CCO Report Indicates Double-Dipping

Published: Wed 8 Nov 2006 01:44 PM
Manukau City Councillor For Howick
Media Release
08 November 2006
CCO Report Indicates Double-Dipping
A Manukau City Councillor is questioning the practices of Tomorrow’s Manukau Properties Limited, the council controlled organisation set up by the Manukau City Council to develop Flat Bush Town Centre.
Following the release of the company’s annual report, Howick Councillor Jami-Lee Ross has expressed his concern over the apparent “double-dipping” by one of the company’s directors where $129,700 worth of professional services were provided to TMPL by Conway Davy Limited.
The owner of Conway Davy Limited, Christchurch based businessman Raymond Davy, is also a director of TMPL after being appointed by the Council to the CCO’s board in 2005. In the annual report covering the 9 months to 30 June 2006, the company disclosed the amount paid to Conway Davy Limited, as well as an additional $19,313 expense bill still owed to Mr Davy.
Mr Ross says he is concerned by the large amount of work done by Conway Davy Limited because it blurs the important line between governance and management. “As a company operating on behalf of Manukau City ratepayers I would have expected to see a higher standard of conduct. TMPL should not be in a situation where it is contracting tens of thousands of dollars of work from a company owned by one of its directors.
“Mr Davy is acting in a position where he is making decisions as a TMPL director and then carrying out those decisions via Conway Davy Limited. It is akin to a councillor owning a company which has a $100,000 contract with the council. The public would never approve of the situation.” Mr Ross has written to Manukau City Council chief executive officer Leigh Auton questioning the details of the situation between TMPL and Conway Davy Limited. Mr Ross has questioned whether Conway Davy Limited is continuing to provide professional services to TMPL, and whether or not the CCO followed correct practices when commissioning the work from Mr Davy’s company.
“It appears that TMPL have not sought competitive tenders for the work which would be normal practice when awarding contracts of this value. Instead TMPL has given the job directly to Conway Davy Limited.” Mr Ross has also asked Mr Auton to investigate how TMPL’s $26,327 travel bill has been spent by directors and whether or not Mr Davy received reimbursement for travel solely as a director of TMPL, or also in conjunction with his work involving Conway Davy Limited.
Mr Ross says that although he believes CCO’s have the potential to generate a lot of benefits for Manukau City if correct practices are followed, he fears that the situation between TMPL and Conway Davy Limited has embarrassed the Council and will have a negative impact on the work done by other CCOs.
“The practices being carried out by TMPL are embarrassing and out of order for a council controlled organisation. If Mr Davy wishes to continue in an executive position working for TMPL, then he should resign his position as director of TMPL. It is not appropriate for him to continue as a director if his company is carrying out tens of thousands of dollars of work for the CCO.” In addition to the $129,700 worth of professional services provided by Conway Davy Limited, TMPL’s annual report lists Mr Davy as receiving $15,000 in director’s fees.

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