Royal Commission into Abuse in Care blows $56m budget

The Royal Commission of Inquiry into Abuse in Care has been told to rein in its skyrocketing spending and now has to work with Treasury to get back on track.

Documents released to RNZ show operational spending has increased by more than 80 percent in this financial year.

It has asked for three emergency funding top-ups because it had blown the $56 million budget - meant to last another two years.

But Internal Affairs Minister Jan Tinetti, the minister responsible for the inquiry, said it was not the case of poor financial management, just a learning curve.

"I don't think anyone foresaw how big this was going to be," Tinetti said.

When the Royal Commission - the largest inquiry in New Zealand's history - was first set up in 2018, it was given $56m to cover operational costs, like lawyers and staff.

Former New Zealand First MP Tracey Martin, who was the internal affairs minister when the inquiry was established, said there were many unknowns at the time.

"We put in place the appropriate amount of money, that at the time when we didn't know how many victims would come forward. So at that time, we took our best guess at what was the sum total that the Royal Commission would need," she said.

Documents released to RNZ show $23m of the funding for operational costs was spent in the 2019-2020 financial year.

In the current period that spending has shot up to almost $42m, an 82 percent increase.

That was because of a big increase in the number of survivors who had come forward to tell their story, Tinetti said.

"It's more complex, there have been more inquiries that they are actually running, more times they are touching base with those survivors. It is an incredibly large and complex inquiry," Tinetti said.

Three emergency funding requests - totalling more than $20m - were made to the finance minister to plug the gap.

In a letter sent to Tinetti in December, Finance Minister Grant Robertson rejected all of them and instead allocated an unknown amount from an $8m contingency fund.

If he had not, the inquiry would likely have run out of funding to cover operational costs four months ago, the letter stated.

The finance minister also roped in Treasury to look at the Royal Commission's spending and to improve its financial management.

When asked if this was a case of poor financial management or the government did not allocate the inquiry enough money in the first place, Tinetti said it was a "learning curve" for both parties.

Robertson declined to be interviewed but his concern is clear in his letter to the internal affairs minister.

Tinetti said she was also worried about the inquiry's money management when she first picked up the portfolio.

"I did have concerns that I was able to take forward into discussions with the chair of the Royal Commission around that.

"Having said that, that was part of me being able to understand how complex the job was that they were undertaking as well. So it was really important for me to understand if from their perspective ... now I've been able to work with Judge Shaw on a way going forward."

Part of that work moving forward was a clear message to the inquiry chair Coral Shaw - rein in the spending.

The Royal Commission was also asked to review its operations to ensure costs are minimized and to provide a report to ministers, justifying its cost structure.

The executive director of the Royal Commission and its chair and were unavailable for an interview.

But in a statement said its spending has been in proportion with the scope of the terms of reference set by the government.

"Like all other Royal Commissions in New Zealand and overseas, our budgeting is conducted in a bell curve; as such, spending increases in the middle of the Inquiry and decreases over time. We are now in the middle and have been adequately resourcing our investigations to cover the many settings referred to in the terms of reference.

"This is expenditure that has been carefully planned and which the government has been kept abreast of."

"In the terms of reference, the government recognised that the initial budget it provided may not be sufficient to meet the scope of our terms and requested that we came back to them by the end of 2020 with a proposal for further funding needed to complete the inquiry. We did so in the form of an administrative report with budget options for the completion of the inquiry.

"These options took into consideration the broad scope of the terms of reference, the need to complete the inquiry in a survivor focused way, and our cohort study which indicates up to 256,000 children and young people were abused in the care of the state and faith-based institutions."

The government has always said it is committed to this inquiry and supporting its work, so will have little choice but to fork out more money.

Budget Day on 20 May will reveal more.