Imposition of surcharge
(1) If a budget sector agency –
(a) incurs a loss of money or property through an act or omission of a person who was an officer of the agency at the time of the act or omission; and
(b) has taken reasonable steps to recover the money or property or the value of the property but is unsuccessful in recovering the whole or a part of it within a reasonable period,
a surcharging authority may require the person to show cause within a specified period (not exceeding 4 weeks or a longer period allowed by the Finance Instructions) why the person should not be surcharged under this Division with an amount to cover the unrecovered loss.
(2) If –
(a) the surcharging authority is not satisfied with the person’s explanation; or
(b) the person does not offer an explanation within the specified period or a longer period allowed by the surcharging authority ,
the surcharging authority may impose a surcharge on the person to cover the whole or a part of the unrecovered loss.
(3) The surcharged person is to be notified of the surcharge by written notice stating the amount of the surcharge, the time for payment of the surcharge and any arrangements for payment of the surcharge by instalments.
(4) The Finance Instructions may contain provisions about surcharging, including provisions for calculating or limiting the amount that may be imposed by way of surcharge and for describing or limiting the circumstances in surcharges may be imposed.
(5) A surcharge may not be imposed for losses incurred through normal wear and tear or for losses of a class specified in the Finance Instructions.
(6) In this section –
(Financial Management Act 2004 s(68))