$66m expenses system for federal parliamentarians suspended

The Canberra Times understands the Special Minister of State Don Farrell will make an announcement on Tuesday morning, outlining major problems with the 2018-introduced digital Parliamentary Expenses Management System, or PEMS, which has long been the subject of bitter complaints from parliamentarians and staff.

Run by the Department of Finance, PEMS superseded a paper-based system and is used to manage and monitor office and travels expenses such as staff leave, staff allowances, MP travel claims, office budgets, printing, phone and internet bills.

It was a Turnbull government initiative in the wake of the "Choppergate" spending saga involving former speaker Bronwyn Bishop.

However, there have been cases of overpayments, underpayments, late payments, incorrect claims, incorrect reports and money sent to the wrong recipients.

"I have made the decision as Special Minister of State to announce a pause on publishing parliamentary expenditure reports until the second half of 2023, some detailed information on the work underway to rectify the system, a referral of this project to the Auditor-General for Audit Office consideration," Senator Farrell is expected to outline on Tuesday.

In opposition, Senator Farrell had pursued the Coalition and officials over the functioning of PEMS, including hundreds of questions at estimates hearings. Under his questioning in 2021, alleged cases of fraud involving former staff linked to the program were revealed as causing cost blowouts.

Soon after Labor took office, he ordered an internal investigation into the system.

It is understood that, while MP and staff claims can be processed, the problems found with PEMS were worse than expected.

The Canberra Times understands PEMS has cost just over $66 million to run over four years to August 31. The expenses system was initially budgeted to cost $38.1 million.

Last year, the department indicated was "keeping a very close eye" on spending, but it also blamed the COVID-19 pandemic for the delays.

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The Independent Parliamentary Expenses Authority (IPEA) releases reports based on PEMS claims every quarter in a bid to ensure politicians are accountable for the way they spend millions in taxpayer dollars.

PEMS was first developed in 2018, but problems with its functioning have been public. The Finance-run website offers a dedicated help desk and training for users to navigate its "secure online portal" for phones and desktops.

But in a concerning move for transparency and accountability, the expenses system has not been able to develop its regular quarterly expenditure reports for IPEA since a major software upgrade which took place in June 2022, a month after the election.

Such reports reveal expenses related to parliamentarians' travel allowance, office admin, telecommunications, family travel and staff expenses. It is understood there is literally no capacity to compile the reports.

MPs, senators and parliamentary staff are being advised that expenses claims can still be submitted at this time.

Previous quarterly IPEA reports showing millions of taxpayer dollars spent on expenses are regarded as accurate.

Senator Farrell has been highly critical of the expenses management system in the past, laying blame with the Coalition.

"The parliamentary expenses system needed updating but the government has badly mishandled the process," he said in May 2021.

Correspondence will be sent on Tuesday to all parliamentarians about the problems with PEMS and the pause in quarterly reporting.

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