. The availability or
possibility of staff purchasing privileges must not factor into this selection.
4.62
Staff may make use of any preferential access to goods or services through the
Council’s suppliers under the following conditions:
•
the discount offered must be the same discount offered to all Council staff
and not be particular to individual staff members; and
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•
all orders are to be issued on a cash sale basis only and the staff member
must pay in full for the goods and services directly to the supplier at time of
supply.
4.63
In rare circumstances, a Council purchase order may include expenditure with a
personal component, such as a travel or accommodation booking. In this case
payment to the Council for the personal component must be made on confirmation
of the cost or the receipt of taxable supply information (invoice) from the supplier,
whichever occurs first.
Staff Support and Welfare Expenditure
4.64
Care  of  dependants  is  a  personal  and  private  expense  of  staff  members.  In
exceptional circumstances, the Chief Executive may authorise the reimbursement
of actual and reasonable costs. Examples of this might include when a staff
member is unexpectedly required to perform additional duties at very short notice,
or when a dependant unexpectedly requires additional care that the staff member
cannot provide at that time due to the nature of their duties.
4.65
The Council may make a prudent and reasonable monetary contribution to the staff
social club (should one exist). The contribution may be in the form of an all-purpose
grant towards the club’s annual budget, or it may be a grant or subsidy for a specific
event or item.
4.66
Expenditure on long service and retirements includes spending on functions, gifts
and other items and should not be extravagant or inappropriate to the occasion.
Refer to Council’s Recognition and Gift Policy.
Staff Social Functions
4.67
Group Managers may approve expenditure on food and non-alcoholic beverages
for functions such as farewells, team rewards and recognition, subjects to the
guidelines set out in this Policy. Any purchase of alcohol must be in compliance
with the Alcohol in the Workplace Policy.
4.68
Christmas Parties must be funded by the participants in attendance, the expense
wil  not be incurred by the Council. This is consistent with the use of public money
principles contained within this policy. This does not apply to “all staff” events such
as the annual “Al  Staff Breakfast”.
Donations
4.69
A donation is a payment (in money or by way of goods or services) made voluntarily
and without the expectation of receiving goods or services in return.
4.70
The Council requires donations to be:
•
lawful in all respects;
•
disclosed in aggregate in the Council’s annual report;
•
made to a recognised organisation by normal commercial means (not to an
individual);
•
not in physical cash; and
•
non-political (i.e. politically neutral).
4.71
The amount given on behalf of the Council should reflect the occasion and the
prestige of Council in its relations with the recipient and be approved by the Chief
Executive or relevant Group Manager.

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Receipt of Gifts
4.72
Treatment of gifts is dealt with in the Receipt of Gifts and Hospitality Policy.
5
REFERENCES
5.1
Relevant legislation and external references include but is not limited to:
•
Controlling sensitive expenditure: Guidelines for public entities (Controller
and Auditor General)
•
Commerce Act 1986
•
Sale of Goods Act 1908
•
Fair Trading Act 1986
•
Consumer Guarantees Act 1993
•
Public Finance Act 1989
•
Financial Reporting Act 1993
•
Privacy Act 1993
•
Local Government Official Information and Meetings Act 1987
•
Public Audit Act 2001
•
Anti-money Laundering and Countering Financing of Terrorism Act 2009
•
Local Government Members Determination
•
Elected Member Remuneration Expenses and Al owances Policy
6
RELATED POLICIES
6.1
Relevant Kāpiti Coast District Council policies include:
•
Delegations Policy
•
Procurement Policy
•
Koha Policy
•
Cash Handling Policy (currently in draft)
•
Vehicle User Policy
•
Receipt of Gifts and Hospitality Policy
•
Expense Rules Applicable to Elected Members of Local Authorities
•
Recognition and Gift Policy
•
Alcohol in the Workplace Policy
•
Mitigation of Fraud Policy

7
DELEGATIONS
7.1
This Policy must be approved by the Senior Leadership Team and signed by the
Chief Executive for it to become operative.
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8
EXCEPTIONS
8.1
There are no exceptions to this policy.
9
REVIEW PROCESS
9.1
This policy will be reviewed in five years. Any changes to the policy as a result of
the review wil  need to be approved by the Senior Leadership Team.
10
POLICY HISTORY
Version  Date  Policy Owner
Amended By  Brief Description
of Change
Approved By
Senior
1
Aug  Group Manager  Group Manager
2008
Finance
Finance
New Policy
Leadership
Team
Group Manager
Senior
2
July
Group Manager
2016
Corporate
Leadership
Services
Finance
Policy re-written
Team
Group Manager
Senior
3
July
Manager Financial
2023
Corporate
Leadership
Services
Accounting
Policy re-written
Team

11
POLICY AUTHOR
Author name:
Michael Parrish
Author position:
Manager Financial Accounting

12
APPROVAL
Chief Executive name:
Darren Edwards
Chief Executive signature:

Date:
25 July 2023

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Document Outline