Put that on my expense account

I don’t mind spending money but I really really hate to waste it. This past week, I wrote a column on third party payments and how much easier it is to spend other people’s money than it is our own. It was inspired by a conference that was paid for by the taxpayer that I ended up skipping. Although I had the intention of going, and I think it is a conference that I would normally have paid for myself, I couldn’t help but wonder if it was indeed easier to stay away because it wasn’t my money being wasted.

This got me thinking about many many cases where I see (or hear of) public money being spent. There is a mindset when we spend our money. Some of us simply never spend even when we should, others are reasonable, while still others spend so easily that they are always in debt. I think when it comes to other people’s money, the bar gets shifted toward a more liberal spending of funds. This is one of the factors that can lead to cost overruns.

Send me your examples of money wasted

This week, I thought I would try something a little different. I don’t know how many of you will answer but I would like to hear your stories of company or public money being wasted. (e.g., end of budget year extravagance, parties, demands for special perks… you name it). Please send me your comments!

Here is last week column:

Who cares? It’s not my money! (Source: Et alors? Ce n’est pas mon argent. Journal Métro, May 20, 2008)

I have a confession to make. I was booked to go to a conference today. I had planned the day off and the inscription fee was pre-paid by my hospital budget. In other words, I was going at your expense. Instead, I am sitting at my kitchen table writing this column and skipping the conference.

I simply had too much work and not enough time. The money was spent for nothing and, while it was not a large sum ($75), it violated my conviction that public money should not be wasted. For that, you have my sincerest apologies.

I have a minuscule expense account and I normally spend it wisely. Whenever I go to a meeting outside the hospital, I always look for parking on the street before pulling into a paid lot. Why? Because that’s what I would do if I were footing the bill myself.

I tell you this because I constantly see other people’s money being spent much more freely than our own money tends to be.

Third party payments

Is anyone really surprised by rising medical and drug insurance costs? We develop these plans in order to simplify the system and to help those who cannot afford to pay for their own essential services. Yet in doing so, we create a system where the “bill-ers rarely have to face the “bill-ees.”

The idea that somebody else is paying seems to make it so much easier to spend. I don’t want to single out any one person or profession. The problem is everywhere, both in the public and private sectors. Some workers request new materials or furniture when what they have is functional. Some managers hire consultants to tell them what they already know simply so they can justify an unpopular decision. Some professionals pad their bills when a client isn’t paying directly.

This does not necessarily mean that professionals or others are being dishonest. It’s just that a system of third party payments makes it easier to bill for items that are less than essential, or to charge for extra time taken without having to justify it. It also makes it easier to ask for, and to receive, luxury treatment.

If everyone spent other people’s money as they would their own, we might end up with fewer high-end golf courses, or restaurants, or corporate boxes at the Bell Center. But I bet you some of these luxuries would become more affordable to the rest of us. And so would the essentials.


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Posted in Human nature.

Posted on 29 May 2008

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  1. Pina D
    On Jun 6th 2008 at 13:12
    Reply

    Hey Camillo,

    I absolutely agree! I’m fortunate enough to have a decent dental plan but often the bills submitted to the insurance carrier by the dental office are padded. When called on it, it’s amazing how the charges are reduced with an apology that it was an error. After being called on it several times with different members of my family the charges have become more consistent with the services rendered. But how many people check the amounts submitted? As you said in your article it’s someone else’s money when in fact it isn’t…the insurance premiums paid by us and our employers are consistently going up, deductibles are rising and less services are being covered. The same situation has happened here in Ontario with our vehicle insurance….we are paying astronomical rates for minimal coverage.

    Don’t even get me started on government spending….if our elected officials were to budget and spend our hard earned tax dollars as they would their paycheques I’m certain there would be less frivolous spending and much needed cash left over for essential services and equipment.

    Aren’t you glad you asked?!!

    On a personal note, I’d like to thank you for sending along a copy of your book. I have to say my family is thoroughly enjoying it. Keep up the great work and look forward to future articles.

    Ciao.

  2. Camillo
    On Jun 13th 2008 at 11:29
    Reply

    Thanks Pina,

    Your comment about insurance costs is particularly relevant. We have no-fault insurance in Quebec. What this means is that our own insurance company pays for our repair, regardless of who’s at fault. This avoids the hassle of trying to figure out which company pays (especially since the volume of accidents means that costs even out in the end.

    The main cost difference involves the effort to get compensation. There are many people frustrated in Quebec because they can’t sue someone else who’s at fault (the government compensates you for any lost wages). This limits compensation to an amount determined by a bureaucrat . Many people here want to change the system. What they don’t appreciate is that for the few people who get more satisfactory compensation, dozens more will fight in vain. Lawyers will make a killing and insurance will spend a lot to defend themselves (the perpetrators rarely pay out of their own pockets). The public will of course foot the bill.

    Thanks.