In early December 2013 the Office of the Auditor General (OAG) released two inquiries showing multiple failings; one into the Mangawhai wastewater scheme and the other independent inquiry into Audit New Zealand, the Kaipara District Council (KDC) auditor.
One thing is clear in these outcomes – nothing was gained, and indeed much will have been lost, at ratepayer expense from the delays in the commencements in these inquiries.
When the first calls for an investigation by the OAG into the council and the burgeoning debt of the waste water scheme came in late 2009, early 2010, how can the Auditor General justify her decision not to commence an investigation until early 2012 when the fall of ‘Rome’ was all but complete?
Indeed, after 20 months of inquiry the damning report into Audit New Zealand (an arm of the OAG) has shown that they as overseers totally failed in their responsibilities and have departed from the minimum professional standards and expectation required of an auditor. The affected period of this departure was 2006 to 2009.
I believe the delay in commencing their inquiry was not only unjustified, but compounded an already dire situation. The inquiry confirmed and validated the calls for it, and the delay in commencing the inquiries simply demonstrates further and ongoing failings of the OAG in its dealings with KDC. If this is not the case I am yet to see any valid justification for the delay, or rebuttal from the OAG that my criticism is unwarranted.
The debt blow out on the scheme from $35 million to $63 million (something not covered by the Local Bill) was set in chain in late 2007, right in the middle of the Auditors failures. The question I have been asking of the OAG throughout this process is if they had fulfilled their professional responsibilities as auditors would they have identified a council who had lost touch with reality and due process, which unchecked led to costs almost doubling? If the answer to that is no, then the buck ultimately stops with them given they signed off clean audits.
When council goes off the rails those auditing them can’t be asleep at the wheel. They clearly were, and they also need to front up, take responsibility, and accept accountability for their part in this. A process is underway to work through identifying the value of the loss caused by various parties, including the OAG, and what can and should be done to seek recourse – financial and otherwise – for this. I have made it very clear to the Auditor General, Lyn Provost, through the media, personally and formally, that her office should do the honourable thing and compensate the council and its ratepayers for the value of their failure. While at this stage that is being worked through, I will not rest until this aspect is resolved properly and fairly for ratepayers.
It adds insult to injury if the OAG are to expect ratepayers to burden their failure between 2006 and 2009, then their failure to commence an inquiry for almost three
years after it was first called for. A sheepish apology to residents in Mangawhai doesn’t cut it. There is a principle at stake here, something I feel very strongly about and I have made it clear to the Prime Minister, the Minister of Local Government, the commissioners and the Auditor General that I will not give up on this.