Auditor-General’s report, Inquiry into procurement of work by Westland District Council at Franz Josef

The Auditor-General’s report Inquiry into procurement of work by Westland District Council at Franz Josef was presented to the House of Representatives today.

In 2017, Westland District Council approved work for the Franz Josef wastewater treatment plant to protect the plant from flooding. The work was carried out on an urgent basis and resulted in the construction of a new 700-metre-long stopbank along the Waiho River. Concerns were raised by numerous people and groups about the Council’s procurement of the work and whether the Council had appropriately managed any potential conflicts of interest.

After carrying out a formal inquiry, we have major concerns about the scope of the work, the Council’s decision-making process, the blurring of lines between governance and management, and the management of conflicts of interest.

The decision that work was needed to protect the wastewater treatment plant was based on an assessment by two of the elected members that the plant was in imminent danger of flooding. That assessment was effectively endorsed by the Council as a whole without confirmation from anyone with relevant expertise and without any expert review of the Council’s proposed response.

Other examples of poor practice include the lack of any proper risk analysis or consideration of alternative options, an inadequate planning and procurement process for a project of this type and scope, and an apparent disregard for legislated decision-making requirements.

We acknowledge the serious nature of the flood risk the Council was dealing with, and the motivation of the elected members who were driving the decision to act in the community’s best interests. However, none of this makes what the Council did right. The drive to get things done needs to be balanced by an understanding of the importance of doing things right. The ends do not justify the means.

It is the essence of good governance that a governing body can demonstrate to its stakeholders that a decision has been well made and their money has been well spent. In this case, unfortunately, the Council can do neither.

This report is also available as an epub and a two-page summary.

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