$20m Funding Blunder – Overpayment of funding to Early Childhood Service Providers.
By John Hartvelt.
September 24, 2009.
Senior public servants failed to pick up a payment blunder for more than a year, costing the Ministry of Education more than $20 million.
The mistake occurred when a 4 percent funding boost to about 2000 early-childhood centres was allocated twice in the same round, meaning more than $20 million was over-spent.
An internal report obtained under the Official Information Act said human error involving an inexperienced and overworked ministry staff member led to the original funding mistake.
It was compounded by a poor peer review that meant the error went undetected for 14 months.
The report also criticised the ministry’s business culture.
“There is an element of ‘process informality’ to ministry culture which relies on individual staff and `in the head knowledge’ rather than more formal methods,” it said.
The ministry will not recoup the misspent money.
The report said a senior policy analyst in the ministry “almost identified the error”.
“She asked how funding rates could increase by more than 4 per cent when salaries increase by 4 per cent?’
“Unfortunately, she then answered the question herself and that thought appears to have undergone no further critique,” it said.
In the first peer review of the funding rates, another official had written: ” I haven’t checked most of this gigantic spreadsheet and I can only assume that all inputs have been updated and all links are linking to the right places.”
The mistake was replicated in various tables and spreadsheets.
“Internal checks, peer and manager review all failed to identify the error,” the report said.
“We believe that overall peer review of this activity was inadequate.”
The report found the disparate responsibility for funding rates “blurred accountability”.
It concluded that unless a series of shortcomings was addressed there was a risk of a similar mistake.