I am writing to you regarding the question of out-of-pocket expenses incurred by officers in areas of your administration. Such expenses are often related to entertainment and other forms of hospitality associated with performing official duties.

Department and Authority Heads are responsible to ensure that appropriate controls are exercised in this area of expenditure.

Where an officer is paid a salary and an identified expense allowance or is paid a remuneration package based on a "Total Cost to Employer" (as is the case for the Chief Executive and Senior Executive Services) he or she is expected to cover expenditure of a minor nature associated with work and normal representational responsibilities. However, an authorised senior officer may, in the light of particular circumstances, approve of certain out-of-pocket expenses by such officers forming a charge against the organisation. Such expenses must be directly related to the performance of an officer's official duties and the costs must be reasonable. Examples include senior representational duties (such as representing a very senior officer, the head of the organisation or the Minister) and major hospitality duties (such as entertaining a group of interstate/overseas visitors or representatives of private organisations where there is a definite business relationship with the Department).

Where an officer is in receipt of only a cash salary, expenses of an irregular and or a minor nature associated with work and normal representational duties may be charged against the organisation. Other than in exceptional cases, such officers are required to obtain prior approval of an authorised senior officer for any out-of-pocket expenditure of this nature.

Out-of-pocket expenses incurred by officers and charged against the organisation should be handled in the following manner:

•  an allocation for out-of-pocket expenses should be identified within the organisation's budget and accounting system;
• all out-of-pocket expenditure approved as an official charge against the organisation should be charged against and limited by this allocation.
• full documentation will be required to support any claim against this allocation.
• where it is not possible for the expenditure to be billed direct to the relevant Department or Authority, the officer may
  + elect to have the funds advanced, subject to later producing receipts as to actual expenditure, or
  + seek reimbursement up to the approved amount on production of receipts.

officers may choose to use their own credit/charge card(s) and claim reimbursement on the bill. However, any interest, or other financial charge incurred in using such a card will not be reimbursed.

Expenditure should not be approved against this allocation if it could be considered as providing a predominantly personal benefit to an officer or officers (or members of their family or friends) or if it relates to expenditure which is mainly for the benefit of staff of the organisation, e.g. Christmas functions, social functions, or is not directly related to official duties.

The above requirements do not, of course, apply to expenditures to which legislative, industrial or Treasury Directions provide for reimbursement of expenses.

In the case of allowances payable to Ministers it is expected that the allowance would cover most of the normal representation responsibilities associated with the portfolio. However, there may be occasions where it is appropriate for expenses incurred to form a valid charge against the hospitality funds of a Department or Authority for which the Minister is responsible.

For such a charge to be acceptable the following will apply:

The event to which the charge is related must have a direct business relationship with the Minister's portfolio.

The expenditure incurred should not provide a predominantly personal benefit to the Minister or Members of his/her family or friends or officers of organisations coming under his/her responsibility, e.g. Christmas functions, social functions for staff.

The accounting arrangements as outlined for the handling of out-of-pocket expenses for Departmental staff will apply and the charges incurred should fit within the allocation of the particular Department or Authority to whose interests the charges related.

I would be pleased if you would ensure the observance of the above requirements by Departments and Authorities falling within your area of administration.

Nick Greiner
Premier