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MP asks OAG to settle with KDC

 

MP for Northland, Mike Sabin, is once again urging the Office of the Auditor General to arrange a settlement with Kaipara District Council over costs stemming from the failures of the council Auditor between 2006 and 2009.

This follows the recent decision by Kaipara District Council commissioners to mount legal action against Audit New Zealand for negligence having been shown to have departed from the minimum professional standards and expectation required of an auditor.

“I support the commissioners in this next important step in resolving the failings at the Kaipara District Council over the mid to late 2000s by seeking accountability from those who failed ratepayers,” says Mr Sabin.

“I again implore the Office of Auditor General to do the honourable thing in accepting they have contributed to the failings, by sitting down with the commissioners and negotiating an appropriate settlement.

Mr Sabin said that the independent inquiry re-leased late last year into Audit NZ, the council auditor, over the time of the planning and construction of the Mangawhai Community Wastewater Scheme, is nothing short of damning highlighting significant areas of defi-ciency and non-compliance.

Significant issues relate to the Auditor’s planning and audit engagement, identification and assessment of audit risks, sufficiency and appropriateness of audit documentation, and collection of sufficient appropriate audit evidence.

The inquiry report is particularly scathing of the Auditor between 2006 and 2009, saying their understanding of the wastewater scheme was inadequate, and didn’t allow for the audit process to be effectively planned.

“Quite simply Audit New Zealand did not identify the Mangawhai Community Wastewater Scheme project as a key audit risk or even an area of focus,” says Mr Sabin.

“The Council got it badly wrong, but it is apparent the Auditor’s lack of understanding and focus on the financial risks and rapidly escalating costs of the scheme over this 3 year period are contributory to the major debt blow-out from approximately $35 million to a final cost of over $63 million.”

While current Auditor General, Lyn Provost, was not in place at the time of these failings, Mr Sabin says he is hopeful she will show leadership with the issue by settling with the commissioners, preventing further litigation and placing even more burden on wary ratepayers.

“This is important financially, but also necessary in my view, vital in restoring any sort of belief in the system of local government.

Mr Sabin says he also welcomes the decision
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